Predevelopment Fund for Affordable Rental Housing
What is this program?
The New Jersey Redevelopment Authority received $10 million in Community Development Block Grant (CDBG) Disaster Recovery funds to create the Predevelopment Loan Fund for Affordable Rental Housing. The program provides a source of low-cost financing to help non-profit developers cover costs related to converting properties that are currently unsafe, underutilized or in foreclosure into affordable rental housing. All projects receiving financing will help to revitalize the community in which they are located and address affordable housing needs that were created or exacerbated by Superstorm Sandy.
The Predevelopment Loan Fund provides three-year loans of between $100,000 and $500,000 per project, at an interest rate that will not exceed 2 percent. The loans are secured by a mortgage on the development site and/or other collateral satisfactory to the New Jersey Redevelopment Authority (NJRA).
Initial occupancy of the housing units developed under this program is restricted to households at or below 80 percent of Area Median Income for their county.
Who is eligible?
Non-profit developers in good standing, per the State’s annual registration, may apply. The NJRA anticipates that borrowers receiving Predevelopment Loan Funds will also receive funding from other CDBG Disaster Recovery programs as well as other public and private funding sources.
What will the program fund?
Predevelopment Loan Fund proceeds may be used for a variety of predevelopment costs, including but not limited to project feasibility studies, legal fees, soil studies, site preparation, appraisals, and surveys. Predevelopment costs must have been incurred after October 30, 2012 to be eligible for financing.
Projects must help to revitalize a community that has been directly or indirectly impacted by Superstorm Sandy. The program targets New Jersey redevelopment areas, and per federal government requirements, provides priority to eligible projects in the nine most impacted counties as determined by the federal government (Atlantic, Bergen Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union).
How do I apply?
Non-profit developers wishing to apply for the program can download an application on the NJRA website at http://www.njra.us. Applications will be accepted on a rolling basis until all funds are allocated.