NJHMFA sells $40M in tax credits to boost affordable housing development

The New Jersey Housing and Mortgage Finance Agency (NJHMFA) has sold $40 million in state tax credits to several corporations to help finance affordable and workforce housing developments, launching what the agency says is the first program of its kind at this scale by any state.

The initiative is designed to increase the supply of housing by attracting private investment to affordable and workforce housing projects across New Jersey.

“Every New Jerseyan deserves the opportunity to live in a safe, affordable home in the community they love,” said Gov. Mikie Sherrill. “These tax credits help turn private investment into housing that will help families, seniors and essential workers put down roots across our state. This is exactly the type of innovative financing we need to tackle New Jersey’s housing shortage and build stronger communities for generations to come.”

Following the success of the inaugural spring 2026 auction, NJHMFA announced it will offer approximately $60 million in additional state tax credits during a second auction running from Oct. 16 through Nov. 30.

Proceeds from the auction will continue to support affordable and workforce housing development.

New Jersey Assembly Speaker Craig Coughlin said the program is already helping developers close financing gaps and move projects forward more quickly.

“Wonderful to see my law, A3128, is already working as intended to increase New Jersey’s supply of affordable and middle-income workforce housing,” he said.

The initiative demonstrates how public-private partnerships can address housing affordability, said New Jersey Senate Majority Leader Teresa Ruiz

Under the program, eligible businesses bid on state tax credits with a minimum bid of 80 cents on the dollar. The average winning bid during the spring auction was 87 cents on the dollar.

Awarded credits can be applied to the Corporate Business Tax or Insurance Premium Tax, with unused credits eligible to be carried forward for up to seven years.

Half of the auction proceeds will help municipalities meet affordable housing obligations, while the remaining half will fund workforce housing for middle-income families. All projects will also utilize federal 4% Low-Income Housing Tax Credits administered by NJHMFA.

According to the agency, the program will support affordable housing for households earning less than 60% of area median income and workforce housing for households earning between 80% and 120% of area median income.

NJHMFA plans to continue holding state tax credit auctions through 2030.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.