55:14K-68. Powers, duties of agency

5. a. The agency is hereby authorized to contract with institutional lenders to guarantee on behalf of a qualified housing developer the repayment of up to 30 percent of the full principal balance of a loan outstanding at the time of any default, up to a maximum of $300,000, provided subsection c. of this section is complied with.

b. The agency shall establish within the fund sufficient reserves and liquid reserves to provide a sufficient and actuarially sound basis for its pledges contained in any guarantee contract entered into pursuant to subsection a. of this section.

c. The agency shall adopt rules and regulations governing the issuance of loan guarantees pursuant to this section, including matters related to the duties and the exercise of the powers of the agency under this section, and the provision of technical assistance to developers, including:

(1) procedures for the submission of requests for such guarantees;

(2) standards and requirements governing the allocation of guarantees to applicant institutional lenders, and determining the fees to be charged therefor and the manner of payment of those fees; and

(3) after consultation with participating institutional lenders, reasonable restrictions as to the maturities and interest rates of any loan, or the return realized therefrom by the institutional lender, and requirements as to commitments by institutional lenders with respect to loans upon which guarantees may be issued.

d. A loan guarantee may be made only with respect to a housing development of 25 units or fewer, or to a segment not exceeding 25 units of a larger housing development projected or in progress.

e. A loan guarantee shall include assurances of long-term affordability to low and moderate income tenants for a portion of the units in the development.

f. A loan guarantee with respect to any housing development may be made when it has been demonstrated to the satisfaction of the agency that the qualified housing developer has met the criteria for a loan guarantee as specified in this section. The agency shall make such a determination within 30 days of submission of an application by a qualified housing developer.

g. Every loan subject to a loan guarantee made pursuant to this section 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. The agency may, if it deems necessary, require the loan to be secured by a personal loan guarantee 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; provided, however, that no personal loan guarantee shall be required of any agent or officer of a nonprofit housing developer.

h. The provisions of P.L.1995, c.359 (C.55:14K-64 et al.), to the extent that they can be read to be in conflict with the provisions of P.L.1983, c.530 (C.55:14K-1 et seq.), shall be read to enlarge the powers granted by that act, or when directly contrary, supersede any such provision.

L.1995,c.359,s.5.