ASSEMBLY, No. 2318







By Assemblywoman GILL



An Act establishing a mortgage assistance program for certain law enforcement officers and amending and supplementing P.L.1983, c.530 (C.55:14K-1 et seq.).


    Be It Enacted by the Senate and General Assembly of the State of New Jersey:


    1. (New section) This act shall be known and may be cited as the "Secure Neighborhood Mortgage Assistance Program."


    2. (New section) The Legislature finds and declares that:

    a. Some of the neighborhoods in New Jersey's older and financially strained urban municipalities are deteriorating;

    b. Frightened by rising local crime rates, families and longtime residents of these communities are abandoning them;

    c. Battered by this cycle of deterioration, crime and suburban flight, these neighborhoods are trapped in a downward spiral toward dilapidation and blight;

    d. The vitality of our urban municipalities depends upon the stability and viability of their local communities and neighborhoods;

    e. To reverse this trend and to revive these neighborhoods, the fear of crime and concern about personal physical safety must be eliminated;

    f. State aid programs which put additional law enforcement officers on duty in those neighborhoods serve to alleviate some of that fear and concern;

    g. A program designed to encourage law enforcement officers to live in those communities would further reduce those fears and concerns and could significantly contribute to the revival of those neighborhoods; and

    h. It is, therefore, within the public interest to establish a mortgage program to assist law enforcement officers in purchasing homes located in designated neighborhoods.

    3. (New section) As used in this act:

    "Agency" means the New Jersey Housing and Mortgage Finance Agency.

    "Certified property" means a residential property which is located in a participating neighborhood and that is the primary residence of the qualified applicant.

    "Eligible municipality" means a municipality which qualifies for State aid under the provisions of P.L.1978, c.14 (C.52:27D-178 et seq.).

    "Participating neighborhood" means a portion or portions of the eligible municipality, identified by the governing body, wherein the provisions of the program established under this act are applicable.

    "Program" means the secure neighborhood mortgage assistance program established under this act.

    "Qualified applicant" means a fulltime law enforcement officer employed by an eligible municipality.


    4. (New section) There is established a secure neighborhood mortgage assistance program. The purpose of the program is to provide mortgage assistance to law enforcement officers seeking to purchase homes in specially designated neighborhoods of their employing municipality. The assistance afforded under this act may be in the form of low interest mortgages, minimal or no down payment requirements, or both, and such other incentives as the Home Mortgage and Finance Agency may deem appropriate to assist qualified applicants in purchasing homes in participating neighborhoods. To fund this program, the agency shall set aside a reasonable portion of the moneys designated for programs designed to assist first time home buyers and neighborhood preservation.


    5. (New section) The governing body of any eligible municipality, by ordinance, may determine to participate in the secure neighborhood mortgage assistance program. In addition to such other information as the agency may require, the ordinance shall set forth the participating neighborhoods, identified by their street boundaries, and identify a municipal official who shall assist each qualified applicant in preparing his application to the agency and be responsible for forwarding that application to the agency. The ordinance may, if the governing body so determines, provide that the program be available only to qualified applicants who have been employed by the eligible municipality for more than a specified number of years.


    6. Section 5 of P.L.1983, c.530 (C.55:14K-5) is amended to read as follows:

    5. In order to carry out the purposes and provisions of this act, the agency, in addition to any powers granted to it elsewhere in this act, shall have the following powers:

    a. To adopt bylaws for the regulation of its affairs and the conduct of its business; to adopt an official seal and alter the same at pleasure; to maintain an office at such place or places within the State as it may designate; to sue and be sued in its own name;

    b. To conduct examinations and hearings and to hear testimony and take proof, under oath or affirmation, at public or private hearings, on any matter material for its information and necessary to carry out the provisions of this act;

    c. To issue subpoenas requiring the attendance of witnesses and the production of books and papers pertinent to any hearing before the agency, or before one or more of the members of the agency appointed by it to conduct a hearing;

    d. To apply to any court, having territorial jurisdiction of the offense, to have punished for contempt any witness who refuses to obey a subpoena, or who refuses to be sworn or affirmed to testify, or who is guilty of any contempt after summons to appear;

