The New Jersey Housing and Mortgage Finance Agency (NJHMFA) recently approved a first-of-its-kind initiative, the State Tax Credit Subsidy (STCS) Program, designed to unlock private-sector investment for new workforce and affordable housing development across the state.
The program, approved at the NJHMFA board meeting on Oct. 2nd, will incentivize hundreds of millions in private investment through competitive auctions of state tax credits.
“The launch of the State Tax Credit Subsidy Program marks a pivotal step forward in NJHMFA’s commitment to expanding access to safe and affordable housing for low-to-moderate income families,” Executive Director Melanie Walter said. “By creating a competitive and transparent auction for raising funds… NJHMFA is unlocking new opportunities for public-private investment in the communities that need it most.”
Competitive auctions to fund housing gaps
The inaugural STCS Program Auction will open on Oct. 27, 2025, and will accept bids for 30 days.
Over the next five to six years, NJHMFA plans to sell up to $500 million in state tax credits through these competitive auctions, with an annual cap of $100 million. By selling these credits at a minimum value of 80% of their face amount, the innovative wholesale tax credit structure is projected to yield at least $400 million in direct housing production investment.
The funds generated from the auctions will be deposited into the STCS Program Fund to provide gap financing for housing projects. The program will not require new spending by the State, as it is funded by the sale of unused state tax credits previously allocated to other development programs.
Qualifying New Jersey businesses can bid on these tax credits and apply them to their Corporate Business Tax or Insurance Premium Tax at any point over a seven-year period, realizing direct, dollar-for-dollar tax reductions while supporting critical housing investment in the Garden State.
Focus on workforce and middle-income housing
A core component of the STCS Program is its dual focus on both affordable and middle-income housing. The fund is split into two key set-asides:
- Workforce Housing Fund: Half of the money will be reserved for the creation of housing for families earning between 80% and 120% of the area median income—the teachers, nurses, police officers, and construction workers who often struggle with housing costs but do not qualify for traditional assistance.
- Affordable Housing Production Fund: The remaining half will be used to help municipalities meet their statutory affordable housing goals.
All subsidies from the STCS Program must be paired with federal 4% Low-Income Housing Tax Credits, which NJHMFA also administers. The overall investment is anticipated to result in billions of dollars’ worth of total development.
Assembly Speaker Craig Coughlin praised the program’s potential impact. “These tax credits… will spur the development of both affordable and workforce housing by closing critical financing gaps and moving long-awaited projects forward,” he said.
Senate Majority Leader Teresa Ruiz added that the initiatives “demonstrate a long-term commitment to building both affordable and workforce housing, giving families more breathing room in their budgets and the opportunity to continue living in their neighborhoods for generations to come.”
Applications for workforce and affordable housing subsidies will begin to be accepted on a rolling basis this Fall. Businesses interested in the Oct. 27th auction must obtain a Tax Clearance Certificate from the New Jersey Division on Taxation.
