West Orange Fourth Round HEFSP_adopted 111025_Appendices

rson household; (d) A three-(3) bedroom unit shall be affordable to a four and one-half (4 %)-person household; and (e) A four (4)-bedroom unit shall be affordable to a six (6)-person household. In determining the initial sales prices and rents for compliance with the affordability average requirements for restricted units in assisted living facilities and age-restricted developments, the following standards shall be used: (a) Astudio shall be affordable to a one (1)-person household; (b) A one (1)-bedroom unit shall be affordable to a one and one-half (1 %)-person household; and, (c) A two (2)-bedroom unit shall be affordable to a two (2)-person household or to two (2) one (1)-person households. The initial purchase price for all restricted ownership units shall be calculated so that the monthly carrying cost of the unit, including principal and interest (based on a mortgage loan equal to ninety-five (95%) percent of the purchase price and the Federal Reserve H.15 rate of interest), taxes, homeowner and private mortgage insurance and condominium or homeowner association fees do not exceed twenty-eight (28%) percent of the eligible monthly income of the appropriate size household as determined under 4844-7802-2092, v.2

N.J.A.C. 5:80-26.4, as may be amended and supplemented; provided, however, that the price shall be subject to the affordability average requirement of N.J.A.C. 5:80-26.3, as may be amended and supplemented. 8. The initial rent for a restricted rental unit shall be calculated so as not to exceed thirty (30%) percent of the eligible monthly income of the appropriate size household, including an allowance for tenant paid utilities, as determined under N.J.A.C. 5:80-26.4, as may be amended and supplemented; provided, however, that the rent shall be subject to the affordability average requirement of N.J.A.C. 5:80-26.3, as may be amended and supplemented. 9. The price of owner-occupied low- and moderate-income units may increase annually based on the percentage increase in the regional median income limit for each housing region. In no event shall the maximum resale price established by the administrative agent be lower than the last recorded purchase price 10. The rent of low- and moderate-income units may be increased annually based on the permitted percentage increase in the Regional Income Limits chart. This increase shall not exceed nine (9%) percent in any one (1) year. Rents for units constructed pursuant to low- income housing tax credit regulations shall be indexed pursuant to the regulations governing low- income housing tax credits. 25-18.7 Utilities, a. Affordable units shall utilize the same type of heating source as market units within the affordable development. b. Those tenant-paid utilities that are included in the utility allowance shall be so stated in the lease and shall be consistent with the utility allowance approved by DCA for its Section 8 program. 25-18.8 Occupancy Standards. a. In referring certified households to specific restricted units, the administrative agent shall, to the extent feasible and without causing an undue delay in the occupancy of a unit. strive to: 1. Provide an occupant for each bedroom; 2. Provide children of different sexes with separate bedrooms; Provide separate bedrooms for parents and children; and, 4. Prevent more than two (2) persons from occupying a single bedroom. 25-18.9 Control Periods for Restricted Ownership Units and Enforcement Mechanisms. Control periods for restricted ownership units are pursuant to NJ.A.C. 5:80-26.5 and each restricted ownership unit shall remain subject to the

Restricted Ownership Units and Enforcement Mechanisms. Control periods for restricted ownership units are pursuant to NJ.A.C. 5:80-26.5 and each restricted ownership unit shall remain subject to the requirements of this ordinance for a period of at least thirty (30) years and thereafter until West Orange takes action by ordinance to release the unit from such requirements. Prior to such action, a restricted ownership unit must remain subject to the requirements of N.J.A.C. 5:80-26.1. a. The affordability control period for a restricted ownership unit shall commence on the date the initial certified household takes title to the unit. b. Prior to the issuance of the initial certificate of occupancy for a restricted ownership unit and upon each successive sale during the period of restricted ownership, the administrative agent shall determine the restricted price for the unit and shall also determine the non-restricted, 4844-7802-2092, v. 2

fair market value of the unit based on either an appraisal or the unit's equalized assessed value without the restrictions in place. a. At the time of the first sale of the unit, the initial purchaser shall execute and deliver to the administrative agent a recapture note obligating the purchaser (as well as the purchaser's heirs, successors and assigns) to repay, upon the first non-exempt sale after the unit's release from the requirements of this section, an amount equal to the difference between the unit's nonrestricted fair market value and its restricted price and the recapture note shall be secured by a recapture lien evidenced by a duly recorded mortgage on the unit. b. All conveyances of restricted ownership units shall be made by deeds and restrictive covenants pursuant to N.J.A.C. 5:80-26.1. c. The affordability controls set forth in this section shall remain in effect despite the entry and enforcement of any judgment of foreclosure with respect to restricted ownership units. d. A restricted ownership unit shall be required to obtain a Continuing Certificate of Occupancy or a certified statement from the Municipal Building Inspector stating that the unit meets all code standards upon the first transfer of title that follows the expiration of the applicable minimum control period provided under N.J.A.C. 5:80-26.5(a). 25-18.10 Price Restrictions for Restricted Ownership Units, Homeowner Association Fees, and Resale Prices. Price restrictions for restricted ownership units are pursuant to N.J.A.C. 5:80-26.1, including: a. The initial purchase price for a restricted ownership unit shall be approved by the administrative agent. b. The Administrative Agent shall approve all resale prices, in writing and in advance of the resale, to assure compliance with the foregoing standards. c. The master deeds of affordable developments shall provide no distinction between the condominium or homeowner association fees and special assessments paid by low- and moderate-income purchasers and those paid by market purchasers. d. The owners of restricted ownership units may apply to the administrative agent to increase the maximum sales price for the unit on the basis of capital improvements. Eligible capital improvements shall be those that render the unit suitable for a larger household or that add an additional bathroom. 25-18.11 Buyer Income Eligibility. a.

