Borough of Avon-by-the-Sea, NJ
Monmouth County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Board of Commissioners of the Borough of Avon-by-the-Sea 6-15-98 by Ord. No. 11-1998. Amendments noted where applicable.]
This chapter shall be known and may be cited as the "Affordable Housing Ordinance of the Borough of Avon-by-the-Sea."
The purpose of this chapter is to establish a mechanism for assuring that housing units designated for occupancy by low and moderate income households remain affordable to and occupied by low and moderate income households.
The following terms, wherever used or referenced to in this chapter, shall have the following meanings unless a different meaning clearly appears from the context:
AFFORDABLE HOUSING PLAN
An instrument to be recorded with the office of the Recorder, Monmouth County, New Jersey, constituting restrictive covenants running with the land with respect to the low and moderate income units described and identified in such instrument. The instrument shall set forth the terms, restrictions and provisions applicable to the low and moderate income units and shall be consistent with this chapter concerning use, occupancy, sale, resale, rental, rerental, sales price and rental determination, duration of restrictions, exempt transactions, hardship exemptions, foreclosure, violation, legal description of the specific low and moderate income units governed by the instrument, determination of eligible purchasers and owners, responsibilities of owners and improvements and creating the liens and rights of AHMS upon such low and moderate income units, authorizing AHMS or, in the alternative, Avon Borough to enforce the restrictive covenants referred to herein, all as such provisions of this chapter exist at the time that the instrument is executed by AHMS. The terms, restrictions, and provisions of the instrument shall bind all purchasers and owners of any low and moderate income units, their heirs and assigns and all persons claiming by, through or under their heirs, assigns and administrators. If a single instrument is used to govern more than one (1) low and moderate income unit, then the instrument must identify the location of each low and moderate income unit governed by the instrument, and the deed of each and every individual low and moderate income unit so governed must contain the recording information of the instrument applicable to such low and moderate income units. It is intended that the terms of the Affordable Housing Plan be wholly consistent with this chapter and the rules and regulations of AHMS, as such chapter and rules and regulations of AHMS existed on the date the Affordable Housing Plan is executed by AHMS; however, in the event of conflict or inconsistency, this chapter and rules and regulations subsequent to the date of an Affordable Housing Plan shall not affect, amend or alter the Affordable Housing Plan, and such Affordable Housing Plan shall continue to be interpreted and applied in accordance with this chapter and rules and regulations as same existed on the date of the particular Affordable Housing Plan. Such instrument shall be executed by AHMS prior to recording of the Affordable Housing Plan, and AHMS shall certify that current Affordable Housing Ordinance and rules and regulations. The instrument shall also be executed by the developer and/or the then current title holder of record of the property upon which the low and moderate income units are to be constructed.
AHMS
The Department of Community Affairs' Affordable Housing Management Service.
ASSESSMENTS
Taxes, levies, charges or assessments both public and private, including those imposed by the association, as the applicable case may be upon the low and moderate income units which are part of the association.
COAH
The Council on Affordable Housing.
DEVELOPMENT FEES
Money paid by an individual, person, partnership, association, company or corporation for the improvement of property as permitted by N.J.A.C. 5:93-8 et seq.
EQUALIZED ASSESSED VALUE
The value of a property determined by the Municipal Tax Assessor through a process designed to ensure that all property in the municipality is assessed at the same assessment ratio or ratios required by law. Estimates at the time of building permit may be obtained by the Tax Assessor utilizing estimates for construction cost. Final equalized assessed value will be determined at project completion by the Municipal Tax Assessor.
FIRST PURCHASE MONEY MORTGAGE
The most senior mortgage lien to secure repayment of funds for the purchase of low and moderate income units.
FIRST PURCHASE MONEY MORTGAGEE
The holder and/or assigns of the first purchase money mortgage and which must also be an institutional lender or investor, licensed or regulated by a state or federal government or an agency thereof. Other lenders, investors or persons may be holders of a first purchase money mortgage; however, for the purposes of this chapter, such other lenders, investors, or persons shall not be "first purchase money mortgagees."
FORECLOSURE
A termination of all rights of the mortgagor or the mortgagor's assigns or grantees in a low and moderate income unit covered by a recorded mortgage through legal processes, or through a deed in lieu of foreclosure which has been executed and delivered prior to a judicially regulated sale.
GROSS AGGREGATE HOUSEHOLD INCOME
The total annual income from all sources of all members of the household or family, except income received by a family household member (other than the family head, spouse or foster children) who is under the age of eighteen (18) years or a full-time student of any age. Income includes but is not limited to compensation for employment services, interest, dividends, rent, pension benefits, government benefits, unemployment compensation, welfare payments, disability income, support payments and return-on-assets income as defined herein.
HOUSEHOLD
One (1) or more persons living as a single nonprofit housekeeping unit, whether or not they are related by blood, marriage or otherwise.
HOUSING TRUST FUND
The interest bearing account in which all development fees will be deposited pursuant to N.J.A.C. 5:93-8.15.
IMPROVEMENT
Additions within a low and moderate income unit, including materials, supplies, appliances or fixtures which become a permanent part of, or affixed to, such low and moderate income units.
INCLUSIONARY DEVELOPMENT
A development containing low and moderate income units, the term includes, but is not necessarily limited to, new construction, the conversion of a nonresidential structure to a residential structure, and the creation of new low and moderate income units through the substantial rehabilitation of a vacant residential structure.
INCOME CEILING
Eighty percent (80%) of the regional median income for moderate income households and fifty percent (50%) of the regional median income for low income households, with adjustments for household size.
JUDGMENT OF REPOSE
A judgment entered by the Superior Court approving a municipality's plan to satisfy its fair share obligation.
LOW INCOME HOUSEHOLD
A household with a gross aggregate household income which does not exceed fifty percent (50%) of the regional median income, with adjustments for household size.
LOW INCOME PURCHASER
A low income household purchasing either a low income unit or a moderate income unit, as the case may be.
LOW INCOME UNIT
A unit which is affordable to a low income household.
MARKET UNIT
Any residential unit within a development which is not designated as a low and moderate income unit.
MODERATE INCOME HOUSEHOLD
A household with a gross aggregate household income which is greater than fifty percent (50%) of the regional median income, but which does not exceed eighty percent (80%) of said regional median income, with adjustments for household size.
MODERATE INCOME PURCHASER
A moderate income household purchasing a moderate income unit.
MODERATE INCOME UNIT
A unit which is affordable to a moderate income household.
NET FAMILY ASSETS
The value of equity in real property, including gains from the sale of real property, savings and other forms of capital investment, but not including equity in a business or farm operation where that business or farm operation is the principal means of support of the household, amounts in an irrevocable trust fund or the value of personal property (e.g., car, furniture, etc.).
OWNER
The then current title holder of record of a low or moderate income unit. "Owner" shall refer to and mean the title holder of record as the same is reflected in the most recently dated and recorded deed for the particular low and moderate income unit. For purposes of the initial sale or rental of any low or moderate income unit, "owner" shall include the developer/owner of the land upon which the low and moderate income unit is to be constructed. Ownership of a low and moderate income unit shall be deemed to be acceptance and ratification of the provisions of this chapter and the Affordable Housing Plan. Where appropriate, the term "owner" shall also mean and refer to a person who owns a low and moderate income unit as a landlord or who occupies a low and moderate income unit as a tenant. "Owner" shall not include any cosigner or co-borrower on any purchase money mortgage unless such cosigner or co-borrower is also a named title holder of record of such low and moderate income unit.
