New Jersey Administrative Code
Title 5 - COMMUNITY AFFAIRS
Chapter 80 - NEW JERSEY HOUSING AND MORTGAGE FINANCE AGENCY
Subchapter 5 - TRANSFER OF OWNERSHIP INTERESTS
Section 5:80-5.7 - Secondary financing
Universal Citation: NJ Admin Code 5:80-5.7
Current through Register Vol. 56, No. 18, September 16, 2024
(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.
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