On October 2, the New Jersey Housing and Mortgage Finance Agency (NJHMFA) approved the creation of the State Tax Credit Subsidy (STCS), a program created to incentivize hundreds of millions of dollars in private investment through competitive auctions to create billions of dollars’ worth of workforce and affordable housing production. Half of the funding in the STCS Program Fund will be reserved for the creation of workforce housing through the Workforce Housing Fund set-aside, and the remaining half will be utilized to continue the landmark Affordable Housing Production Fund to help municipalities meet their housing goals. Both programs require that these gap subsidies be paired with federal 4% Low-Income Housing Tax Credits, also administered by NJHMFA. Over the next five to six years, NJHMFA will sell up to $500 million in state tax credits during competitive auctions, with an annual limit of $100 million in state tax credits sold and at a minimum value of 80% of the tax credit amount. The innovative wholesale tax credit structure will yield at least $400 million in housing production investment. All investments received from the auction will be deposited into the STCS Program Fund for housing production, with the exception of administrative and operational costs.
NJHMFA will open the first STCS Program Auction authorized by this program on October 27. All qualifying New Jersey businesses are encouraged to participate. Bidders awarded state tax credits can apply them to the Corporate Business Tax or Insurance Premium Tax at any point during the seven years following the credits being purchased at the auction. The auction portal will accept bids for 30 days and will be accessible on the NJHMFA website. Any businesses interested in participating in the auction should get a Tax Clearance Certificate from the New Jersey Division on Taxation which can be obtained by emailing: BusinessAssistanceTC.Taxation@treas.nj.gov or calling the Division at (609) 322-6835 or calling the Division at 609-322-6835.
Workforce and affordable housing subsidy applications will begin to be accepted on a rolling basis this Fall. Applications will be approved based on a project having demonstrated that it meets all eligibility criteria and has secured firm funding commitments from all other financing sources. Since STCS Program funding is contingent upon the sale of state tax credits, subsidy award recommendations will only be presented to the NJHMFA Board for consideration to the extent funds are available.
You can learn more about the STCS Program Auction, including eligibility and auction details, at the NJHMFA website or via email at auction@njhmfa.gov. For information on the STCS Program Fund, you reach out to NJHMFA via email at njhmfa_multifamily@njhmfa.gov.
Contact: Sadayah Q. DuRant-Brown, Legislative Counsel, sdurantbrown@njlm.org, 609-695-3481, x137.