QUALIFIED PURCHASER
A person who, pursuant to this chapter and the Affordable Housing Plan, submits an application for certification as a qualified purchaser to AHMS and whose gross aggregate household income at the time of proposed purchase of a low and moderate income unit is within low and moderate income levels, as these income levels are designated herein, and in the case of a development unit, the approval from a lending institution meeting the minimum qualifications set forth herein for issuance of a commitment for a mortgage to purchase a low and moderate income unit is within low and moderate income levels, as these income levels are designated herein, and in the case of a development unit, the approval from a lending institution meeting the minimum qualifications set forth herein for issuance of a commitment for a mortgage to purchase a low and moderate income unit and who obtains certification as a qualified purchaser of a low and moderate income unit from AHMS pursuant to the rules and regulations of AHMS. Once a "qualified purchaser" becomes an owner of a lower income unit in accordance with the provisions of this chapter, any increase or decrease in the gross aggregate household income of such owner shall not affect ownership rights, privileges or obligations of a person or family who occupies the low and moderate income unit subject to the qualifications and conditions stated above and elsewhere herein. Any person who submits false information in support of an application for certification and who subsequently received such certification and either title to a low and moderate income unit as owner or possession of a low and moderate income unit as tenant shall be deemed to have committed a substantial breach of the provisions of this chapter and the Affordable Housing Plan, and any right of ownership of such unit shall be subject to forfeiture pursuant to the provisions of Section 114-11C of this chapter. A "qualified purchaser" shall not be permitted to own more than one (1) low and moderate income unit at the same time.
REGIONAL MEDIAN INCOME, MERCER, OCEAN AND MONMOUTH
The median household income shall mean and refer to the annual median income of the Mercer, Ocean and Monmouth County housing region as determined by COAH.
RETURN-ON-ASSETS INCOME
When the household's total net family assets exceed five thousand dollars ($5,000), the gross aggregate household income shall include the dollar amount resulting from multiplying the value of the household's total net family assets by ten percent (10%) after excluding the first five thousand dollars ($5,000) in assets.
A. 
The Borough hereby designates AHMS with the responsibilities for administering the Borough's responsibilities related to ensuring controls on affordability, pricing low and moderate income households, affirmative marketing, and referring income qualified households to low and moderate income housing. AHMS shall also work with the Borough in completing monitoring forms required by the court.
B. 
The Borough hereby designates the Borough's Clerk or such other municipal official that may be appointed by the Borough's Board of Commissioners as its liaison to AHMS. The Clerk or other municipal official shall be responsible for assisting AHMS in completing its responsibilities.
C. 
AHMS responsibilities.
(1) 
To determine the maximum sale, resale, and rental charges for low or moderate income units and to provide certification of the same to the developer. Said sales and rental prices shall be adjusted annually to reflect recalculations of the regional median income.
(2) 
To prequalify prospective owners and renters based upon income and household size and to issue a certificate as to income eligibility status.
(3) 
To establish selection procedures and criteria for determining qualified purchasers and households.
(4) 
To verify that an Affordable Housing Plan has been recorded and the deeds of individual low and moderate income units reference such Affordable Housing Plan.
(5) 
To develop a formula for use in calculating the maximum resale price of low and moderate income units which is consistent with the provisions of Section 114-20 of this chapter.
(6) 
To determine whether the cost or value of the installation of improvements or amenities within or as part of a low or moderate income unit should be included in the calculation of the resale price or rental charge for the unit and to establish guidelines whereby a homeowner can obtain a determination from AHMS in this regard prior to the time the improvements are made. In no event may the maximum homeowner's/renter's housing cost exceed the maximum homeowner's/renter's housing cost permitted pursuant to COAH's rules for the number of bedrooms within the housing unit.
(7) 
To review and to approve or disapprove the Affordable Housing Plan required of all developers of low and moderate income housing.
(8) 
To review and approve or disapprove the developer's proposed affirmative marketing plan and to require developers to submit proofs of publication in accordance with approved affirmative marketing plans, and to monitor the marketing practices of developers of low and moderate income units to ensure that they comply with the affirmative marketing requirements of this chapter.
(9) 
To report semiannually to the Board of Commissioners and Borough Planning Board on the status of low and moderate income units, including but not limited to such things as AHMS' actions in connection with any statements of exemption and foreclosures upon any low and moderate income units.
(10) 
AHMS shall at all times maintain a waiting list of qualified purchasers and shall provide said list to any owner in the event of default proceedings.
D. 
Fees.
(1) 
Developers of low and moderate income housing shall be responsible for reimbursing AHMS for its services as provided in N.J.S.A. 52:27D-324 upon initial sale.
(2) 
Owners of low and moderate income housing units shall be responsible for reimbursing AHMS for its services as provided in N.J.S.A. 52:27D-324 upon subsequent sales.
(3) 
Owners of rental low and moderate income units shall be responsible for reimbursing AHMS for its services as provided in N.J.S.A. 52:27D-324 upon each rental.
(4) 
In addition to the above fees, each and every applicant for low and moderate income housing shall be responsible for any application fee required by AHMS.
A. 
Wherever reference is made to low or moderate income housing in the Borough's Zoning Ordinance, the standards, definitions and procedures set forth in this section shall apply.
B. 
Except as otherwise expressly provided herein, no low income unit shall be offered for sale or rental except at prices that are affordable by low income households, and no moderate income unit shall be offered for sale or rental except at prices that are affordable by moderate income households, and, except as otherwise expressly provided herein, no low income unit shall be sold, resold, rented or rerented except to a household that has been qualified as a low income household by AHMS. The provisions of this subsection shall apply equally to qualified low and moderate income units or renters in terms of controls on sale, resale, rental, or rerental of any low and moderate income unit.
C. 
However, nothing contained in this chapter or in the rules and regulations promulgated by AHMS shall restrict or preclude any household which was classified as low or moderate income based upon its gross aggregate household income at the time it purchased or leased a low or moderate income unit from continuing to own or lease said unit after its income exceeds the income ceilings established in this chapter.
D. 
Prospective purchasers of low and moderate income units shall receive, prior to or simultaneously with the execution of the contract to purchase a low and moderate income unit, a copy of the Affordable Housing Plan and shall execute a disclosure statement which briefly summarizes the salient features of the use, occupancy and resale restrictions applicable to the low and moderate income unit. It shall be the developer's responsibility to provide such for the initial sales and subsequent owner's responsibility to provide the same for resales. The developer shall record the Affordable Housing Plan prior to conveying any title to any individual low and moderate income unit, and the deeds and leases of individual low and moderate income units must reference such recorded Affordable Housing Plan.
E. 
The bylaws of the homeowner's association shall provide that the proportional relationship between the condominium fees initially assessed against market units and lower income units upon initial sale shall be held constant over time with changes in the assessments. Further, the public offering statement for any market units in inclusionary developments shall clearly disclose this proportional relationship to prospective purchasers.
