(The Center Square) – New Jersey plans to use $10 million in federal American Rescue Plan (ARP) money for a program proponents say will stop investment firms from buying single-family homes in the state.
The federal dollars will benefit the Foreclosure Prevention Act (FPA) program, an initiative the New Jersey Housing and Mortgage Finance Agency (NJHMFA) will oversee.
State officials say investors purchased many of New Jersey’s single-family residential houses for rental properties in the wake of the 2008 financial crisis. Proponents say this reduced the availability of affordable single-family houses, a situation the COVID-19 pandemic has exacerbated.
“Home ownership is the foundation for building intergenerational wealth and provides people long-term financial, mental and physical stability,” Lt. Governor Sheila Oliver said in a statement. “This legislation and ensuing program administered by NJHMFA will improve New Jersey communities by rehabilitating blighted or abandoned single-family properties while helping residents attain the dream of owning their own home.”
Oliver chairs the NJHMFA board.
The state plans to use the money to buy “non-performing mortgage notes” from the Federal Housing Administration (FHA) before foreclosure. The state will help homeowners living in the house or rehabilitate abandoned properties and return them to the market.
In a statement, Assembly Housing Committee Chair Yvonne Lopez, D-Middlesex, said the FPA “is the blueprint for putting an end to our persistent standing as the state with the highest foreclosure rates in the country.”
Last month, Gov. Phil Murphy signed the “New Jersey Foreclosure Counseling Fund,” a program to counsel New Jerseyans facing foreclosure.