Important General Information for Multifamily Developers

Important General Information for Multifamily Developers

NOTICE OF FUNDING AVAILABILITY - JUNE 17, 2016

The New Jersey Housing and Mortgage Finance Agency (“HMFA”) is pleased to announce a Notice of Funding Availability (“NOFA”) for projects seeking a reservation of volume cap in conjunction with HMFA’s Multifamily Tax Exempt Bond Financing Programs.

Volume Cap shall be awarded in accordance with the Volume Cap Selection Criteria approved by the HMFA Board on May 26, 2016.

Applications for Volume Cap shall be submitted to HMFA no later than noon on Monday, August 1, 2016 (“NOFA Deadline”).

The application consists of an HMFA Board-Approved Declaration of Intent (DOI)** and documentation to support qualification under any applicable Selection Criteria. Please refer to the Volume Cap Selection Criteria Application Guide for a complete description of all submission requirements.

Shortly after the NOFA Deadline, eligible projects shall be ranked based on the Selection Criteria. Once HMFA is notified by Treasury of the amount of volume cap available for the NOFA, Project Sponsors shall then be notified if they have received a reservation of volume cap. Awarded Sponsors shall have one year from notification of a volume cap reservation to obtain a mortgage commitment for tax exempt financing from the HMFA Board.

Note: The Selection Criteria deal solely with the prioritization of projects for a volume cap reservation. Projects selected under a NOFA must adhere to all other HMFA requirements to receive a commitment for HMFA Multifamily financing.

** Projects seeking a Declaration of Intent at the July meeting of the HMFA Board shall submit hard copies of all items listed on Part I of the appropriate Document Checklist (see below) no later than noon on June 30, 2016. 

 

IMPORTANT ANNOUNCEMENT REGARDING VOLUME CAP - MAY 26, 2016

Due in large part to the success of HMFA's Conduit Bond Financing Program and the leveraging of Superstorm Sandy CDBG-DR funds, demand for volume cap in conjunction with HMFA's Multifamily Tax Exempt Bond Financing Programs has reached unprecedented levels.

The priorities for currently available 2016 cap are as follows:

  1. Superstorm Sandy projects receiving Fund for the Restoration of Multifamily Housing (FRM) and/or Sandy Special Needs Housing Fund (SSNHF) funds; and
  2. Non-Sandy projects that have received an HMFA commitment

On May 26, 2016, the HMFA Board approved proposed Volume Cap Selection Criteria* (71k PDF) in order to provide an objective methodology of awarding volume cap as it becomes available for projects beyond the aforementioned priorities. The approval of the Volume Cap Selection Criteria is subject to the Governor's 10-day veto period.

Download the Volume Cap Selection Criteria (71k PDF)

Application Process and Timeline
HMFA staff shall announce any Notice of Funding Availability (NOFA) at least 45 calendar days prior to the application deadline date (the NOFA Deadline). In order to be considered for a reservation of volume cap, projects shall have obtained an HMFA Board-Approved Declaration of Intent (DOI)** and shall provide documentation to support qualification under any applicable Selection Criteria by the NOFA Deadline.

Shortly after a NOFA closes, eligible projects shall be ranked based on the Selection Criteria (71k PDF). Once HMFA is notified by Treasury of the amount of volume cap available for the NOFA, Project Sponsors shall then be notified if they have received a reservation of volume cap. Awarded Sponsors shall have one year from notification of a volume cap reservation to obtain a mortgage commitment for tax exempt financing from the HMFA Board.

Any project that is unable to meet the above deadlines would lose their reservation of volume cap but would be eligible to submit a request under the next NOFA.

No less than 50% of the available volume cap under each NOFA shall be made available to rehabilitation projects, and no less than 50% shall be made available to family projects provided NJHMFA receives a sufficient number of eligible applications to result in these allocation percentages.

Defined terms in the Selection Criteria (71k PDF) shall be interpreted consistent with the NJ Qualified Allocation Plan at N.J.A.C. 5:80-33 et seq.

The Selection Criteria (71k PDF) deals solely with the prioritization of projects for a volume cap reservation. Projects selected under a NOFA must adhere to all other HMFA requirements to receive a commitment for HMFA Multifamily financing.

