A bill that would create a program to buy up foreclosed property and transform it into affordable housing has passed in both houses of the legislature and now heads to the governor.
The bill would establish a central agency under the New Jersey Housing and Mortgage Finance Agency (HMFA) to use funds from the State Affordable Housing Trust Fund to purchase and deed-restrict abandoned foreclosed properties to be used as affordable housing.
The bill would also create incentives for municipalities to transition abandoned properties to affordable housing on their own, giving them a 2-to-1 match against their affordable housing obligation for affordable units created from foreclosed properties using funds from municipal affordable housing trusts. The bill sponsors said the bill could result in over 10,000 new affordable units and over 10,000 less unoccupied, boarded-up properties.
The measure would be paid for by tapping into unused funds held in the State Affordable Housing Trust Fund and in municipal affordable housing trust funds, as well as excess funds received from the Realty Transfer Fee, federal funds reserved for affordable housing production and neighborhood revitalization, and the HMFA’s bonding ability.
Earlier Monday, bills that would extend the deadline for municipalities to spend affordable housing trust money passed in both houses and the budget passed tonight contains language that would shield the money forefeiture to the state.