A. 
AHMS shall designate an application period during which applications to purchase affordable housing units will be accepted.
B. 
Applications shall be accepted only if submitted on an application form prepared and/or approved by AHMS. Applications shall be completely filled out and notarized. Knowingly or intentionally making any false statement on a form shall be grounds for disqualifying an applicant even if the applicant is otherwise eligible. In placing households in low and moderate income units, the following verification and certification procedures shall be employed:
(1) 
Every household member eighteen (18) years of age or over who will live in the affordable unit and receives income shall be required to provide income documentation as applicable and determined by the reviewer for AHMS. This includes income received by adults on behalf of minor children for their benefit. Household members eighteen (18) years of age or over not receiving income must produce documentation of current status.
(2) 
Verification may include, but is not limited to, the following:
(a) 
Four (4) consecutive pay stubs including overtime, bonuses, or tips dated within one hundred twenty (120) days of the interview date or a letter from an employer stating present annual income figure as projected annually;
(b) 
A copy of regular IRS Form 1040 (Tax computation form), 1040A, or 1040 EZ as applicable and State income tax returns filed for each of the three years prior to the date of interview;
(c) 
A letter or appropriate reporting form verifying benefits such as Social Security, unemployment, welfare, disability or pension income (monthly or annually);
(d) 
A letter or appropriate reporting form verifying any other sources on income claimed by the applicant such as alimony and child support;
(e) 
Reports that verify income from assets to be submitted by banks or other financial institutions managing trust funds, money market accounts, certificates of deposits, stocks or bonds;
(f) 
Evidence or reports of income from assets such as real estate or businesses that are directly held by any household member;
(g) 
Evidence or reports that verify assets that do not earn regular income such as non-income-producing real estate or savings that do not earn interest; and
(h) 
A notarized statement of explanation in such form as to be satisfactory to AHMS.
(3) 
Generally, sources of annual income shall be based on regular income reported to the IRS and which can be utilized for mortgage approval. Household annual gross income shall be calculated by projecting current gross income over a twelve (12) month period.
(4) 
Income includes but is not limited to wages, salaries, tips, commissions, alimony, regularly scheduled overtime, pensions, social security, unemployment compensation, AFDC, verified regular child support, disability, net income from business or real estate, and income from assets such as savings, CDs, money market, mutual funds, stocks and bonds and imputed income from non-income-producing assets such as equity in real estate.
(5) 
Assets not earning a verifiable income shall have an imputed interest income using a current average annual savings interest rate. Assets not earning income include present real estate equity. Applicants owning real estate must produce documentation of a market value appraisal and outstanding mortgage debt. The difference will be treated as the monetary value of the asset and the imputed interest added to income.
(6) 
Income from assets that have delayed earnings, such as IRAs or annuity programs shall not be included in current income until such payments are being received. However, these assets must be reported and verified.
(7) 
Net rent from real estate is considered income after the monthly mortgage payment including real estate taxes and insurance is deducted. Other expenses are not deductible. In addition, the equity in the rented real estate is considered an asset and will have the imputed interest income on the calculated value of equity added to income.
(8) 
Income does not include payments, rebates or credits received under Federal or State low income home energy assistance programs, Food Stamps, payments received for care of foster children, relocation assistance benefits, income of live-in attendants, scholarships, student loans, personal property such as automobiles, lump-sum additions to family assets such as inheritances, one-time lottery winnings, and insurance settlements except for additional income earned from these additions, and causal, sporadic or irregular gifts and bonuses.
(9) 
Standard credit information services that provide conventional credit and tenant reports may be utilized when certifying a household with required written permission from the household. An unsatisfactory credit history or credit information that demonstrates a disproportionate debt to income ratio may result in a denial of certification. Court-ordered payments for alimony or child support to another household shall be considered a regular monthly debt whether or not it is being paid regularly.
(10) 
Households whose total gross annual income is measured at fifty percent (50%) or below fifty percent (50%) of the authorized median income guideline shall be certified as low income households and referred to units designated for low income households.
(11) 
Households whose total gross annual income is measured above fifty percent (50%) but below eighty percent (80%) of the authorized median income shall be certified as moderate income households and referred to units designated for moderate income households.
(12) 
Generally, households will be referred to units where predetermined total monthly housing costs correspond to the household's calculated ability to pay using twenty-eight percent (28%) of gross monthly income as a standard for home ownership and thirty percent (30%) of gross monthly income as a standard for rental units.
(13) 
At the discretion of AHMS, households may also be required to produce documentation of household composition for determining the correct unit size and the applicable median income guide.
(14) 
Generally, households will be referred to available units using the following standards for occupancy:
(a) 
A maximum of two (2) persons per bedroom;
(b) 
Children of same sex in same bedroom;
(c) 
Unrelated adults or persons of the opposite sex other than husband and wife in separate bedrooms; and
(d) 
Children not in same bedroom with parents.
(15) 
Households may be considered for units other than as above, but in no case shall a household be referred to a unit that provides for more than one (1) additional bedroom per household occupancy standard as stated in Section 114-6B(14) above.
(16) 
A form for certification shall be prepared and signed by AHMS. Only households receiving certification shall be referred to affordable housing units.
(17) 
Certified households who reject an opportunity for affordable housing may remain on the referral list at their request and may be interviewed again for certification when their name appears on a listing for a subsequent unit.
(18) 
Certification shall be valid for no more than one hundred twenty (120) days unless a valid sales contract or lease has been executed within that time period. In this event, certifications shall be valid until such time as the sales contract or lease is ruled invalid and no occupancy has occurred. Certifications may be renewed in writing at the request of a certified household for no more than an additional period of one hundred twenty (120) days at the discretion of the AHMS.
(19) 
Households who are denied certification may make a written request for a redetermination. Households shall be required to produce additional documentation to support their claim. Households who are denied certification a second time may request a hearing by forwarding a written request to AHMS thirty (30) days following the household's receipt of denial notification. If a written request has not been received within the thirty (30) day time period, the ineligible determination will be final. The hearing decision shall be final.
A. 
AHMS shall adopt income eligibility ceilings for low and moderate income units for various sized households consistent with those adopted by COAH. No applicant with a household income in excess of these ceilings shall be eligible to purchase or rent the low and moderate income units.
B. 
Upon annual adoption of adopted income standards by COAH, AHMS shall modify its income eligibility ceilings accordingly.
Unless otherwise permitted by court order, the affordable housing units provided through inclusionary development shall be divided equally between low and moderate income households.
A. 
At least half of all low and moderate income sales units within each inclusionary development shall be affordable to low income households.
B. 
With the exception of affordable units constructed pursuant to low income tax credit regulations, at least half of all low and moderate income rental units within each inclusionary development shall be affordable to low income households.
C. 
With the exception of affordable units constructed pursuant to low income tax credit regulations, at least one-third (1/3) of all units in each bedroom distribution (pursuant to Section 114-10 of this chapter) shall be affordable to low income households.
Low and moderate income units created on Block 4.02, Lots 2.02 and 2.03 shall consist of efficiency, one (1) bedroom and two (2) bedroom units. At a minimum, the number of bedrooms shall equal the number of senior citizen low and moderate income units within the inclusionary development. The standard can be met by creating all one (1) bedroom units or by creating a two (2) bedroom unit for each efficiency unit.
