Requires HMFA to establish "Sustainable Tiny Home Pilot Program" in three regions of State; appropriates $5 million.

S 635 establishes a three-year "Sustainable Tiny Home Pilot Program" through New Jersey's Housing and Mortgage Finance Agency (HMFA), appropriating $5 million to fund construction of tiny homes (under 300 sq ft) in three regions of the state. The program awards annual grants totaling $1.65 million to builders who construct tiny home developments meeting green building standards, with requirements to report recycled construction waste and energy-efficient features. It directly affects builders, selected municipalities (chosen based on zoning flexibility and community interest), and future residents seeking affordable, low-emission housing. The bill aims to reduce carbon emissions (tiny homes emit ~2,000 lbs CO2 annually vs. 28,000 lbs for standard homes) and construction waste, aligning with climate goals.