N.J. Admin. Code § 7:1A-7.2

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

Section 7:1A-7.2 - Amount and terms of loan

(a) Funds made available for Type B and Type C Loans under this subchapter shall be subject to the following conditions:

1. Such loans shall bear interest at a rate fixed by the Department of the Treasury, and shall not exceed the rate of two percent per annum. Under hardship circumstances, subject to approval by the Department of Treasury, loans may be given at interest rates below two percent, based on the percentage of the municipality's median family income level required to plan, design, construct and operate the project.

2. The loan maturity period for all Type B and C Loans issued from the Water Supply Replacement Trust Fund shall be for a period of not more than 20 years from the date disbursement of loan funds to the borrower begins. Principal and accrued interest may be prepaid by the borrower prior to the end of the loan maturity period without penalty.

3. Unless otherwise specified by the Department of the Treasury, the amortization date for all Type B and C Loans issued from the Water Supply Replacement Trust Fund shall be 90 days after the final disbursement of loan funds to the borrower. Accrued interest on all disbursements made prior to the amortization date may be capitalized as part of the principal amount of the loan. The borrower shall make equal semi-annual debt service payments to the State commencing six months after the amortization date. Debt service schedules providing for pre-payment of accrued interest and/or declining debt service payments may be approved at the discretion of the Department. However, subject to approval by the Department of the Treasury, annual or semi-annual debt service payments by any utility authority, as borrower, shall become due as specified in the Loan Repayment Schedule and any amendments thereto.

4. For all borrowers, sufficient funds shall be deposited in a specific fund for the purpose of assuring timely repayment of the loan by the borrower.

N.J. Admin. Code § 7:1A-7.2

Amended by R.1992 d.252, effective 6/15/1992.
See: 24 New Jersey Register 707(a), 24 New Jersey Register 2245(a).
Stylistic changes only.