s of capital improvements. Eligible capital improvements shall be those that render the unit suitable for a larger household or that add an additional bathroom. 25-18.11 Buyer Income Eligibility. a. Buyer income eligibility for ownership units is pursuant to N.J.A.C. 5:80-26.1, such that low- income ownership units shall be reserved for households with a gross household income less than or equal to fifty (50%) percent of median income and moderate-income ownership units shall be reserved for households with a gross household income less than eighty (80%) percent of median income. b. Notwithstanding the foregoing, however, the administrative agent may, upon approval by the Township Council, and subject to the Court's approval, permit moderate-income purchasers to buy low-income units in housing markets if the administrative agent determines that there is an insufficient number of eligible low-income purchasers to permit prompt occupancy of the units. All such low-income units to be sold to moderate-income households shall retain the required pricing and pricing restrictions for low-income units. c. A certified household that purchases a restricted ownership unit must occupy it as the certified household's principal residence and shall not lease the unit; provided, however, that the administrative agent may permit the owner of a restricted ownership unit, upon 4844-7802-2092, v. 2

application and a showing of hardship, to lease the restricted unit to another certified household for a period not to exceed one (1) year. d. The Administrative Agent shall certify a household as eligible for a restricted ownership unit when the household is a low-income household or a moderate-income household, as applicable to the unit, and the estimated monthly housing cost for the unit (including principal, interest, taxes, homeowner and private mortgage insurance and condominium or homeowner association fees as applicable) does not exceed thirty-three (33%) percent of the household's eligible monthly income. 25-18.12 Limitations on Indebtedness Secured by Ownership Unit; Subordination. a. Prior to incurring any indebtedness to be secured by a restricted ownership unit, the owner shall apply to the administrative agent for a determination in writing that the proposed indebtedness complies with the provisions of this Section, and the administrative agent shall issue such determination prior to the owner incurring such indebtedness. b. With the exception of first purchase money mortgages, neither an owner nor a lender shall at any time cause or permit the total indebtedness secured by a restricted ownership unit to exceed ninety five (95%) percent of the maximum allowable resale price of the unit, as such price is determined by the administrative agent in accordance with N.J.A.C. 5:80-26.6(b). 25-18.13 Capital Improvements to Ownership Unit. a. The owners of restricted ownership units may apply to the administrative agent to increase the maximum sales price for the unit on the basis of capital improvements made since the purchase of the unit. Eligible capital improvements shall be those that render the unit suitable for a larger household or that adds an additional bathroom. In no event shall the maximum sales price of an improyed housing unit exceed the limits of affordability for the larger household. b. Upon the resale of a restricted ownership unit, all items of property that are permanently affixed to the unit or were included when the unit was initially restricted (for example, refrigerator, range, washer, dryer, dishwasher, wall-to-wall carpeting) shall be included in the maximum allowable resale price. Other items may be sold to the purchaser at a reasonable price that has been approved by the administrative agent at the time of the signing

g) shall be included in the maximum allowable resale price. Other items may be sold to the purchaser at a reasonable price that has been approved by the administrative agent at the time of the signing of the agreement to purchase. The purchase of central air conditioning installed subsequent to the initial sale of the unit and not included in the base price may be made a condition of the unit resale provided the price. which shall be subject to ten (10)-year, straight-line depreciation, has been approved by the administrative agent. Unless otherwise approved by the administrative agent, the purchase of any property other than central air conditioning shall not be made a condition of the unit resale. The owner and the purchaser must personally certify at the time of closing that no unapproved transfer of funds for the purpose of selling and receiving property has taken place at the time of or as a condition of resale. 25-18.14 Control Period for Restricted Rental Units. Control periods for restricted rental units shall be in accordance with NwJ.A.C. 5: 11, and each restricted rental unit shall remain subject to the requirements of this section for a period of at least thirty (30) years and thereafter until West Orange takes action by ordinance to release the unit from such requirements, however, prior to such a municipal election, a restricted rental unit must remain subject to the requirements of N.J.A.C. 5:80-26.11. For new projects receiving nine percent low income housing tax credits, a control period of not less than a thirty (30) year compliance period plus a fifteen (15) year extended use period shall be required. 10 4844-7802-2092, v. 2

