In order to improve specific underwriting criteria and set benchmarks in CHOICE projects, HMFA’s Board recently approved additional changes to the CHOICE 2015 Program.

Summary of Changes to the 2015 CHOICE Program

Choice Financing:

  • Single-family/detached housing – The Agency will provide shared construction funding and subsidy during construction.
  • Mid-rise multi-unit building – The Agency will provide shared construction funding and subsidy. Subsidy funds will be available for draws only after the construction loan funds have been depleted.

Construction Loan Extensions:

  • Construction loan extensions may require a complete re-underwriting of the loan to determine the funding gap. In certain cases this may require a subsidy adjustment.

Contingency:

  • Contingency should only be used for an unforeseen item.

Guaranty:

  • A Personal Guaranty is required for all projects.

Letter of Credit:

  • A letter of credit for up to 25% of the total financing may be required for mid-rise multi-unit buildings.

Sale Price Adjustments:

  • Sale price adjustments may require a new appraisal.

Applicant’s affirmative obligation to disclose changes:

  • (a) Applicants are under a continuing affirmative obligation to advise NJHMFA of any changes to any aspect of the proposed development and provide relevant information as it becomes available, including but not limited to notification of any pending/anticipated litigation which may affect the proposed development.
    NJHMFA shall require the owner to certify and may require further documentation to verify that all representations made in the application concerning the proposed development, including but not limited to the representations relied upon to determine the applicant’s eligibility and the approved project’s plans and budget, are, and continue to be achievable. Substantive changes to the development plans, budgets and any other documents used in making the initial NJHMFA approval decision may cause the project’s subsidy allocation to be reconsidered by NJHMFA.
    NJHMFA reserves the right to request any and all documentation necessary to monitor the progress of the development throughout the construction phase, sale of units, and until approval of the final cost audit.
  • (b) NJHMFA shall have the authority to rescind the approval of funding to any project, including but not limited to, all or a portion of its subsidy allocation if any representations made in the application are mistakenly or intentionally misrepresented or not fulfilled.

To review these changes in greater detail within their respective documents, visit the CHOICE application page: http://www.njhousing.gov/developers/choice/application/index.shtml

On the CHOICE application paqe, these changes can be found within the following documents:
Guidelines, Summary of Substantial 2015 Guideline Changes, and in the Application (Section X and Attachment H-6 have been updated).