A. 
The following criteria, in conjunction with realistic market information, shall be used in determining maximum rents and sale prices:
(1) 
Efficiency units shall be affordable to one (1) person households;
(2) 
One (1) bedroom units shall be affordable to one and one-half (1.5) person households;
(3) 
Two (2) bedroom units shall be affordable to three (3) person households; and
(4) 
Three (3) bedroom units shall be affordable to four and one-half (4.5) person households.
B. 
Median income by household size shall be established by COAH.
C. 
The maximum average price of affordable sales units shall be affordable to households earning fifty-seven and one-half (57.5%) percent of median income. In order to ensure that low and moderate income units are affordable to a range of low and moderate income households, the developer shall establish a range of stratified selling prices for affordable sales units.
D. 
The initial price of a low and moderate income owner-occupied housing unit will be established so that after a down payment of five percent (5%), the monthly principal, interest, insurance, property taxes (property taxes shall be based on the restricted value of low and moderate income units) and condominium or homeowner fees do not exceed twenty-eight percent (28%) of the eligible gross monthly income. The master deeds of inclusionary developments shall specify that low and moderate income homeowners shall pay one-half (1/2) the condominium or homeowner fees paid by purchasers of market housing units. This percentage, once established within the master deed, shall not be amended without prior approval from COAH.
E. 
In determining the sales price of affordable sales units the following considerations shall govern:
(1) 
Sixty (60) or more days prior to the developer's anticipated need of certificates of occupancy for low and moderate income units, the developer shall provide AHMS with information demonstrating the financing that is generally available locally to lower income home buyers and the developer's calculation as to maximum initial sales prices. The interest rate used by the developer in calculating the maximum sales price shall be the rate that AHMS determines to be generally available locally for a ninety-five percent (95%), thirty (30) year, fixed-rate mortgage.
(2) 
The calculation to establish the purchase price of the unit shall take into consideration the going interest rate for a thirty (30) year fixed rate of interest as listed and available in Avon Borough and below-market-interest-rate mortgages such as those provided through the New Jersey Housing and Mortgage Finance Agency. If the actual fixed rate of interest offered by the developer shall be less than the local market rate, then that interest rate shall be used for these calculations.
(3) 
Property taxes shall be determined by applying the equalized property tax rate in the Borough of Avon.
(4) 
The developer shall use the best available assumptions to determine the insurance and homeowners association fees to be applied to the units, subject to the approval of AHMS as to reasonableness for use in this calculation.
F. 
In averaging fifty-seven and one-half percent (57.5%), developers of rental units may establish one (1) rent for a low income unit and one (1) rent for a moderate income unit for each bedroom distribution. Rents on accessory apartment units in existing residences shall be established to be affordable to a household earning fifty-seven and one-half percent (57.5%) of median income, based on the household size applicable to the number of bedrooms in the accessory apartment. Gross rents, including an allowance for utilities, shall be established so as not to exceed thirty percent (30%) of the gross monthly income of the appropriate household size referenced in Section 114-11A of this chapter. The utility allowance shall be derived from the utility allowance approved by HUD for use in New Jersey.
G. 
Low income housing units shall be reserved for households with a gross household income less than or equal to fifty percent (50%) of the median income approved by COAH. Moderate income housing units shall be reserved for households with a gross household income less than eighty percent (80%) of the median income approved by COAH. For example, a household earning forty-eight percent (48%) of median income may be placed in any low income unit; however, a household earning fifty-three percent (53%) may not qualify for a low income unit. A household earning sixty-seven percent (67%) of median may be placed in any moderate income housing unit. A household earning less than fifty percent (50%) of median may be placed in a moderate income housing unit. Low and moderate income units shall not be offered to households that are not income eligible upon initial sale without COAH approval pursuant to N.J.A.C. 5:93-9.16.
H. 
Low and moderate income owner-occupied and rental units shall utilize the same heating source as market units.
Rental charges shall remain in effect for a period of at least one (1) year, except that the landlord may request a modification of these charges by applying to AHMS for recalculation of the rents based on changes in the index for rentals adopted by COAH.
Affordable housing units shall be situated on the development tract in locations no less desirable than market priced dwelling units within the development, and shall be equally accessible to common open space, community facilities and shopping facilities.
Final site plan approval shall be contingent upon the development, whether if developed in one (1) stage or in two (2) or more stages, meeting the following phasing scheduled:
Minimum Percentage of Low Moderate Income Units Completed
Percentage of Market Housing Units Completed
0
25
10
25 + 1 unit
50
50
75
75
100
90
A. 
No certificate of occupancy for a low or moderate income unit shall be issued until the developer shall have submitted and have approved by the AHMS a deed restriction encompassing all the provisions of these regulations.
B. 
No certificate of occupancy shall be issued for the resale of a low or moderate income unit unless AHMS shall certify that the resale complies with the terms of these regulations.
C. 
No low and moderate income unit may be occupied by an initial purchaser or resale purchaser without a certificate of occupancy.
A. 
Program definition. AHMS shall develop and implement an affirmative marketing program for affordable housing units. The affirmative marketing plan is a regional marketing strategy designed to attract buyers and/or renters of all majority and minority groups, regardless of sex, age or number of children, to housing units which are being marketed by the developer of affordable housing. It is a continuous program and covers the period of the deed restriction. The affirmative marketing program will be administered by AHMS.
B. 
Advertising.
(1) 
Advertising for affordable housing units shall begin at least four (4) months prior to expected occupancy. There shall be at least one (1) paid advertisement in a newspaper of general circulation within the housing region during the first week of the marketing program. Such a newspaper may include the Asbury Park Press or Trenton Times. Local newspapers may include the Ocean Grove/Neptune Times and the Wall Herald. The advertisement shall include:
(a) 
The location of the units;
(b) 
Directions to the housing units;
(c) 
A range of prices for the housing units;
(d) 
The size, as measured in bedrooms, of the housing units;
(e) 
The maximum income permitted to qualify for the housing units;
(f) 
The location of applications for the housing units; and
(g) 
The business hours when interested households may obtain an application for a housing unit.
(2) 
AHMS shall supplement newspaper advertisements by:
(a) 
Providing quarterly published materials to the Mercer, Monmouth and Ocean County: Offices on Aging; Boards of Social Service; and Boards of Realtors;
(b) 
Providing quarterly published materials to mailing lists of employers, public housing authorities, community development block programs and non-profit agencies that provide housing services within Mercer, Monmouth and Ocean Counties;
(c) 
Posting advertisements in local businesses in and surrounding Avon Borough; and
(d) 
Mailing information about affordable housing to local religious organizations.
(3) 
The cost of all newspaper and radio advertising shall be the developer's responsibility and shall be established at preliminary approval.
C. 
Applications. Applications for affordable housing shall be available at the municipal building, the municipal library, and the developer's sales office. Applications shall be mailed to prospective applicants upon request.
D. 
Random selection procedures. Applications for low and moderate income units shall be reviewed as follows:
(1) 
Households that apply for low and moderate income housing shall be screened for preliminary income eligibility by comparing their total income to the low and moderate income limits adopted by COAH. Applicants shall be notified as to their eligibility status.