a. Deeds of all real property that include restricted rental units shall contain deed restriction language, the deed restriction shall have priority over all mortgages on the property and the deed restriction shall be filed by the developer or seller with the records office of the county and a copy of the filed document shall be provided to the administrative agent within thirty (30) days of the receipt of a Certificate of Occupancy. Neither the unit nor its affordability designation shall change throughout the term of the deed restriction. b. A restricted rental unit shall remain subject to the affordability controls of this section, despite the occurrence of any of the following events: 1. Sublease or assignment of the lease of the unit; 2. Sale or other voluntary transfer of the ownership of the unit; or 3. The entry and enforcement of any judgment of foreclosure on the property containing the unit. 25-18.15 Rent Restrictions for Rental Units; Leases. a. A written lease shall be required for all restricted rental units and tenants shall be responsible for security deposits and the full amount of the rent as stated on the lease. A copy of the current lease for each restricted rental unit shall be provided to the administrative agent. b. No additional fees or charges shall be added to the approved rent (except, in the case of units in an assisted living residence, to cover the customary charges for food and services) without the express written approval of the administrative agent. c, Application fees (including the charge for any credit check) shall not exceed five percent of the monthly rent of the applicable restricted unit and shall be payable to the administrative agent to be applied to the costs of administering the controls applicable to the unit as set forth in this chapter. d. No rent control ordinance or other pricing restriction shall be applicable to either the market units or the affordable units in any development in which at least fifteen (15%) percent of the total number of dwelling units are restricted rental units in compliance with this chapter. 25-18.16 Tenant Income Eligibility. Pursuant to N.J.A.C. 5:80-26.13, tenant income eligibility shall be determined as follows: a. Low-income rental units shall be reserved for households with a gross household income less than or equal to fifty (50%) percent of median income.

ncome eligibility shall be determined as follows: a. Low-income rental units shall be reserved for households with a gross household income less than or equal to fifty (50%) percent of median income. Moderate-income rental units shall be reserved for households with a gross household income less than eighty (80%) percent of median income. Very-low-income rental units shall be reserved for households with a gross household income of thirty (30%) percent or less of median income. b. The Administrative Agent shall certify a household as eligible for a restricted rental unit when the household is a low-income household or a moderate-income household, as applicable to the unit, and the rent proposed for the unit does not exceed thirty-five (35%) percent (forty (40%) percent for age-restricted units) of the household's eligible monthly income as determined pursuant to N.J.A.C. 5:80-26.16; provided, however, that this limit may be exceeded if one or more of the following circumstances exists: 1. The household currently pays more than thirty-five (35%) percent (forty (40%) percent for households eligible for age-restricted units) of its gross household income for rent and the proposed rent will reduce its housing costs; 11 4844-7802-2092, v. 2

be The household has consistently paid more than thirty-five (35%) percent (forty (40%) percent for households eligible for age-restricted units) of eligible monthly income for rent in the past and has proven its ability to pay; 3. The household is currently in substandard or overcrowded living conditions; 4. The household documents the existence of assets, with which the household proposes to supplement the rent payments; or o The household documents reliable anticipated third-party assistance from an outside source such as a family member in a form acceptable to the administrative agent and the owner of the unit. ce. The applicant shall file documentation sufficient to establish the existence of the circumstances in paragraph b. above with the Administrative Agent, who shall counsel the household on budgeting. 25-18.17 Municipal Housing Liaison. a. The Court requires West Orange to appoint a specific municipal employee to serve as a Municipal Housing Liaison responsible for administering its affordable housing program, including affordability controls and the Affirmative Marketing Plan, and, where applicable, supervising any Administrative Agent. West Orange adopted an ordinance creating the position of Municipal Housing Liaison. West Orange adopted a resolution on May 23, 2006 appointing a Municipal Housing Liaison. The Municipal Housing Liaison shall be appointed by the Governing Body and may be a full or part time municipal employee. b. The Municipal Housing Liaison shall be responsible for oversight and administration of the affordable housing program for West Orange, including the following responsibilities which may not be contracted out, exclusive of paragraph 6 which may be contracted out: 1. Serving as West Orange's primary point of contact for all inquiries from the State, affordable housing providers, Administrative Agents, and interested households; 2. Monitoring the status of all restricted units in West Orange's Fair Share Plan; Compiling, verifying, and submitting annual reports as required; mes Coordinating meetings with affordable housing providers and Administrative Agents, as applicable; 5. Attending continuing education opportunities on affordability controls, compliance monitoring, and affirmative marketing as offered: 6. If applicable, serving as the Administrative Agent for some or all of the restricted units in West