55:14K-50. Guarantee of construction loans

6. a. The agency is hereby authorized to guarantee with moneys in the fund construction loans made to qualified housing developers of qualified housing developments, in compliance with the terms of this act and subject to the conditions set forth in this section.

b. A construction loan may be guaranteed only to a housing developer who has qualified therefor by demonstrating to the satisfaction of the agency that the housing developer has the ability to develop, construct and complete the housing development in which he is engaged or proposes to engage, and that he has sufficient ability, reputation and credit-worthiness to obtain permanent financing upon such completion.

c. A construction loan may be guaranteed only with respect to a housing development of 100 units or fewer, or to a segment not exceeding 100 units of a larger housing development projected or in progress; and no such loan shall be made for a subsequent unit of a larger housing development until the satisfaction of any loan made with respect to a prior segment of the same development.

d. A construction loan with respect to any housing development may be guaranteed only when it has been demonstrated to the satisfaction of the agency that, with respect to the size, location, potential sales market for units in that development, the proposed marketing policy and projected sales revenue to the housing developer, and other pertinent economic factors indicate an economic viability sufficient to qualify that development for such a loan guarantee within the terms and purposes of this act. Aside from this, no constraints may be placed upon the marketing or pricing policy of a qualified housing developer as a condition of a construction loan guarantee.

e. No construction loan guaranteed pursuant to this act shall be made for a period of more than two years; except that the agency may, by regulation, provide for cases in which unforseen economic changes or physical obstacles may warrant an extension.

f. Every loan guaranteed pursuant to this act shall be secured by a first lien upon the real property concerned in the development, or segment thereof, with respect to which the loan is made and such other collateral as the agency may consider necessary to secure the interests of the fund in accordance with the provisions and purposes of this act; and the agency may, if it deems necessary, require the loan to be secured by a personal loan guaranty by the developer or by a lien upon other real property contained in a development not included in the segment with respect to which the loan is made, or upon any other real property, or interest therein, belonging to the qualified housing developer to whom the loan is made.

g. No construction loan shall be guaranteed if the loan exceeds 80 percent of the sales price of the development, or segment thereof, or the total sales price of all units therein, as estimated to the satisfaction of the agency at the time when the loan is issued.

h. None of the restrictions or conditions attached to the issuance of an "eligible loan," and the qualifications of a "housing sponsor" to whom such a loan may be made, as those terms are defined and used in P.L.1983, c.530 (C.55:14K-1 et seq.), shall apply to any qualified housing development, qualified housing developer, or construction loan guaranteed pursuant to the terms of this act.

L.1992,c.114,s.6.