Title
AN ORDINANCE AMENDING TITLE II, ADMINISTRATION, CHAPTER 10, DEPARTMENT OF ECONOMIC AND HOUSING DEVELOPMENT, SECTION 7.2, CLOSING COSTS PROGRAM, OF THE REVISED GENERAL ORDINANCES OF THE CITY OF NEWARK, NEW JERSEY, 2000, AS AMENDED AND SUPPLEMENTED, BY AMENDING SECTION 7.2(A)(7), TO INCREASE THE TERM OF THE LOAN AND ACCORDINGLY DECREASE THE PERCENTAGE OF THE FOREGIVENESS AMOUNT FOR EACH FULL CONSECUTIVE YEAR AFTER CLOSING IN WHICH THE SUBJECT PROPERTY IS THE PRIMARY RESIDENCE OF THE BORROWER UNTIL THE CLOSING COSTS LOAN IS FULLY SATISFIED.
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WHEREAS, pursuant to Ordinance 6PSF-e, adopted on September 20, 2023, the Municipal Council, on behalf of the City of Newark, increased the Closing Costs Program amount from Ten Thousand Dollars and Zero Cents ($10,000.00) to Twenty Thousand Dollars and Zero Cents ($20,000.00) to benefit Newark residents; and
WHEREAS, the City of Newark has determined that there is a need to accordingly adjust the term of the loan and the percentage of forgiveness of the loan amount for each full consecutive year after closing in which the subject property is the primary residence of the borrower; and
WHEREAS, the Municipal Council finds and declares the following amendments to the Revised General Ordinances of the City of Newark, New Jersey, 2000, are deemed necessary.
NOW, THEREFORE, BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
Note: Additions are shown as underlined and bold. Deletions are strikethroughs.
SECTION 1.
§ 2:10-7.2 CLOSING COSTS PROGRAM.
a. Closing Costs Program.
7. Forgiveness or Repayment of the Closing Costs Loan. Closing Costs Loans shall be made in the form of five (5) ten (10) year interest-free, forgivable loans, up to the amount of $20,000. For each full, consecutive year following the closing that the borrower makes the subject property his or her primary residence, 20% 10% of the amount of the total Closing Costs Loan shall be forgiven, up to 100%, until the Closing Costs Loan is fully satisfied. In the event that the borrower(s) sells or transfers the subject property, or the subject property is no longer the borrower's primary residence at any time prior to the satisfaction of the Closing Costs Loan, the borrower(s) shall notify the Loan Administrator(s) accordingly. The borrower(s) shall then be required to repay the pro-rated amount to the City in an accelerated manner upon the borrower's sale of the subject property from the sale proceeds or by prompt payment directly to the City, respectively. Upon full satisfaction of the Closing Costs Loan, the City shall discharge the mortgage upon the subject property in accordance with the terms of the loan documents.
By way of example, if the borrower(s) is disbursed $20,000 but only makes the subject property his or her primary residence for two (2) years following the closing (i.e. equivalent to $4,000 $2,000 per year for a total of $8,000 $4,000), the borrower would be required to repay the City the pro-rated sum of $12,000 $16,000.
By way of further example, if the borrower(s) is disbursed $8,500 $17,000, the amount of $1,700 would be forgiven for each full, consecutive year following the closing that the borrower(s) makes the subject property his or her primary residence; if the borrower(s) only makes the subject property his or her primary residence for two (2) years and six months following the closing, a total of $3,400 $7,000 would be forgiven (i.e. 20% for each full, consecutive year of primary residency, with no forgiveness being calculated for the six months or 1/2 year period). Borrower(s) would be required to repay the City the pro-rated sum of $5,100 $10,200.
SECTION 2. All City ordinances or parts thereof inconsistent herewith are hereby repealed to the extent of their inconsistency only.
SECTION 3. If any part of this Ordinance shall be declared to be invalid or inoperative, such part shall be deemed severable and the invalidity thereof shall not affect remaining parts of this Ordinance.
SECTION 4. This Ordinance shall take effect upon final passage and publication in accordance with the laws of the State of New Jersey.
SECTION 5. Codification. This Ordinance shall be a part of the Code of the City of Newark as though codified and fully set forth therein. The City Clerk shall have this Ordinance codified and incorporated in the official copies of the Code. The City Clerk and the Corporation Counsel are authorized and directed to change any Chapter, Article and/or Section number of the Code of the City of Newark in the event that the codification of this Ordinance reveals that there is a conflict between the numbers and the existing Code, and in order to avoid confusion and possible accidental repealers of existing provisions not intended to be repealed.
STATEMENT
This Ordinance Amends Title II, Administration, Chapter 10, Department of Economic and Hosing Development, Section 7, Live Newark Loan Forgiveness Program for Advancing Closing Costs or Providing Funding for Eligible Façade Improvements, by amending Section 7.2, Closing Costs Program.