The New Jersey Housing and Mortgage Finance Agency (NJHMFA) announced that it has approved the creation of the State Tax Credit Subsidy (STCS) Program. The STCS Program will incentivize hundreds of millions in private investment through competitive auctions to create billions of dollars’ worth of workforce and affordable housing production.
On Oct. 27, NJHMFA will open the first STCS Program Auction authorized by this program. The auction portal will accept bids for 30 days and will be accessible on the NJHMFA website.
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. All qualifying New Jersey businesses are encouraged to participate in this tax-savings opportunity, which affords New Jersey taxpayers the opportunity to realize direct, dollar-for-dollar tax reductions while supporting critical investment in the Garden State.
“The launch of the State Tax Credit Subsidy Program marks a pivotal step forward in NJHMFA’s commitment to expanding access to safe and affordable housing for low-to-moderate income families,” said Executive Director Melanie R. Walter. “By creating a competitive and transparent auction for raising funds to subsidize workforce and affordable housing production, NJHMFA is unlocking new opportunities for public-private investment in the communities that need it most.
“The STCS Program strengthens NJHMFA’s financing tools and deepens NJHMFA’s impact — ensuring that more families across New Jersey have a place to call home.”
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, minus administrative and operational costs, will be deposited into the STCS Program Fund for housing production.
Half of the money 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 are paired with federal 4% Low-Income Housing Tax Credits, also administered by NJHMFA.
