This section is designed to provide assurances that low and moderate income units are created with controls on affordability over time and that low and moderate income people occupy these units. To this end, the Township designates the Township of Mahwah Housing Commission (hereinafter "the Commission") with the responsibility of ensuring the affordability of sales and rental units over time. The Commission shall also be responsible for affirmative marketing; income qualification of low and moderate income households; placing income eligible households in low and moderate income units upon initial occupancy; placing income eligible households in low and moderate income units as they become available during the period of affordability controls; adopting procedural guidelines consistent with this section and with C.O.A.H. Regulations; and enforcing the terms of the deed restriction and mortgage loan. The Commission may retain a consultant to assist the Commission in certifying eligibility and reviewing sales and rental documentation. (Ord. #1294, §IX)

In placing households in low and moderate income units, the Commission shall utilize the following verification and certification procedures:

a. 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 the Agency. 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.

b. Verification may include, but is not limited to, the following:

1. 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 the employer stating present annual income figure as projected annually.

2. A copy of regular IRS Form 1040 (Tax computation form), 1040A, or 1040EZ as applicable and State income tax returns filed for each of the three (3) years prior to the date of the interview;

3. A letter of appropriate reporting form verifying benefits such as Social Security, Unemployment, Welfare, Disability or Pension income (monthly or annually);

4. A letter of appropriate reporting form verifying any other sources of income claimed by the applicant such as alimony and child support;

5. Reports that verify income from assets to be submitted by banks or other financial institutions managing trust funds, money market accounts, certificates of deposit, stocks or bonds;

6. Evidence or reports of income from assets such as real estate or businesses that are directly held by any household member;

7. 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

8. A notarized statement of explanation in such form as to be satisfactory to the reviewer.

c. 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.

d. 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, certificates of deposit, money market, mutual funds, stocks and bonds and imputed income from non-income producing assets such as equity in real estate.

e. Assets not earning a verifiable income shall have an imputed interest income using a current average interest rate on twelve (12) month certificates of deposit. Assets not earning income includes present real estate equity, boats, campers, motor homes and similar items. 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.

f. Income from assets that have delayed earnings, such as IRA's or annuity programs shall not be included in current income until such payments are being received. However, these assets must be reported and verified.

g. 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.

h. 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 casual, sporadic or irregular gifts and bonuses.

1. 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.

j Households whose total Gross Annual Income is measured at fifty (50%) percent or below fifty (50%) percent of the authorized median income guideline shall be certified as low income households and referred to units designated for low income households.

k. Households whose total gross annual income is measured above fifty (50%) percent but below eighty (80%) percent of the authorized median income shall be certified as moderate income households and referred to units designated for moderate income households.

l. 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 (28%) percent of gross monthly income as a standard for home ownership and thirty (30%) percent of gross monthly income as a standard for rental units.

m. At the discretion of the Agency, households may also be required to produce documentation of household composition for determining the correct unit size and the applicable median income guide.

n. Generally, households will be referred to available units using the following standards for occupancy:

1. A maximum of two (2) persons per bedroom;

2. Children of same sex in same bedroom;

3. Unrelated adults or persons of the opposite sex other than husband and wife in separate bedrooms; persons cohabitating as common law husband and wife shall be considered as a husband and wife for certification purposes; and

4. Children not in the same bedroom with parents.

0. A form for certification shall be prepared and signed by the Commission. Only households receiving certification shall be referred to affordable housing units.

p. A certified household may reject two (2) prospective rental units for any reason without affecting their status on the priority list, following the third rejection of a rental unit the applicant will be dropped to the end of the eligibility list.

A certified household may reject two (2) prospective "For Sale" units for any reason without affecting their status on the priority list, following the third rejection of a "For Sale" unit the applicant will be dropped to the end of the eligibility list.

q. Certification for a household shall be valid for no more than one hundred eighty (180) 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 held 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 eighty (180) days at the discretion of the Commission.

r. 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 the Commission within thirty (30) days following the household's receipt of a 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.

s. All individuals or households seeking to purchase an affordable unit must certify that it is their intention to occupy the affordable unit as their primary place of residence for at least a period of one (1) year.

