Key facts
- New Jersey's Housing and Mortgage Finance Agency sold $40 million in state tax credits.
- The program aims to finance affordable and workforce housing.
- This is described as the first state program of its kind at this scale.
- A second auction of $60 million in tax credits is planned.
- Proceeds will support housing for households earning less than 60% of area median income and workforce housing for 80%-120% of area median income.
The New Jersey Housing and Mortgage Finance Agency (NJHMFA) has successfully sold $40 million in state tax credits to corporations, a move designed to finance affordable and workforce housing developments across the state. This initiative marks what the agency describes as the nation's first program of its kind at this scale.
Governor Mikie Sherrill stated that the tax credits will convert private investment into housing, addressing New Jersey's housing shortage and fostering stronger communities. The program aims to increase the supply of housing by attracting private capital to projects.
Following the strong demand and success of the initial auction, NJHMFA announced plans for a second auction offering approximately $60 million in additional state tax credits, scheduled from October 16 through November 30. Proceeds from these auctions will continue to fund affordable and workforce housing development.
Assembly Speaker Craig Coughlin noted that his law, A3128, is already proving effective in helping developers close financing gaps and expedite projects. Senate Majority Leader Teresa Ruiz emphasized the program's demonstration of how public-private partnerships can tackle housing affordability.
Under the program's structure, eligible businesses can bid on state tax credits, with a minimum bid set at 80 cents on the dollar. The average winning bid in the spring auction reached 87 cents on the dollar. Awarded credits can be applied to Corporate Business Tax or Insurance Premium Tax, with unused credits eligible for carry-forward for up to seven years.
Half of the auction proceeds are designated to assist municipalities in meeting their affordable housing obligations, while the other half will fund workforce housing for middle-income families. All projects will also leverage federal 4% Low-Income Housing Tax Credits administered by NJHMFA. The program is set to support housing for households earning less than 60% of area median income and workforce housing for those earning between 80% and 120% of area median income. NJHMFA intends to continue these state tax credit auctions through 2030.