TRENTON – Senator Ronald L. Rice recently introduced a measure to require that properties that were created as affordable housing units will maintain that designation even if the property is resold due to a foreclosure.
“The lack of affordable housing has long been a major problem facing New Jersey residents, and unfortunately, tough economic times have only pushed our low to moderate income families into foreclosures,” said Senator Rice, D-Essex and Chairman of the Senate Community and Urban Affairs Committee.
“This State has worked hard to subsidize and reserve affordable housing properties for occupancy by low and moderate income families, and the slowing economy and rising mortgage interest rates have caused many of these units to be foreclosed upon,” Senator Rice added.
According to Senator Rice, “In some cases when foreclosures on affordable housing units occur, the requirements to keep the properties affordable and sold only to other low or moderate income families could be jeopardized. The mortgage companies or banks that take control of the properties do not always have to resell or maintain the properties as affordable housing.”
The bill would codify certain current regulations of New Jersey Housing Mortgage Finance Agency (HMFA) regarding affordability controls of such housing units subject to the “Fair Housing Act” of New Jersey.
Senator Rice noted that a few years ago, the State changed its regulations concerning affordable housing controls, but units mortgaged before the regulations changed may not be protected.
Senator Rice stated, that under his bill, S-1622, affordable housing units in foreclosures could be sold only to other qualified low or moderate income households, thus keeping these units reserved for occupancy by the intended population.
“The bill would require the Department of Community Affairs (DCA) and the municipality to be given notice of a foreclosure, prior to the sale,” said Senator Rice. “This bill would provide an opportunity for the State or municipality to buy the property first and place new affordable housing restrictions on the property once again.”
Senator Rice will hold hearings on the bill in his committee.