    e. To acquire by purchase, gift, foreclosure or condemnation any real or personal property, or any interest therein, to enter into any lease of property and to hold, sell, assign, lease, encumber, mortgage or otherwise dispose of any real or personal property, or any interest therein, or mortgage lien interest owned by it or under its control, custody or in its possession and release or relinquish any right, title, claim, lien, interest, easement or demand however acquired, including any equity or right of redemption, in property foreclosed by it and to do any of the foregoing by public or private sale, with or without public bidding, notwithstanding the provisions of any other law;

    f. To acquire, hold, use and dispose of its income revenues, funds and moneys;

    g. To adopt rules and regulations expressly authorized by this act and such additional rules and regulations as shall be necessary or desirable to carry out the purposes of this act. The agency shall adopt regulations which provide for consultation with housing sponsors regarding the formulation of agency rules and regulations governing the operation of housing projects and which require the agency to consult with the affected housing sponsor prior to taking any and all specific proposed agency actions relating to the sponsor's housing project. The agency shall publish all rules and regulations and file them with the Secretary of State;

    h. To borrow money or secure credit on a temporary, short-term, interim or long-term basis, and to issue negotiable bonds and to secure the payment thereof and to provide for the rights of the holders thereof;

    i. To make and enter into and enforce all contracts and agreements necessary, convenient or desirable to the performance of its duties and the execution of its powers under this act, including contracts or agreements with qualified financial institutions for the servicing and processing of eligible loans owned by the agency;

    j. To appoint and employ an executive director, who shall be the chief executive officer of the agency, and additional officers, who need not be members of the agency as the agency deems advisable, and to employ architects, engineers, attorneys, accountants, construction and financial experts and other employees and agents as may be necessary in its judgment and to determine their qualifications, terms of office, duties and compensation; and to promote and discharge such officers, employees and agents, all without regard to the provisions of Title 11 of the Revised Statutes, Civil Service;

    k. To contract for and to receive and accept any gifts, grants, loans or contributions from any source, of money, property, labor or other things of value, to be held, used and applied to carry out the purposes of this act subject to the conditions upon which the grants and contributions may be made, including, but not limited to, gifts or grants from any department or agency of the United States or the State for payment of rent supplements to eligible families or for the payment in whole or in part of the interest expense for a housing project or for any other purpose consistent with this act;

    l. To enter into agreements to pay annual sums in lieu of taxes to any political subdivision of the State with respect to any real property owned or operated directly by the agency;

    m. To procure insurance against any loss in connection with its operations, property and other assets (including eligible loans) in the amounts and from the insurers it deems desirable;

    n. To the extent permitted under its contract with the holders of bonds of the agency, to consent to any modification with respect to rate of interest, time and payment of any installment of principal or interest, security or any other terms of any loan to an institutional lender, eligible loan, loan commitment, contract or 8 agreement of any kind to which the agency is a party;

    o. To the extent permitted under its contract with the holders of bonds of the agency, to enter into contracts with any housing sponsor containing provisions enabling the housing sponsor to reduce the rental or carrying charges to persons unable to pay the regular schedule of charges where, by reason of other income or payment from the agency, any department or agency of the United States or the State, these reductions can be made without jeopardizing the economic stability of the housing project;

    p. To make and collect the fees and charges it determines are reasonable;

    q. To the extent permitted under its contract with the holders of bonds of the agency, to invest and reinvest any moneys of the agency not required for immediate use, including proceeds from the sale of any obligations of the agency, in obligations, securities or other investments as the agency deems prudent. All functions, powers and duties relating to the investment or reinvestment of these funds, including the purchase, sale or exchange of any investments or securities may, upon the request of the agency, be exercised and performed by the Director of the Division of Investment in the Department of the Treasury, in accordance with written directions of the agency signed by an authorized officer, without regard to any other law relating to investments by the Director of the Division of Investment;

    r. To provide, contract or arrange for, where, by reason of the financing arrangement, review of the application and proposed construction of a project is required by or in behalf of any department or agency of the United States, consolidated processing of the application or supervision or, in the alternative, to delegate the processing in whole or in part to any such department or agency;

    s. To make eligible loans, and to participate with any department, agency or authority of the United States or of any state thereof, this State, a municipality, or any banking institution, foundation, labor union, insurance company, trustee or fiduciary in an eligible loan, secured by a single participating mortgage, by separate mortgages or by other security agreements, the interest of each having equal priority as to lien in proportion to the amount of the loan so secured, but which need not be equal as to interest rate, time or rate of amortization or otherwise, and to undertake commitments to make such loans;

