The Real Estate Gap Financing Grant Program is a pilot initiative established with $10 million in federal ARP SLFRF funding to support real estate development projects in distressed municipalities across New Jersey. The program provides financial assistance to fill funding gaps for projects that have been negatively impacted by the COVID-19 pandemic. Eligible projects must align with the program’s goal of revitalizing communities by supporting key development activities, such as new construction or substantial rehabilitation.

To qualify for a grant, developers must agree to a 5-year deed restriction, ensuring that the project's use remains unchanged for at least five years. The definition of “substantial rehabilitation” is based on New Jersey’s legal framework, where the extent of work is so significant that the space cannot be occupied during construction, and a new certificate of occupancy is required afterward. Projects that involve only minor work like painting or equipment replacement are not considered eligible under this definition. Moreover, projects cannot commence any construction, demolition, or remediation before receiving approval from the New Jersey Economic Development Authority (NJEDA), and they must comply with prevailing wage laws and contractor registration requirements.

Eligible projects include commercial real estate, mixed-use developments (which must reserve 20% of residential units for low- to moderate-income households), non-profit or community-use projects, cultural and arts facilities, and industrial or manufacturing sites. However, certain types of projects are ineligible for funding, including those focused solely on warehouse or retail space, governmental or educational use, and projects that have already started construction prior to NJEDA approval.

Applicants must be either for-profit or non-profit entities. Government entities and educational institutions, including state colleges or universities, are not eligible to apply. Each applicant may only submit one application, and no single applicant can receive more than one grant award. The program is limited to specific municipalities, including cities like Bayonne, Elizabeth, Jersey City, and Vineland, among others.

Grant awards range from a minimum of $500,000 to a maximum of $5,000,000 per project, and the grant cannot exceed 50% of the total development costs. Acquisition costs and operational expenses are not eligible, but approved costs can include construction, soft costs (up to 20% of total project costs), and developer fees (capped at 10%). Additionally, all projects must comply with federal Duplication of Benefits regulations, and the NJEDA will perform a cost reasonableness analysis before approving funding.

The program’s funds must be fully expended by December 31, 2026, and project readiness is a key factor in funding decisions, as the projects need to meet tight deadlines for completion. For more information or specific inquiries, applicants can reach out to NJEDA at realestateinfo@njeda.gov.