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Affordable Housing

Posted on: July 7, 2023

Governor Signs Bill Assisting First-Generation Homebuyers

This week, Governor Murphy signed into law S-3780. The new law provides down payment assistance and provides tax credits to developers that commit to construct or reconstruct housing for certain low to moderate income households.

Prior to the signing of S-3780, the New Jersey Housing & Mortgage Finance Agency (NJHMFA) administered a down payment assistance program for qualified first-time homebuyers. However, the payment was in the form of a $10,000 to $15,000 forgivable loan and it must have been paired with an NJHMFA first mortgage loan. The program established under the new law makes the first-time homebuyer loan consistent throughout the state at $15,000, while first-generation homebuyers would be eligible for an additional $10,000.

Additionally, the new law establishes a pilot program in the Department of Community Affairs (DCA) for the purpose of providing funding for developers to rehabilitate existing homes and construct new affordable homes for sale. 

As part of the pilot program, the DCA is required to develop an application process and promulgate criteria that enables a developer to qualify for funding for the rehabilitation or construction of homes for sale.  Among such other criteria as DCA deems necessary, the DCA must require that:

  • homes rehabilitated or constructed for sale are not located in the 500-year floodplain or the inland or coastal climate adjusted floodplain; 
  • homes rehabilitated or constructed are to be sold to households with a gross household income not to exceed 120% of median gross household income; 
  • a prospective homebuyer is either: a renter that has been impacted by a storm or natural disaster that has prompted the governor to declare a state of emergency; or a first-time homebuyer, including a first-time homebuyer who receiving financial assistance from HMFA; 
  • the developer must include a purchase discount on the home sale price, as established in accordance with criteria developed by DCA; and 
  • homes for sale contain a minimum period of affordability as determined by DCA.

$25 million was appropriated from the FY24 General Fund to pay for the programs. P.L. 2023, c. 78 took effect June 30.

Contact: Frank Marshall, Esq., Associate General Counsel,, 609-695-3481, x137. 

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