New Jersey Administrative Code › Title 5 - COMMUNITY AFFAIRS › Chapter 80 - NEW JERSEY HOUSING AND MORTGAGE FINANCE AGENCY › Subchapter 6 - USE OF FUNDS FROM SALE OF PROJECTS OWNED BY NONPROFIT CORPORATIONS TO LIMITED PARTNERSHIPS › Section 5:80-6.1 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
The following words and terms, when used in this subchapter, shall
				  have the following meanings, unless the context clearly indicates otherwise.
"Community Development Escrow" or "CDE" means that fund
				  established pursuant to a conversion, intended primarily for use in assisting
				  community improvements, activities, or services related to a project.
"Conversion" means the overall transaction by which ownership of a
				  project was transferred from a nonprofit entity to a profit-motivated
				  partnership.
"Development Cost Escrow" or "DCE" means that fund established
				  pursuant to a conversion, intended primarily for use in improving or supporting a
				  project itself.
"Nonprofit" means the nonprofit owner of a project that conveyed
				  its interest in the project and assigned its Agency mortgage on the premises to a
				  profit-motivated partnership.
"Operating deficits" means all obligations, to the extent such
				  obligations have not been or will not be paid in full out of operating income,
				  arising out of the management and operation of the project, including without
				  limitation:
1. Reserves, escrows or fees required by the Agency or by
				  law;
2. Taxes or payments in lieu of taxes;
3. Utility bills;
4. Legal, accounting and other professional fees incurred by the
				  partnership which have received prior approval by the Agency;
5. Insurance premiums; and
6. Judgments or settlements approved by the Agency.
"Partnership" means a profit-motivated limited partnership that
				  has qualified as a limited dividend housing association pursuant to the New Jersey
				  Limited-Dividend and Nonprofit Housing Corporations and Associations Law, N.J.S.A.
				  55:16-1et seq. (Limited Dividend Law), repealed by P.L. 1991, c. 431, § 20, and
				  that has taken title to a project from a nonprofit entity.
"Project Subsidy Reserve Fund" or "PSR" means that fund
				  established pursuant to a conversion, intended primarily for maintaining the
				  operative viability of Section 236 projects.
"Purchase price" means the total amount of capital pledged to the
				  nonprofit sponsor including cash proceeds and secondary financing.
"Stated equity" means an amount equal to 10 percent of the revised
				  total development cost determined by the Agency pursuant to
				  5:80-6.3.
"Surplus cash" means funds, including funds in the DCE and CDE
				  accounts, available after payment of equity distributions, project expenses and
				  operating deficits, including the full funding of all required reserve accounts and
				  proposed capital improvements, plus:
1. Two to six months of the annual budgeted project expense for
				  senior citizen projects; or
2. Four to 12 months of the annual budgeted project expense for
				  family projects.
"Syndication" means the admission of limited partners to a
				  partnership through the sale of partnership interests.
"Transaction costs" means those costs related directly to the sale
				  of the project which are paid by or on behalf of the nonprofit. All transaction
				  costs must be approved by the Agency and include, with limitation, required fees and
				  payments specified in
				  5:80-6.4 as well as professional fees of
				  the nonprofit and title insurance.