* Subject to the Governor's 10-day veto period

** Projects seeking a Declaration of Intent at the July meeting of the HMFA Board shall submit hard copies of all items listed on Part I of the appropriate Document Checklist (see below) no later than noon on June 30, 2016. 

Applying and Program Contacts

For Multifamily Programs, contact:

Marisol Rodriguez, Director of Multifamily Programs and Lending
Phone: 609-278-7526
Email: mrodriguez@njhmfa.gov

UNIAP Application

The UNIAP, HMFA's Unified Application for Multifamily Housing Production Programs, may be downloaded from our UNIAP page.

Please Take Notice

The underwriting guidelines, policies, procedures, and forms here may be amended from time to time due to changes in market conditions and/or changes in HMFA's housing policies or initiatives. Such amendments may occur without notice and are applicable to all pending and future applications. Applicants are, therefore, responsible for contacting the HMFA to ascertain whether or not there have been any changes since the date of issuance of the information provided here and for complying with such changes.

Eligible Housing Developers

Private developers, municipalities, well established not-for-profit groups such as religious organizations and units, etc. are among those eligible for HMFA financing programs.

Eligible Project Types

HMFA encourages the preservation of affordable housing. Developers should, however, bear in mind that a housing proposal must meet HMFA standards for the site, neighborhood location, accessibility of services, marketability, design and construction. The proposal must be financially feasible, and comply with applicable local, state and federal requirements. The primary determinant, with regard to eligibility for HMFA financing, is that the housing have a rental cost which is financially feasible and is consistent with low- or moderate-income needs.

In selecting applications for loans, priority is given to applications for rental housing loans for the construction, improvement or rehabilitation of housing projects which will be a part of or constructed in compliance with the New Jersey State Development and Redevelopment Plan. Copies of the Plan may be obtained at the New Jersey Office of State Planning, Department of Community Affairs, or by calling (609) 292-7156. In addition, consideration is given to:

  1. the comparative need of the area or residents to be served by the proposed housing project;
  2. the ability of the applicant to construct, operate, manage, and maintain the proposed housing project;
  3. the existence of zoning or other regulations to protect adequately the proposed housing project against detrimental future uses which could cause undue depreciation in the value of the project;
  4. the availability of adequate parks, recreational areas, utilities, schools, transportation, and parking;
  5. the availability of adequate, accessible places of employment; and
  6. where applicable, the eligibility of the applicant to make payments to the municipality in which the housing project is located in lieu of local property taxes.

Permanent, Construction Only, Construction and Permanent Loan Types

HMFA has three types of loan programs. They are refinancing permanent loans, construction loans that convert to permanent financing; and permanent loans with a construction escrow. Most loans are funded through the sale of bonds. These bonds may be either tax-exempt or taxable. The interest income on tax-exempt bonds is exempt from federal income tax. Tax-exempt bonds generally have a lower interest rate and, as a result, HMFA is able to provide loan financing at below market interest rates.

Projects financed through the sale of tax-exempt bonds must comply with Section 142(d) of the Internal Revenue Code and the applicable U.S. Department of Treasury regulations. These regulations control such things as the low- or moderate-income occupancy requirements as well as the use of the buildings. Furthermore, these bonds are subject to a statewide volume cap and the availability of the same for the funding of housing projects.

Taxable bonds are generally less restrictive; however, they usually have an interest rate of approximately 200 basis points higher than that of tax-exempt bonds. Under special circumstances, HMFA will fund loans from the Multifamily Rental Housing Production Fund Program. This program's funds are generally accessed to provide short-term loans for local housing authority turnkey projects or to provide immediate loans in anticipation of refunding the loan with bond proceeds at the next occurring bond issuance of HMFA.

Equal Opportunity

HMFA prohibits discrimination because of race, religious principals, color, national origin, or ancestry by any housing sponsor, institutional lender, loan originator, or any agent or employee thereof in connection with any housing project or eligible loan being funded directly or indirectly by HMFA.

Discrimination is prohibited because of age in admission to, or continuance of occupancy of, any housing project receiving assistance, except for any housing project constructed under a governmental program restricting occupancy of at least 90% of the dwelling units to persons 62 years of age or older and any members of their immediate households or their occupant surviving spouses, or constructed as a retirement subdivision or retirement community as defined in the "Retirement Community Full Disclosure Act," P.L. 1968, c.215 (C.45:A-1 et seq.).