Current through Register Vol. 56, No. 18, September 16, 2024
(a)
The Balanced Housing Program may provide assistance to eligible applicants
applying on behalf of existing Balanced Housing projects in need of additional
financial assistance to establish and/or ensure the ongoing viability of the
housing.
(b) Applicants, their
subsidiary or parent corporations receiving funding pursuant to this section,
shall not be eligible for any other form of Balanced Housing assistance for a
period of two years from the time that such funding is received.
(c) Eligible projects shall be limited to
those proving severe financial distress and an inability to meet normal
operating and debt service obligations. Inability to meet debt service ratios,
fund reserve accounts, pay deferred developer fee and/or any other partnership
distributions, shall not be considered indicators of severe financial
distress.
(d) Eligible projects
must be in service for at least two years and shall be in compliance with all
affordability control, audit and reporting requirements of the Grant Agreement
and loan documents from the Division.
(e) The amount of assistance and the terms
and conditions of assistance shall be at the discretion of the
Commissioner.
(f) Applicants will
provide documentation of need including, but not limited to:
1. A narrative report setting forth the
reason(s) that assistance is necessary, steps that have been taken to establish
stability, and a specific dollar request for financial support from the
Balanced Housing program;
2. Annual
audits for the project for all years since the project was completed or placed
in service;
3. A Copy of the Equity
Investor agreement, if the project has received LIHTCs, including current
contact information for the equity investor;
4. A listing of all project debt (hard and
soft), the names and current contact information of lenders, the terms and
conditions, the current balance and status of all loans;
5. A Certification from the developer/general
partner as to the total amount of developer fee allowed, initially taken and
still pledged to the project;
6. A
Certification from the developer/general partner/equity investor as to any cash
infusion into the project after the project was placed in service;
7. A Capital Needs Assessment for the project
done by an independent party (architect/engineer), or by the owner using a form
approved by the Department and reviewed and certified by the Technical Services
Division of the NJHMFA;
8. A
20-year cash flow projection; and
9. A Copy of the Municipal Payment in Lieu of
Taxes (PILOT) Agreement.
(g) Sponsors of moderate rehabilitation
projects shall be required to demonstrate on-going management capacity and
financial feasibility of the project for the length of the control period
including, but not limited to, the provision of reserves to ensure timely
repair and replacement of any systems not addressed during the initial
rehabilitation.
(h) An applicant
may request an exception to the allowable annual rental increase subject to the
following:
1. A sponsor may request an
exception to the allowable annual rental increase no more then once during a 10
year period;
2. If the rents are
not subject to review and approval by HUD or subject to automatic annual
adjustments pursuant to a valid Housing Assistance Payments contract, or
regulated by a local rent control board, then the Commissioner may make or
approve a rent increase without a hearing, as long as the resulting rents do
not exceed the rents in effect for the same units in the housing project at any
time in the previous 12 months by more than the combined percentage of (h)2i
and ii below:
i. The allowable increase
identified in the existing program affordability control documents for the
project; and
ii. The percentage, up
to a maximum of 12 percent annually, needed to fund operation deficits, debt
service arrears or reserves for repair and replacement incurred at the housing
project. No part of the rent increase shall be used for return on equity to the
sponsor;
3. If a rent
increase is requested, the applicant must provide proof that all tenants have
been notified, in writing, of the request. The letter must specify the
percentage increase being requested and how it will affect rents; and
4. The allowable rent increase shall be at
the sole discretion of the Commissioner and shall be final.
