a. Admission to housing projects constructed or rehabilitated under this act shall be limited to families of low and moderate income whose gross aggregate family income at the time of admission does not exceed six times the annual rental or carrying charges, including the value or cost of heat, light, water, sewerage, parking facilities and cooking fuel, of the dwellings that may be furnished to such families, or seven times said charges if there are three or more dependents. There may be included in the carrying charges to any family for residence in any mutual housing project constructed or rehabilitated with a loan from the authority an amount equal to 6% of the original cash investment of the family in said mutual housing project and, to the extent authorized by the authority where not included in said carrying charges, the value or cost of repainting the apartment and replacing any fixtures or appliances. Notwithstanding the provisions of this section, no family or individual shall be eligible for admission to any housing project constructed or rehabilitated with a loan from the authority whose gross aggregate family income exceeds $32,100.00 as adjusted from time to time by the authority, by rules or regulations promulgated hereunder, so as to reflect changes in any wage or salary indices for this State as determined and prepared by any department, division, office or agency of this State; provided however, that with respect to any project financed by an authority mortgage insured or guaranteed by the United States of America or any agency or instrumentality thereof, the authority may adopt the admission standards for such projects then currently utilized or required by the guarantor or insurer.

b. The authority shall by rules and regulations provide for the periodic examination of the income of any person or family residing in any housing project constructed or rehabilitated with a loan from the authority. In the event that the gross aggregate family income of a family residing in any such housing project increases, and the ratio of such family income to the current rental or carrying charges of the dwelling unit becomes greater than the ratio prescribed for admission in subsection a. of this section but does not exceed by more than 25% the maximum family income permitted for admission to the project specified in such subsection, the owner or managing agent of such housing project shall permit the family to continue to occupy the unit. The authority or, with the approval of the authority, the qualified housing sponsor of any housing project constructed or rehabilitated with a loan from the authority, may terminate the tenancy or interest of any family residing in such housing project whose gross aggregate family income continues to exceed by more than 25% the maximum family income so permitted for a period of 6 months or more; provided, that no tenancy or interest of any such family in any such housing project shall be terminated except upon reasonable notice and opportunity to obtain suitable alternate housing, in accordance with rules and regulations of the authority; provided further, that any such family, with the approval of the authority, may be permitted to continue to occupy the unit, subject to payment of a rent or carrying charge surcharge to the qualified housing sponsor in accordance with a schedule of surcharges fixed by the authority. Said qualified housing sponsor shall pay such surcharge to the municipality granting tax exemption, but only up to an amount that, together with payments made to the municipality in lieu of taxes and for any land taxes, equals 25% of the total rents or carrying charges of the housing project for the current and any prior years that the project has been in operation. Any remainder of the surcharge, or the total surcharge if tax exemption has not been granted, shall be paid to the authority.

c. Any family residing in a mutual housing project required to remove from the project because of excessive income as herein provided shall be discharged from liability on any note, bond or other evidence of indebtedness relating thereto and shall be reimbursed, in accordance with the rules of the agency, for all sums paid by such family to the qualified housing sponsor on account of the purchase of stock or debentures as a condition of occupancy or on account of the acquisition of title for such purpose.

L.1979, c. 275, s. 8, eff. Jan. 3, 1980.