(2) 
Having screened applicants for preliminary income eligibility, AHMS may analyze the income and household sizes of applicants to determine which applicants have the assets and/or income necessary to purchase or rent each available low or moderate income unit.
(3) 
AHMS shall interview each applicant and utilize the procedures outlined to verify the applicant's income and household size, determine the applicant's asset availability and review the applicant's credit history. Applicants shall be required to submit income verification for each household member eighteen (18) years or older. This process shall be utilized in establishing the final certified applicant group.
(4) 
The process described in Subsection D(1) through (3) above shall begin no sooner than one (1) month after the initial advertisement outline in Subsection B(2) above. Households shall proceed through the process described in Subsection D(1) through (3) based on their ability to provide the information required pursuant to Subsection D(1) through (3) and pursuant to the occupancy selection procedures included in this ordinance (Section 114-6). Households shall be certified for affordable units using the procedures outlined in Section 114-6. The process described in Subsection D(1) through (3) shall be continued until all the low and moderate income units are occupied.
E. 
Procedures following initial occupancy. Following the initial sale or rental of affordable units AHMS shall:
(1) 
Maintain a current pool of at least five (5) income eligible applicants for each low and moderate income unit.
(2) 
Contact each income eligible applicant annually to request updated information regarding income and family size.
(3) 
As units become available, AHMS shall select eligible applicants for the units as described in Subsection D(2) through (4) until the units are occupied by low and moderate income households.
F. 
Responsibilities.
(1) 
AHMS has the responsibility to income qualify low and moderate income households in low and moderate income units upon initial occupancy; to provide for the initial occupancy of low and moderate income units with income qualified households; to continue to qualify households for reoccupancy of units as they become vacant during the period of affordability controls; to assist with advertising and outreach to low and moderate income households; and to enforce the terms of the deed restriction and mortgage loan. AHMS shall also provide counseling services to low and moderate income applicants on subjects such as budgeting, credit issues, mortgage qualification, rental lease requirements, and landlord tenant law.
(2) 
The Borough's Clerk or another municipal official designated by the Borough shall attend an affirmative marketing housing program approved by COAH and serve as the liaison to AHMS.
(3) 
All developers shall submit an affirmative marketing plan for marketing low and moderate income units that conforms to this subsection of the chapter. The affirmative marketing plan shall be subject to AHMS and shall be incorporated as a condition of approval of the development application. The developer shall pay a fee of one thousand dollars ($1,000) to the Borough of Avon at the time of the filing of the plan to help defray professional costs in reviewing the plan. The developer shall also be responsible for the following unless such responsibilities are waived by AHMS:
(a) 
Submissions of information as to financing terms readily available to low and moderate income households for use by AHMS in computing maximum sales prices.
(b) 
Submission of an affordable housing plan and an affirmative marketing plan to AHMS for approval and submission of proofs of publication to ensure compliance with said plan.
(c) 
The marketing of all low and moderate income units in accordance with the requirements of this chapter.
(d) 
Submissions of quarterly reports to AHMS detailing the number of low and moderate income households who have signed leases or purchase agreements, as well as the number who have taken occupancy of lower income units, including household size, number of bedrooms in the unit, sales price and monthly carrying costs or, in the case of rental units, the monthly rental charges and utilities included.
(4) 
The developer's responsibilities hereunder shall expire automatically with respect to for sale low and moderate income units upon the date upon which the last low and moderate income unit within the particular development is sold by the developer. With respect to rental low and moderate income units, the developer's responsibilities shall be assumed by the landlord and shall be performed by the landlord so long as such unit is a rental low and moderate income unit and subject to the restrictions of this chapter.
(5) 
The developer of affordable housing units shall be responsible for returning all applicant and sales records for affordable units to AHMS in order to aid in reporting to the court or COAH (whichever has jurisdiction) and to aid in the evaluation of the affirmative marketing program.
G. 
Evaluation of program. AHMS shall evaluate the results of affirmative marketing activities and file a report with the court or COAH (whichever has jurisdiction) on forms provided by COAH. The evaluation shall include:
(1) 
The income and demographic characteristics of each applicant of affordable housing, as well as the occupants of the units.
(2) 
Conclusions regarding the effectiveness of the affirmative marketing program in reaching low and moderate income households throughout the region.
(3) 
Proposed adjustments to the affirmative marketing program.
A. 
Low and moderate income sales units shall not be offered to non-income eligible households at initial sale without approval from the court or COAH (whichever has jurisdiction). Developers that petition for such approval must document efforts to sell housing units to income eligible households and must demonstrate that the housing units have been affirmatively marketed throughout the housing region. Developers that seek such approval to sell low and moderate income sales units to non-income eligible households shall adhere to the procedures in N.J.A.C. 5:91-12 if seeking such approval from COAH.
B. 
In the event that COAH grants relief, low income units may be sold to a moderate income buyer. A moderate income unit may be sold to a household whose income does not exceed ninety-five percent (95%) of median income.
C. 
In no case shall the developer be able to receive more than the maximum permitted sales price. In no case shall a sale pursuant to this subsection eliminate the resale controls on the unit or permit any subsequent seller to convey the unit except in full compliance with the terms of this chapter. For example:
(1) 
The relief granted shall apply only to the specific sale or rental transaction for which its was issued.
(2) 
The relief granted shall only exempt the specific transaction from the restriction of selling or renting such low and moderate income unit to only income qualified purchasers. All other restrictions, requirements and provision of this chapter and the Affordable Housing Plan shall remain in full force and effect, including but not limited to maximum sales prices and rental charges which are established pursuant to this chapter.
(3) 
The restrictions of resale or rental to only qualified purchasers shall apply to subsequent resales or rentals of the particular low and moderate income unit.
(4) 
Nothing shall preclude AHMS from purchasing the specific low and moderate income unit and holding, renting or conveying it to a qualified purchaser, provided that such right is exercised prior to the owner's signing a valid contract to sell the low and moderate income unit.
A. 
Owners of low and moderate income sales units are subject to all restrictions and responsibilities within the deed restriction and mortgage lien regulating a low or moderate income unit. Such restrictions include, but are not limited to:
(1) 
In the event that any first mortgagee or other creditor of an owner of a low and moderate income unit exercises its contractual or legal remedies available in the event of default or nonpayment by the owner of a low and moderate income unit, the owner shall notify AHMS in writing within ten (10) days of such exercise by the first mortgagee or creditor and no later than the ten (10) days after service of any summons and complaint.
(2) 
Any owner of a low and moderate income unit shall notify AHMS within ten (10) days, in writing, of any default in the performance by the owner of any obligation under either the master deed of the condominium association, including the failure to pay any lawful and proper assessment by the condominium association, or any mortgage or other lien against the low and moderate income unit, which default is not cured within sixty (60) days of the date upon which the default first occurs.
(3) 
The owner shall not permit any lien, other than the first purchase money mortgage, AHMS-approved second mortgages and liens approved by AHMS to attach and remain on the property for more than sixty (60) days.
(4) 
The owner of a low and moderate income unit shall keep the unit in good repair and shall not commit waste thereon.
(5) 
The owner shall pay all taxes and public assessments and assessments by the condominium association levied upon or assessed against the unit, or any part thereof, as and when the same become due and before penalties accrue.