    t. To assess from time to time the housing needs of any municipality which is experiencing housing shortages as a result of the authorization of casino gaming and to address those needs when planning its programs;

    u. To sell any eligible loan made by the agency or any loan to an institutional lender owned by the agency, at public or private sale, with or without bidding, either singly or in groups, or in shares of loans or shares of groups of loans, issue securities, certificates or other evidence of ownership secured by such loans or groups of loans, sell the same to investors, arrange for the marketing of the same; and to deposit and invest the funds derived from such sales in any manner authorized by this act;

    v. To make commitments to purchase, and to purchase, service and sell, eligible loans, pools of loans or securities based on loans, insured or issued by any department or agency of the United States, and to make loans directly upon the security of any such loan, pools of loans or securities;

    w. To provide such advisory consultation, training and educational services as will assist in the planning, construction, rehabilitation and operation of housing including but not limited to assistance in community development and organization, home management and advisory services for residents and to encourage community organizations and local governments to assist in developing housing;

    x. To encourage research in and demonstration projects to develop new and better techniques and methods for increasing the supply, types and financing of housing and housing projects in the State and to engage in these research and demonstration projects and to receive and accept contributions, grants or aid, from any source, public or private, including but not limited to the United States and the State, for carrying out this purpose;

    y. To provide to housing sponsors, through eligible loans or otherwise, financing, refinancing or financial assistance for fully completed, as well as partially completed, projects which may or may not be occupied, if the projects meet all the requirements of this act, except that, prior to the making of the mortgage loans by the agency, said projects need not have complied with sections 7a.(9) and 42 of this act;

    z. To encourage and stimulate cooperatives and other forms of housing with tenant participation;

    aa. To promote innovative programs for home ownership, including but not limited to lease-purchase programs, employer-sponsored housing programs, such as the mortgage assistance program for law enforcement officers established pursuant to P.L. , c. (C. )(now before the Legislature as this bill), and tenant cooperatives;

    bb. To set aside and designate, out of the funds that are or may become available to it for the purpose of financing housing in this State pursuant to the terms of this act, certain sums or proportions thereof to be used for the financing of housing and home-ownership opportunities, including specifically lease-purchase arrangements, provided by employers to their employees through nonprofit or limited-dividend corporations or associations created by employers for that purpose; and to establish priority in funding, offer bonus fund allocations, and institute other incentives to encourage such employer-sponsored housing and home-ownership opportunities;

    cc. Subject to any agreement with bondholders, to collect, enforce the collection of, and foreclose on any property or collateral securing its eligible loan or loans to institutional lenders and acquire or take possession of such property or collateral and sell the same at public or private sale, with or without bidding, and otherwise deal with such collateral as may be necessary to protect the interests of the agency therein;

    dd. To administer and to enter into agreements to administer programs of the federal government or any other entity which are in furtherance of the purposes of this act;

    ee. To do and perform any acts and things authorized by this act under, through, or by means of its officers, agents or employees or by contract with any person, firm or corporation; and

    ff. To do any acts and things necessary or convenient to carry out the powers expressly granted in this act.

(cf: P.L.1983, c.530, s.5)


    7. This act shall take effect on the first day of the third month following enactment.





    This bill establishes a special mortgage assistance program, the Secure Neighborhood Mortgage Assistance Program, to encourage local law enforcement officers to purchase homes in specially designated neighborhoods of their employer municipality.

    Concerns about rising crime rates and personal safety are responsible for many families and longtime residents abandoning their neighborhood homes in some of New Jersey's more urban municipalities. Since the vitality of our urban municipalities depends upon the stability and viability of their local communities and neighborhoods, it is essential that these concerns about crime and for personal safety be addressed. One way to accomplish that objective is to establish a program that encourages and assists municipal law enforcement officers to purchase homes in local neighborhoods.

    Under the provisions of this bill, low interest mortgages, low or no down payment offerings, and other such incentives would be available to law enforcement officers who wish to purchase a home in a specially designated neighborhood. The program would be administered by the New Jersey Housing and Mortgage Finance Agency. To participate in the program, the governing body of the municipality must adopt an ordinance, designate the neighborhoods where the purchases must be made, and identify a local official to assist interested law enforcement officers in applying for the assistance.

    The program would only be available to law enforcement officers employed by municipalities which qualify for the State's "urban aid" program.




Establishes "Secure Neighborhood Mortgage Assistance Program."