New Jersey Administrative Code › Title 5 - COMMUNITY AFFAIRS › Chapter 80 - NEW JERSEY HOUSING AND MORTGAGE FINANCE AGENCY › Subchapter 32 - HOUSING INVESTMENT SALES › Section 5:80-32.1 - 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:
"Eligible LD sponsor" means a for-profit corporation or
				  partnership organized under, and remaining subject to, the Limited Dividend Law,
				  P.L. 1949, c. 184, § 1 et seq., as amended (N. J.S.A. 55:16-1et seq.) (repealed
				  by P.L. 1991, c. 431, § 20 (N.J.S.A. 40A:20.1 et seq.)), that owns and operates
				  an Agency-financed, multifamily, rental housing project that, in each of the three
				  fiscal years preceding the housing investment sale, had:
1. Produced a positive cash flow from operations; and
2. Been current in all debt service and escrow payments required
				  by the Agency.
"Housing investment sale" means a previously completed transaction
				  that promotes the provision or maintenance of low and moderate income housing, as
				  defined pursuant to the Fair Housing Act,
				  N.J.S.A. 52:27D-301et
				  seq., through the sale by an eligible LD sponsor of an Agency-financed, multifamily,
				  rental housing project to a qualified housing sponsor upon the following
				  terms:
1. The buyer executed a deed restriction (and such other
				  instruments reasonably required by the Agency) at the closing of the housing
				  investment sale to ensure that the project will remain affordable to low and/or
				  moderate income tenants as provided in the original mortgages; and subject to Agency
				  restrictions regarding tenant income eligibility, tenant selection, project
				  reserves, return on equity, rent increases, and the provisions at N.J.S.A.
				  55:14K-7bfor 35 years after the expiration of the term of the project mortgage. The
				  foregoing documents shall also have provided for the payment of a servicing fee to
				  the Agency through the end of the additional 35 years for monitoring the
				  restrictions that apply to the project, such fee not being less than the servicing
				  fee being paid by the eligible LD sponsor seller at the time of the housing
				  investment sale; and
2. The eligible LD sponsor invested an amount equal to 50 percent
				  of the maximum additional return in the Housing Investment Sale.
"Housing Investment Sales Account" means an account established
				  under the Agency's administrative fund. Moneys on deposit in the account may be
				  used, at the Agency's sole discretion, to provide loans or grants that will promote
				  the provision or maintenance of low and moderate income housing as defined pursuant
				  to the Fair Housing Act.
"Maximum additional return" means the additional return that was
				  payable to the owners of an eligible LD sponsor under the Limited Dividend Law but
				  not under the Housing and Mortgage Finance Agency (HMFA) Law,
				  N.J.S.A. 55:14K-1et
				  seq.
"Maximum additional return" means the additional return payable to
				  the owners of an eligible LD sponsor under the Limited Dividend Law but not under
				  the Housing and Mortgage Finance Agency (HMFA) Law,
				  55:14K-1 et seq.,
				  consisting of:
1. Cash invested by the owners in the eligible LD sponsor that has
				  not previously been recognized by the Agency as investment in a housing project
				  (including, but not limited to, those amounts invested by the owners at the initial
				  Agency mortgage closing; any DCE/CDE funds; and the reserve for repair and
				  replacement account, the operating reserve account and the tax and insurance escrow
				  accounts (being transferred to the buyer in conjunction with the housing investment
				  sale);
2. A cumulative annual return of eight percent on the investment
				  described in 1 above;
3. If project revenues representing the return described in 2
				  above have been invested in the project's residual receipts account or otherwise,
				  any income earned on said annual return;
4. An amount equal to the total reduction or amortization of the
				  original principal owing on the eligible LD sponsor's mortgage loan from the Agency;
				  and
5. An amount equal to the increase in the market value of the
				  eligible LD sponsor's realty and tangible personalty during the period such assets
				  were owned by the eligible LD sponsor, such increase to be determined by subtracting
				  the following from the purchase price for those assets:
i. The eligible LD sponsor's investment in the project as
				  determined by the Agency under the HMFA Law; and
ii. The original principal amount of the eligible LD sponsor's
				  mortgage indebtedness to the Agency.
"Purchase price" means, in a housing investment sale, a sum equal
				  to the fair market value of the realty and tangible personalty transferred to the
				  buyer in the sale said sum to be comprised of:
1. Assumption of the eligible LD sponsor's first mortgage loan
				  from the Agency and any other indebtedness of the eligible LD sponsor secured by
				  project assets;
2. Cash paid by the buyer at the closing of the housing investment
				  sale; and
3. Such obligations or instruments of indebtedness of the buyer in
				  favor of the seller as the Agency may approve pursuant to
				  5:80-32.3(c).
"Residual receipts" means the balance of funds (including
				  Development Cost Escrow and Community Development Escrow funds) remaining after the
				  deduction of the following items from the cash and the investment accounts of an
				  eligible LD sponsor:
1. Debt service arrearages;
2. Current unpaid invoices;
3. Three months of operating expenses (for senior citizen
				  projects) or six months of operating expenses (for family projects), which includes
				  debt service and reserve payments, of the latest Agency approved annual
				  budget;
4. Full funding of all required reserve accounts;
5. Anticipated or proposed capital improvements;
6. Any other current obligations of the qualifying development;
				  and
7. Accrued but undistributed return on equity.