An owner may request that the Housing Commission waive the one (1) year requirement if unforeseen and/or extenuating circumstances arise after occupancy within the one (1) year period. (Ord. #1294, §IX)

a. Newly constructed low and moderate income sales units shall remain affordable to low and moderate income households for an appropriate period of not less than thirty (30) years. The Commission shall require all conveyances of newly constructed low and moderate income sales units subject to the Act shall contain the deed restriction and mortgage lien adopted by the New Jersey Council on Affordable Housing (here in after "COAH").

b. Low and moderate income sales units approved by the Planning Board prior to January 1, 1997 under 1987 Township of Mahwah Plan shall remain affordable to low and moderate income households for a period of not less than twenty-five (25) years. All such conveyances shall contain deed restrictions and mortgage liens required by the Township of Mahwah Housing Commission and COAH.

c. Rehabilitated owner-occupied single family housing units that are improved to code standard shall be subject to affordability controls for at least six (6) years.

d. Rehabilitated renter-occupied housing units that are improved to code standard shall be subject to affordability controls for at least ten (10) years.

e. Newly constructed low and moderate income rental units shall remain affordable to low and moderate income households for a period of thirty (30) years.

f. Housing units created through conversion of a nonresidential structure shall be considered a new housing unit and shall be subject to controls on affordability as delineated in paragraphs a. and e. above. (Ord. #1294, §IX)

a. A certificate of occupancy for initial occupancy of a low or moderate income sales unit shall not be issued unless there is a written determination by the Commission or its designee that the unit is to be controlled by a deed restriction and mortgage lien as adopted by COAH. The Commission shall make such determination within ten (10) days of receipt of a proposed deed restriction and mortgage lien. Amendments to the deed restriction and lien shall be permitted only if they have been approved by COAH. A request for an amendment to the deed restriction and lien may be made by the Commission, the Township or the developer.

b. Initial occupancy of a low or moderate income sales unit shall not be permitted prior to issuance of a certificate of occupancy in accordance with paragraph a. above.

c. A certificate of reoccupancy shall be required for any occupancy of a low or moderate income sales unit resulting from a resale. No certificate of resale shall issue unless there is a written determination by the Commission or its designee that the unit is to be controlled by the deed restriction and mortgage lien prior to issuance of a certificate of occupancy, regardless of whether the sellers had executed the deed restrictions and mortgage lien adopted by COAH upon acquisition of the property. The Commission or its designee shall make such determination within ten (10) days of receipt of a proposed deed restriction and mortgage lien.

d. The certificate of reoccupancy shall not be required in sales for which controls are allowed to expire or in which the repayment option is being exercised pursuant to N.J.A.C. 5:93-9.4.

e. The mortgage lien and the deed restriction shall be filed with the records office of Bergen County. The lien and deed restriction shall be in the form adopted by COAH, unless amendments have been approved by COAH, for a specific Municipality.

f. The deed restriction, including the repayment clause, and the mortgage lien shall have priority over all mortgages on the property except for a first mortgage placed on the property by the mortgagee prior to the expiration of resale controls. (Ord.#1294, §IX)

a. The deed restriction governing the deeds of low and moderate income units shall include an option permitting purchase of the affordable housing 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 N.J.A.C. 5:93-9.2 or Section 24-14c. The option to buy shall be available to the municipality, the Department of Community Affairs, the Commission or a qualified nonprofit as defined by COAH.

b. All deed restrictions governing low and moderate income units shall require the owner to notify the Commission and COAH 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 unit for the period specified in N.J.A.C. 5:93-9.2 or this section.

