N.J. Admin. Code § 5:80-5.7 - Secondary financing

(a) Secondary financing, representing a portion of the purchase price, may be permitted by the Agency. However, the following limitations exist where secondary financing is an element of the transaction:

1. The Agency will review and may restrict all secondary financing particularly where the secondary financing is secured by a lien on the project;

2. Repayment of secondary financing cannot be taken into consideration in determining the rents to be charged tenants;

3. The second mortgage, security agreement, or any other debt instrument must be subordinate to any existing mortgage of the Agency;

4. In the event of a declaration of default on any existing mortgage held by the Agency, the secondary financing debt and all rights thereunder to rent or any other project income or assets shall be assigned to the Agency.

Notes

N.J. Admin. Code § 5:80-5.7

Amended by 49 N.J.R. 3423(c), effective 10/16/2017