N.J. Admin. Code § 5:80-3.4

Current through Register Vol. 56, No. 21, November 4, 2024

Section 5:80-3.4 - Conditions required for distribution

(a) The following conditions must be met before a return on investment will be authorized by the Agency:

1. A final mortgage closing must be held, unless a waiver is granted in accordance with (b) below;

2. The project must be current in all financial obligations, including debt service, repair and replacement reserve and tax and insurance escrows. For purposes of this paragraph, project reserve accounts shall be considered current if they are funded to an acceptable level, as determined by the Agency, in accordance with the Agency's funding schedule;

3. Compliance with all repairs required by the Agency based upon the Agency's most recent physical inspection report;

4. All required reports and statements must be submitted by the housing sponsor;

5. Surplus cash must be available at the time of the request; and

6. The housing sponsor must use forms as required by the Agency when requesting a return on investment.

(b) The requirement of a final mortgage closing prior to receiving a return on investment may be waived by the Executive Director if it is determined that the closing is being delayed due to circumstances beyond the control of the housing sponsor (for example, construction litigation). In addition to the need for such a determination, in order to have such requirement waived, the housing sponsor must complete the following to the satisfaction of the Executive Director:

1. Submission of Development Cost Certification.

2. Submission of Bank Statements on the Construction Loan Account.

3. Execution of a Memorandum of Understanding setting forth agreement as to the final mortgage amount including any funds necessary for final construction payment and any additional development costs that are approved by the Agency; and agreement, if applicable, regarding a reduction in the original mortgage loan amount.

(c) In addition to the conditions listed in (a) above, the following conditions shall be met by assisted living residences (ALRs) before return on investment shall be approved by the Agency and disbursed to the housing sponsor:

1. The ALR shall have a sustaining occupancy for two full consecutive years; and

2. The ALR shall have an operating reserve fund with 75 days' worth of operating expenses, including expenses of tenants' meals and basic services.

N.J. Admin. Code § 5:80-3.4

Amended by 49 N.J.R. 3423(c), effective 10/16/2017