In a bold move to address New Jersey’s growing housing affordability crisis, the New Jersey Housing and Mortgage Finance Agency (NJHMFA) has launched the State Tax Credit Subsidy (STCS) Program, a groundbreaking initiative designed to stimulate investment in affordable and workforce housing across the state.
A Market-Driven Solution to Housing Challenges
Approved on October 2, 2025, the STCS Program introduces a competitive auction system that enables New Jersey businesses to purchase state tax credits at a discounted rate. These credits can be applied to the Corporate Business Tax or Insurance Premium Tax over a period of 7 years, offering a compelling incentive for private sector participation.
The first auction is scheduled for October 27, 2025, marking the beginning of a multi-year effort to deploy up to $500 million in tax credits. The program is expected to generate at least $400 million in direct investment toward housing development.
Strategic Fund Allocation
The STCS Program is structured to ensure balanced support for both low-income and middle-income housing needs:
- 50% of the funds will be directed to the Affordable Housing Production Fund, supporting developments for families earning below 80% of the area median income (AMI).
- The remaining 50% will go to the Workforce Housing Fund, targeting households earning between 80% and 120% of AMI, including essential workers and middle-income families.
Eligibility and Participation
Participation in the STCS Program is open to qualified New Jersey businesses. To bid in the auctions, companies must obtain a Tax Clearance Certificate from the NJ Division of Taxation. Housing developers seeking subsidies must meet specific eligibility criteria and demonstrate secured funding from other sources.
Applications for subsidies will be accepted on a rolling basis starting in Fall 2025, providing flexible and responsive support to projects across the state.
No New State Spending Required
One of the most innovative aspects of the STCS Program is its fiscally responsible design. Rather than requiring new state expenditures, the program repurposes unused tax credits from other state initiatives, maximizing existing resources to address urgent housing needs.
A Model for Public-Private Partnership
By leveraging private investment through tax incentives, the STCS Program exemplifies how government and business can collaborate to solve complex social challenges. It offers a scalable model for other states seeking to address housing affordability without expanding public budgets.
Author: Jonathan Bhulai, CPA | [email protected]
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