[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:
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.
The Department of Community Affairs' Affordable Housing Management
Service.
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.
The Council on Affordable Housing.
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.
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.
The most senior mortgage lien to secure repayment of funds
for the purchase of low and moderate income units.
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."
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.
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.
One (1) or more persons living as a single nonprofit housekeeping
unit, whether or not they are related by blood, marriage or otherwise.
The interest bearing account in which all development fees
will be deposited pursuant to N.J.A.C. 5:93-8.15.
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.
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.
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.
A judgment entered by the Superior Court approving a municipality's
plan to satisfy its fair share obligation.
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.
A low income household purchasing either a low income unit
or a moderate income unit, as the case may be.
A unit which is affordable to a low income household.
Any residential unit within a development which is not designated
as a low and moderate income unit.
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.
A moderate income household purchasing a moderate income
unit.
A unit which is affordable to a moderate income household.
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.).
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.
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.
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.
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:
(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.
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:
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:
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.