c. Upon receipt of such notice, the option to buy the unit at the maximum allowable restricted sales price or any mutually agreeable sales price that does not exceed the maximum allowable restricted sales price shall be available for ninety (90) days. The Commission shall notify the Department of Community Affairs and COAH that the unit is for sale. If the Township exercises this option, it may enter into a contract of sale. If the Township fails to exercise this option within ninety (90) days, the first of the other entities giving notice to the seller of its initial 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 price is not exercised by a written offer to purchase the housing unit within ninety (90) days of receipt of the intent to sell, the owner may proceed to sell the housing unit (pursuant to N.J.A.C. 5:93-9.8). 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.

d. 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.

e. The option to buy requirements contained in subsection 24-14.5a. to d. shall also apply to deed restricted low and moderate income units sold and/or rented prior to the date of this section. (Ord.#1294, §IX)

If the Township elects to purchase a low or moderate income unit pursuant to N.J.A.C. 5:93-9.4, 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 rent provided the unit is controlled by a deed restriction in accordance with COAH regulations or an alternative approved by COAH; or

b. If the Township purchases low income housing units, it shall maintain them as low income housing units and the unit shall remain subject to this Plan and the jurisdiction of the Housing Commission.

c. Convey the unit at fair market value subject to the following provisions:

1. Notify COAH of any proposed sale and sales price ninety (90) days before closing;

2. Notify COAH of the price differential as defined in N.J.A.C. 5:93-1.3; and

3. Deposit the price differential in an interest bearing housing trust fund devoted solely to the creation, rehabilitation or maintenance of low and moderate income housing.

d. Money deposited in housing trust funds may not be expended until the Township submits and COAH approves a spending plan in accordance with the applicable COAH Rules at that time. Money deposited in housing trust funds shall be subject to the applicable COAH Rules at that time. (Ord. #1294, §IX)

When the Department of Community Affairs or Agency elects to purchase a low or moderate income unit pursuant to N.J.A.C. 5:93-9.4, 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 allowable restricted sales price or rental; or

b. 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. (Ord. #1294, §IX)

a. Nonprofit agencies may apply to COAH at any time for the right to purchase low or moderate income units subsequent to the period of controls on affordability provided the unit remains controlled by a deed restriction in accordance with COAH rules and regulations, or an alternative approved by COAH.

b. Nonprofit agencies that have been designated by COAH shall be eligible to purchase low or moderate income units pursuant to N.J.A.C. 5:93-9.4 for the sole purpose of conveying or renting the housing unit to a low or moderate income purchaser or tenant at a price or rent not to exceed the allowable restricted sales price or rental. Low income units shall be made available to low income purchasers or tenants and the housing unit shall be regulated by the deed restriction and lien adopted by COAH, in accordance with COAH Rules and Regulations. The term of the controls on affordability shall be the same as those required by N.J.A.C. 5:93-9.2. (Ord.#1294, §IX)

a. An eligible seller of a low or moderate income unit which has been controlled for the period established in N.J.A.C. 5:93-9.2 or this section who has provided notice of an intent to sell may proceed with the sale if no eligible entity as outlined in N.J.A.C. 5:93-9.4(c) and 9.7 exercises its option to purchase within ninety (90) days.

b. Subject to N.J.A.C. 5:93-9.9, the seller may elect to:

1. Sell to a qualified low and moderate income household at a price not to exceed the maximum permitted sales price in accordance with existing COAH rules, providing the unit is regulated by the deed restriction and lien adopted by COAH in accordance with COAH rules and regulations, for a period of at least thirty (30) years; or

2. Exercise the repayment option and sell to any purchaser at market price, providing that ninety-five (95%) percent of the price differential is paid to the Housing Commission, as an instrument of the Township, at closing.

c. If the sale is to a qualified low and moderate income household, the Commission shall certify the income qualifications of the purchaser and shall ensure the housing unit is regulated by the deed restriction and lien required by COAH in accordance with COAH rules and regulations.

d. The Commission 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, the Commission shall not approve any contract of sale where there is a determination that the sales price does not bear a reasonable relationship to a fair market value. The Commission shall make a determination within twenty (20) days of receipt of the contract of sale and shall calculate the repayment option payment.