(6) 
If a low and moderate income unit is part of a condominium association, the owner, in addition to paying any assessments required to be paid by the master deed of the condominium, shall further fully comply with all of the terms, covenants or conditions of said master deed, as well as fully comply with all terms, conditions and restrictions of this chapter and the Affordable Housing Plan.
(7) 
The owner will pay all charges of any utility authority when the same become due and before penalties accrue.
B. 
Violation of this chapter or Affordable Housing Plan. The interest of any owner may, at the option of AHMS, be subject to forfeiture in the event of substantial breach of any of the terms, restrictions and provisions of this chapter or the Affordable Housing Plan which remains uncured for a period of sixty (60) days after service of a written notice of violation upon the owner by AHMS.
(1) 
The notice of violation shall specify the particular infraction and shall advise the owner that his or her right to continued ownership may be subject to forfeiture if such infraction is not cured within sixty (60) days of receipt of the notice.
(2) 
The provisions of this subsection may be enforced by AHMS by court action seeking a judgment which would result in the termination of the owner's equity or other interest in the unit, in the nature of a mortgage foreclosure. Any judgment shall be enforceable as if the same were a judgment of default of the first purchase money mortgage and shall constitute a lien against the low and moderate income unit.
(3) 
Such judgment shall be enforceable, at the option of AHMS, by means of an execution sale by the Sheriff at which time the low and moderate income unit of the violating owner shall be sold at a sales price which is not less than the amount necessary to fully satisfy and pay off any first purchase money mortgage and prior liens and the costs of the enforcement proceedings incurred by AHMS, including attorney's fees. The violating owner shall have his right to possession terminated as well as his title conveyed pursuant to the Sheriff's sale.
(4) 
The proceeds of the Sheriff's sale shall first be applied to satisfy the first purchase money mortgage lien and any prior liens upon the low and moderate income unit. The excess, if any, shall be applied to reimburse AHMS for any and all costs and expenses incurred in connection with either the court action resulting in the judgment of violation or the Sheriff's sales. In the event that the proceeds from the Sheriff's sale are insufficient to reimburse AHMS in full as aforesaid, the violating owner shall be personally responsible for such deficiency, in addition to any and all costs incurred by AHMS in connection with collecting such deficiency. In the event that a surplus remains after satisfying all of the above, such surplus, if any, shall be placed in escrow by AHMS for the owner and shall be held in such escrow for a maximum period of two (2) years or until such earlier time as the owner shall make a claim with AHMS for such. Failure of the owner to claim such balance within the two (2) year period shall automatically result in a forfeiture of such balance to AHMS. Any interest accrued or earned on such balance while being held in escrow shall belong to and shall be paid to AHMS.
(5) 
Foreclosure by AHMS due to violation of this chapter and the Affordable Housing Plan shall not extinguish the restrictions of this chapter and the Affordable Housing Plan as the same apply to the low and moderate income unit. Title shall be conveyed to the purchaser at the Sheriff's sale, subject to the restrictions and provisions of this chapter and the Affordable Housing Plan. The owner determined to be in violation of the provisions of this plan and from whom title and possession were taken by means of the Sheriff's sale shall not be entitled to any right of redemption.
(6) 
If there are no bidders at the Sheriff's sale, or if insufficient amounts are bid to satisfy the first purchase money mortgage and any prior liens, AHMS may acquire title to the low and moderate income unit by satisfying the first purchase money mortgage and any prior liens and crediting the violating owner with an amount equal to the difference between the first purchase money mortgage and any prior liens and costs of the enforcement proceedings, including legal fees and the maximum resales price for which the low and moderate income unit could have been sold under the terms of this chapter and the Affordable Housing Plan. This excess shall be treated in the same manner as the excess which would have been realized from an actual sale as previously described.
(7) 
Failure of the low and moderate income unit to be either sold at the Sheriff's sale or acquired by AHMS shall obligate the owners to accept an offer to purchase from any qualified purchaser which may be referred to the owner by AHMS, with such offer to purchase being equal to the maximum sales price of the low and moderate income unit as permitted by the terms and provisions of this chapter and the Affordable Housing Plan.
(8) 
The owner shall remain fully obligated, responsible and liable for complying with the terms and restrictions of this chapter and the Affordable Housing Plan until such time as title is conveyed from the owner.
A. 
All resale transactions of affordable housing sales units shall be administered by AHMS. From the date on which AHMS receives a notice of intent to sell by the owner of a low and moderate income unit, AHMS shall have the exclusive right to purchase the unit at the maximum permitted sales price or to refer prospective purchasers to that unit for a period of ninety (90) days unless waived in writing by AHMS. In the event that a contract for the unit is executed within the ninety (90) day period set above and the prospective buyer is unable to close, the period during which AHMS shall have the exclusive right to market the unit is automatically extended for a period of twenty-one (21) days from the date it is notified of the buyer's inability to close.
B. 
In the event no contract has been entered into for the unit at the end of the ninety (90) day period, the owner of the unit may seek approval from AHMS to sell the unit to a non-income eligible household. Upon such a request, AHMS shall require the seller to document all efforts to sell the unit to an income eligible household. AHMS shall require the seller to document the reasons for any delay in selling the housing unit and the hardship to the seller in continuing to offer the affordable unit to an income eligible applicant. The inability to sell the unit at the maximum permitted resale price shall not, in itself be considered an appropriate reason for allowing a housing unit to be sold to a non-income eligible household. If AHMS grants the request, the housing unit may be sold as follows:
(1) 
In the case of a low income unit, to a moderate income buyer; or
(2) 
In the case of moderate income unit to a buyer whose income does not exceed ninety-five percent (95%) of median.
(3) 
Any subsequent sale shall be fully subject to the resale restrictions contained in these regulations. The deed to the above income purchaser shall specifically contain a deed restriction establishing that it is subject to all the affordability controls outlined in this ordinance.
(4) 
In no event shall the seller receive more than the maximum permitted resale price.
The resale price of the affordable housing unit shall be the base price increased pursuant to Subsections A and B herein.
A. 
Percentage increase in household income. The price approved by AHMS at which the seller acquired the property shall be the base price. The base price shall be multiplied by one hundred percent (100%) plus the percentage increase in the HUD uncapped median income by family size for Monmouth County from the time of acquisition of the property to the date that notice of intent to sell is given to AHMS. For example, if the base price is thirty thousand dollars ($30,000), the median income at the time of the initial acquisition is thirty-two thousand dollars ($32,000) and the median income at the time of the resale transaction the median income has increased twenty-five percent (25%) to forty thousand dollars ($40,000), then the resale price is as follows:
$30,000 x 1.25 = $37,500
B. 
Improvements. In addition, the seller shall be entitled to add to the selling price of the unit, the cost of an eligible capital improvement, which pursuant to N.J.A.C. 5:93-9:11 renders the unit suitable for a larger household. (For example, the addition of a bedroom would render a unit suitable for a larger household). Upon the request of an owner of an affordable housing unit, AHMS shall consider within thirty (30) days whether to grant prior approval of an improvement and to approve a specific dollar amount up to the amount actually expended for that improvement.
