New Jersey Administrative Code › Title 3 - BANKING › Chapter 1 - GENERAL PROVISIONS › Subchapter 1 - INTEREST AND USURY › Section 3:1-1.1 - Interest rates

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The maximum
				rate of interest to be charged, or taken or received upon a loan of any money,
				wares, merchandise, goods and chattels shall be six percent per annum, or shall
				be 16 percent per annum when there is a written contract specifying a rate of
				interest, except as herein or otherwise provided by law. Such interest shall be
				calculated in accordance with
				31:1-1, as amended.
(b) The maximum rate of interest to be
				charged on loans secured by a first lien on real property on which there is
				erected or to be erected a structure containing one, two, three, four, five or
				six dwelling units, a portion of which structure may be used for nonresidential
				purposes, shall be at least six percent per annum but not more than the Monthly
				Index of Long Term United States Government Bond Yields, compiled by the Board
				of Governors of the Federal Reserve System and as published by said Board of
				Governors in the monthly Federal Reserve Bulletin, for the second preceding
				calendar month plus an additional 3.5 percent per annum rounded off to the
				nearest quarter of one percent per annum. Such interest shall be calculated in
				accordance with
				31:1-1, as amended.
(c) Contracts for the following classes or
				types of loans may lawfully provide for any rate of interest which the parties
				agree upon, and interest at any such rate may lawfully be taken:
1. Loans in the amounts of $50,000 or more,
				except loans where the security given is a first lien on real property on which
				there is erected or to be erected a structure containing one, two, three, four,
				five or six dwelling units, a portion of which structure may be used for
				nonresidential purposes. The rate of interest stated in such contract upon the
				origination of such loans may be taken notwithstanding that payments thereon
				reduce the amount outstanding to less than $50,000;
2. Loans or advances of credit made by
				savings and loans associations, banking institutions or any Department of
				Housing and Urban Affairs or Federal Housing Administration approved mortgagees
				which are subsequently purchased, in whole or in part, by the Federal Housing
				Administration, Veterans Administration, Farmers Home Administration, Federal
				National Mortgage Association, Government National Mortgage Association,
				Federal Home Loan Mortgage Corporation, and any successor thereof or by any
				organization authorized by the Emergency Home Finance Act of 1970 to purchase
				such loans or by any State or Federal governmental or quasi-governmental
				organizations.
3. If such loan is
				not purchased within 395 days from the date the loan instruments are executed,
				the maximum rate of interest which may be charged on such loan shall not be in
				excess of that authorized by the commissioner under the provisions of this
				section and such rate of interest, if in excess of that rate, shall be reduced
				to the rate in effect at the date of the execution of the loan instruments. No
				such reduction shall change the maturity date of the loan without the written
				consent of the borrower nor shall such reduction affect the lien of the
				mortgage which secures the loan.