e. The seller may appeal the Commission's determination by submitting written documentation requesting the Commission to recompute the repayment obligation if the seller believes an error has been made, or to reconsider a determination that a sales price does not bear a reasonable relationship to fair market value.

f. 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.

g. Repayment proceeds shall be deposited in a housing trust fund (see N.J.A.C. 5:93-8.14) and may be used as per N.J.A.C. 5:93-8.15. Money deposited in housing trust funds may not be expended until the Municipality submits and COAH approves a spending plan (See N.J.A.C. 5:93-5.1(c)). (Ord.#1294, §IX)

a. The Township reserves the right to determine the most desirable means of promoting an adequate supply of low and moderate income housing and 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 N.J.A.C. 5:93-9.2. Such determination shall be made by resolution of the Township Council and shall be effective upon filing with COAH and the Agency. The resolution shall specify the time period for which the repayment option shall not be applicable. During such period, no seller in Mahwah may utilize the repayment option permitted by N.J.A.C. 5:93-9.8.

b. If Mahwah exercises the option outlined in paragraph a. above, it shall:

1. Provide public notice in a newspaper of general circulation; and

2. Notify the Commission and COAH of its action.

c. The Commission shall ensure that the deed restriction on all affected housing units reflects the extended periods of controls. (Ord. #1294, § IX)

When a housing unit has been maintained as a low or moderate income unit after controls have been in effect for the period specified in N.J.A.C. 5:93-9.2, the deed restriction governing the housing units shall allow the Township, the State, nonprofit agencies and sellers of low and moderate income units to again exercise all the same options as provided in this section. (Ord. #1294, §IX)

a. Property owners of single family, owner-occupied housing may apply to the Commission for permission to increase the maximum price for eligible capital improvements. Eligible capital improvements shall be those that render the unit suitable for a larger household. Property owners shall apply to the Commission if an increase in the maximum sales price is sought.

b. At resale, all items of property which are permanently affixed to the units and/or were included when the unit was initially restricted (for example, refrigerator, range, washer, dryer, dishwasher, wall to wall carpeting) shall be included in the maximum allowable resale price. The purchase of central air conditioning installed subsequent to the initial sale of the unit and not included in the base price may be made a condition of the unit resale provided the price has been approved by the Commission. Unless otherwise permitted by COAH, the purchase of any property other than central air conditioning shall not be made a condition of the unit resale. The owner and the purchaser must personally certify at the time of closing that no unapproved transfer of funds for the purpose of selling and receiving property has taken place at resale. (Ord. #1294, §IX)

If the use of median income data adopted by COAH to index the cost of housing renders a unit unaffordable to a low or moderate income household at the time of resale, the Township shall not lose credit for the housing unit, provided that adequate controls on affordability remain in place, but the Township may subsidize the housing unit to maintain affordability. (Ord. #1294, §IX)

A judgment of foreclosure or a deed in lieu of foreclosure to a financial institution regulated by State and/or Federal law or to a lender on the secondary mortgage market (including, but not limited to, the Federal National Mortgage Association, the Home Loan Mortgage Corporation, the Government National Mortgage Association or an entity acting on their behalf) shall extinguish controls on affordable housing units provided there is compliance with N.J.A.C. 5:93-9.14. Notice of foreclosure shall allow the Commission, the Township of Mahwah, the Department of Community Affairs, or a nonprofit entity to purchase the affordable housing unit at the maximum permitted sales price and maintain it as an affordable unit for the balance of the intended period of controls. Failure to purchase the affordable housing unit shall result in COAH adding that unit to the municipal present and prospective fair share obligation. Failure of the financial institution to provide notice of a foreclosure action to the Commission shall not impair any of the financial institution's rights to recoup loan proceeds; shall not negate the extinguishment of controls or the validity of the foreclosure; and shall create no cause of action against the financial institution. (Ord. #1294, §IX)