The following transactions shall be deemed non-sales for the purpose of this ordinance. The owner of the affordable unit shall be entitled to a Statement of Exemption from AHMS upon application.
A. 
Transfer of an affordable housing unit between husband and wife;
B. 
Transfer of ownership of an affordable housing unit between former spouses as a result of a judicial decree, judgment or order of divorce, but not including sales to third parties;
C. 
Transfer of ownership of an affordable housing unit as a result of inheritance;
D. 
Transfer of ownership of an affordable housing unit through an order of the Superior Court. A grant of exemption shall not eliminate the resale control restriction set forth in these regulations. Any subsequent sale shall be subject to all of the terms of these regulations.
No owner of an affordable housing sales unit may lease the unit to a tenant without prior written approval of AHMS. Such approval shall not be granted except when justified by particular and unusual circumstances. An owner seeking such approval shall submit a written request to AHMS setting forth the particular circumstances of the case including the reasons for the request to rent, the proposed duration of the tenancy and certification that the proposed tenant is a qualified low or moderate income household. In the event AHMS approves the request, it shall notify the owner of the unit. The owner shall rent the unit only to a qualified low or moderate income tenant for the period approved by the AHMS at a rent affordable to a low or moderate income tenant, whichever is applicable.
Except as otherwise provided in these regulations, all low and moderate income units subject to the provisions of this Article shall be subject to resale controls for a period of thirty (30) years from the date of acquisition of the unit by the initial purchaser. Accessory apartments shall be subject to controls on affordability for a period of at least ten (10) years from the date of the initial occupancy.
All lower income dwelling units shall be covered by covenants to ensure that in all initial sales and in all subsequent resales, the units will continue to remain available and affordable to the lower income households for which they were intended for the period specified in this subsection in accordance with the requirements and standards established by COAH.
The restrictive covenant governing the deeds of low and moderate income sales units shall include an option permitting purchase of the affordable unit at the maximum allowable restricted sales price at the time of the first non-exempt sale after controls on affordability have been in effect on the unit for the period specified in this chapter. The option to buy shall be available to the Borough of Avon, the New Jersey Housing and Mortgage Finance Agency (HMFA), or a qualified non-profit as determined by the New Jersey Council on Affordable Housing (COAH).
All restrictive covenants governing low and moderate income sales units shall require the owner to notify AHMS by certified mail of any intent to sell the unit ninety (90) days prior to entering into an agreement for the first non-exempt sale after controls have been in effect on the housing units for the period specified in this chapter.
Upon receipt of such notice, the option to buy the unit at the maximum allowable restricted sales price shall be available for ninety (90) days. AHMS shall notify the Borough of Avon, DCA, HMFA and COAH that the unit is for sale. If the Borough of Avon exercises this option, it may enter into a contract of sale. If the Borough of Avon fails to exercise this option within ninety (90) days, the first of the other entities giving notice to the seller of its intent to purchase during the ninety (90) day period shall be entitled to purchase the unit. If the option to purchase the unit at the maximum allowable restricted sales is not exercised by a written intent to purchase, the owner may proceed to sell the housing unit.
If the owner does not sell the unit within one (1) year of the date of the delivery of notice of intent to sell, the option to buy the unit shall be restored and the owner shall be required to submit a new notice of intent to sell ninety (90) days prior to any future proposed date of sale. Any option to buy a housing unit at the maximum allowable restricted sales price shall be exercised by certified mail and shall be deemed exercised upon mailing.
A. 
Borough of Avon Option.
(1) 
If the Borough elects to purchase a low or moderate income unit pursuant to this Article, it may:
(a) 
Convey or rent the housing unit to a low or moderate income purchaser or tenant at a price or rent not to exceed the maximum allowable restricted sales price or rental for a period of up to thirty (30) years.
(b) 
Convey the unit at fair market value subject to the deposit of the price differential in a trust account devoted solely to the creation, rehabilitation or maintenance of low and moderate income housing. Price differential is defined as the difference between the maximum restricted sales price and fair market value as determined at the date of a proposed contract of sale after reasonable real estate broker fees have been paid.
(2) 
In the event the Borough of Avon purchases low income housing units, the Borough shall maintain them as low income housing units. In the event the Borough of Avon purchases moderate income housing units, the Borough may maintain them as either low or moderate income housing units.
(3) 
In the event the Borough of Avon purchases low or moderate income housing units and conveys them at fair market value, the Borough shall:
(a) 
Notify the court or COAH (whichever has jurisdiction) of any proposed sale and resales price ninety (90) days before closing.
(b) 
Notify the court or COAH (whichever has jurisdiction) of the price differential.
(c) 
Deposit the price differential in a trust account devoted solely to the creation, rehabilitation or maintenance of low and moderate income housing; and
(4) 
Money deposited in trust accounts may not be expended until the municipality submits and the court or COAH (whichever has jurisdiction) approves a spending plan.
(5) 
The Borough of Avon shall have the right to determine that the most desirable means of promoting an adequate supply of low and moderate income housing is to prohibit the exercise of the repayment option and maintain controls on lower income housing units sold within the municipality beyond the period required by this chapter. Such determination shall be made by resolution of the municipal governing body. The resolution shall specify the time period for which the repayment option shall not be applicable. During such period, no seller in the municipality may utilize the repayment option.
If the Borough of Avon exercises the option outlined above, it shall:
(a) 
Provide public notice in a newspaper of general circulation; and
(b) 
Notify AHMS of its governing body's action. AHMS shall ensure that the deed restriction on all affected housing units reflects the extended period of controls.
B. 
State Option. When the DCA or HMFA elects to purchase a low or moderate income unit pursuant to this section it may:
(1) 
Convey or rent the housing unit to a low or moderate income purchaser at a price not to exceed the allowable restricted sales price; or
(2) 
Convey the unit at fair market value and utilize the price differential to subsidize the construction, rehabilitation or maintenance of low and moderate income housing within the appropriate housing region.
C. 
Non-Profit Option. Non-profit agencies that have been designated by COAH shall be eligible to purchase low or moderate income units pursuant to this section for the sole purpose of conveying or renting the housing unit to a low or moderate income purchaser at a price not to exceed the allowable restricted sales price. Low income units shall be made available to low income purchasers and the housing unit shall be regulated by the restrictive covenant and lien adopted by COAH. The terms of the controls on affordability shall be the same as those required by this chapter.
D. 
Seller Option. An eligible seller of a low or moderate income unit which has been controlled for the period established in this plan who has provided notice of an intent to sell may proceed with the sale if no eligible entity as outlined in this section exercises its option to purchase within ninety (90) days.
(1) 
The seller may elect to:
(a) 
Sell to a qualified low and moderate income household at the controlled unit sales price, providing the unit is regulated by the restrictive covenant and lien adopted by COAH for a period of up to thirty (30) years; or
(b) 
Exercise the repayment option and sell to any purchaser at market price, providing that ninety-five percent (95%) of the price differential is paid to AHMS, as instrument of the municipality, at closing.
(2) 
If the sale will be to a qualified low and moderate income household, AHMS shall certify the income qualifications of the purchaser and shall ensure the housing unit is regulated by the restrictive covenant and lien required by AHMS.
(3) 
AHMS shall examine any contract of sale containing a repayment option to determine if the proposed sales price bears a reasonable relationship to the housing unit's fair market value. In making this determination, AHMS may rely on comparable sales data or an appraisal. AHMS shall not approve any contract of sale where there is a determination that the sales price does not bear a reasonable relationship to fair market value. AHMS shall make a determination within twenty (20) days of receipt of the contract of sale and shall calculate the repayment option payment.
(4) 
There shall be an appeal procedure by which a seller may submit written documentation requesting AHMS to (i) recompute the repayment obligation if the seller believes an error has been made or to (ii) reconsider a determination that the sales price does not bear a reasonable relationship to fair market value. A repayment obligation determination made as a result of an owner's appeal shall be a final administrative determination of AHMS.
(5) 
The repayment shall occur at the date of closing and transfer of title for the first non-exempt transaction after the expiration of controls on affordability. Repayment proceeds shall be deposited in a trust account devoted solely to the creation, rehabilitation, or maintenance of low and moderate income housing. Money deposited in trust accounts may not be expended until Avon develops and obtains COAH's approval of a spending plan for its use.
E. 
Continued application of options. When a housing unit has been maintained as a low and moderate income unit after controls have been in effect for thirty (30) years, the restrictive covenant governing the housing units shall allow the Borough, the state, nonprofit agencies and sellers of low and moderate income units to again exercise all the same options as provided in this Article.
No second mortgage shall be placed upon the property without the prior written approval of AHMS. In determining whether to grant an approval for the second mortgage, AHMS shall consider the need for the second mortgage and the impact that the second mortgage shall have upon the ability of AHMS to maintain this unit as a low and moderate income unit. Under no circumstances shall a foreclosure of a second mortgage constitute grounds for eliminating the resale controls provided for in this regulation. Prior written approval shall be denied unless second mortgages are specifically authorized by COAH regulations and the application is consistent with those regulations.
Items of personal property which are not permanently affixed to the unit (e.g. refrigerator, freezer, washer, dryer) and which were not included when the affordable housing unit was purchased may be the subject of separate negotiations between the parties subsequent to the signing of the contract for the purchaser of the house. Any agreed price for the purchase of any item or items of personal property shall be reasonable considering the original cost, nature, age and condition of the item. The price to be paid for items of personal property shall not be used as a mechanism to avoid or circumvent the limitations on the resale price of the unit itself. In no event shall the right to purchase the unit be conditioned upon the buyer's willingness to agree to purchase any item or items of personal properties of the seller.
A. 
Provisions for first purchase money mortgagees.
(1) 
The terms and restrictions of this chapter and the Affordable Housing Plan shall be subordinate only to the first purchase money mortgage lien on any low and moderate income unit and in no way shall impair the first purchase money mortgagee's ability to exercise the contract remedies available to it in the event of default as such remedies are set forth in the first purchase money mortgage documents for the unit.
(2) 
So long as the first purchase money mortgage is not sold to the Federal National Mortgage Association or in the secondary mortgage market, the first purchase money mortgagee and/or mortgage servicer shall serve written notice upon AHMS within ten (10) days after the first purchase money mortgage is three (3) months in arrears and within ten (10) calendar days of the filing of the complaint seeking foreclosure of the first purchase money mortgage held on a low and moderate income unit.
(3) 
The obligation of the first purchase money mortgagee and/or servicer to notify AHMS shall cease automatically and immediately upon the sale of the first purchase money mortgage to the Federal National Mortgage Association or in the secondary mortgage market, unless the rules and regulations are amended so as to not prohibit or exclude placing such obligation, in which case an instrument duly evidencing same must be recorded with the office of the Recorder, Monmouth County, New Jersey, and the Clerk of the Borough of Avon before any such obligation shall exist.
(4) 
Provided that the first purchase money mortgagee is obligated to give AHMS the above mentioned notices, the first purchase money mortgage shall also serve written notice of any proposed foreclosure sale upon AHMS at least thirty (30) days prior to the first scheduled date of such sale.
(5) 
The first purchase money mortgagee shall serve notice upon AHMS within thirty (30) days of the sale of the first purchase money mortgage to the Federal National Mortgage Association or in the secondary mortgage market.
(6) 
The Borough of Avon and/or AHMS or any instrumentally designated by the Borough shall have the right to purchase any mortgage which is in default at any time prior to the entry of a foreclosure judgment or within the redemption period thereafter. Notification of a default and of the institution of a foreclosure action and of a Sheriff's sale shall be served in writing upon AHMS as aforesaid. The Borough of Avon shall at all times be considered a party defendant and/or shall have the right to intervene in any foreclosure action seeking foreclosure of a first mortgage and/or shall have the right to redeem and acquire the owner's equity of redemption or to acquire the unit from the owner upon such terms and conditions as may be determined by AHMS.
(7) 
In the event of foreclosure, AHMS shall attempt to identify a qualified low and moderate income purchaser as the case may be and shall give notice to the foreclosing party, and effort shall be made within the confines of the applicable foreclosure laws to sell the housing units to qualified low and moderate income households. If such efforts are unsuccessful, the restrictive covenants shall remain in full force and effect. In any case, the Borough shall not lose credit for the low and moderate income unit relating to which the foreclosure proceeding took place.
B. 
Effect of foreclosure. Any low and moderate income unit which is acquired by a first purchase money mortgagee by deed in lieu of foreclosure or by any purchaser at a mortgage foreclosure sale conducted by the holder of the first purchase money mortgage (including the first purchase money mortgagee but excepting the defaulting mortgagor) shall be permanently released from the restrictions and covenants of this plan, and all resale restrictions shall cease to be effective as to the first purchase money mortgagee and all subsequent purchasers and mortgagees of that particular unit (except for the defaulting mortgagor, who shall be forever subject to the resale restrictions of this plan with respect to the unit owned by him at the time of his default). AHMS shall execute a document in recordable form evidencing that such lower income unit has been forever released from the restrictions of the chapter and the Affordable Housing Plan. Execution or foreclosure sales by any other class of creditor or mortgages shall not result in a release of the unit from the provisions and restrictions of this chapter or the Affordable housing unit.
C. 
Excess funds. In the event of a foreclosure sale by the holder of the first purchase money mortgage, the owner shall be personally obligated to pay AHMS any excess funds as the term "excess funds" is used in the Affordable Housing Agreement, included as part of the Borough's Fair Share Plan.
D. 
Owner's equity.
(1) 
Owner's equity shall be determined to be the difference between the maximum resale price of the unit and the total of the assessments, property taxes and other liens which may have been attached against the unit prior to the foreclosure, provided that such total is less than the maximum resale price.
(2) 
If there are sums to which the owner is properly entitled, such sums shall be turned over to the owner or placed in escrow by AHMS for the owner for a maximum period of two (2) years. Any interest accrued or earned on such balance while being held in escrow shall belong to and shall be paid to AHMS.
(3) 
This provision is subject, however, to applicable laws of the State of New Jersey governing the distribution and payment of proceeds of foreclosure sales.
If any section, paragraph, subdivision, clause or provision of this chapter shall be adjudged invalid, such adjudication shall apply only to the section, paragraph, subdivision, clause or provision so adjudged and the remainder of the chapter shall remain in full force and effect.