New Jersey Administrative Code
Title 5 - COMMUNITY AFFAIRS
Chapter 80 - NEW JERSEY HOUSING AND MORTGAGE FINANCE AGENCY
Subchapter 5 - TRANSFER OF OWNERSHIP INTERESTS
Section 5:80-5.8 - Return on equity
Universal Citation: NJ Admin Code 5:80-5.8
Current through Register Vol. 56, No. 18, September 16, 2024
(a) The buyer shall assume the same rate of return on equity that the seller had. The buyer's equity in the housing project shall be determined in accordance with 5:80-3.3(a).
(b) The seller shall be limited to a cumulative, but not compounded, return on its equity, from project operations or sale, at the rate of return as determined by N.J.A.C. 5:80-3 and set forth in the mortgage and other contractual documents between the seller and Agency.
1. Upon sale or other disposition of the
project or any interest therein, the seller shall be entitled to a return of
its equity in the project and any accrued but undistributed return on its
equity. Such return shall be conditioned upon the Agency's mortgage and any
other supplemental project financing from the Agency or other governmental
agency or department being assumed by the buyer, and further conditioned upon
the making of any required project repairs or improvements, pursuant to
5:80-5.4(d), and
the payment of all amounts due the Agency and the funding of reserves pursuant
to 5:80-5.4(e). The
seller shall not be entitled to or paid any return until such conditions have
been met. The seller's equity in the project shall be determined in accordance
with 5:80-3.3(a).
2. Upon sale or other disposition of the
project or any interest therein, the seller is not entitled to and may not
retain or be paid any more than its equity in the project plus any accrued but
undistributed return on its equity. Any amounts realized in excess of the
aforementioned amounts less the total of the amounts listed below shall be paid
into the Multi-family Rental Investment Program:
i. Any amount of the purchase price that is
paid or escrowed in an Agency controlled account for repairs or improvements
pursuant to
5:80-5.4(d);
ii. Any amounts paid to fund reserves
pursuant to
5:80-5.4(e);
and
iii. Any mortgages or other
supplemental financing from the Agency or other governmental agency or
department that are paid or assumed upon transfer.
3. Funds paid into the Multi-family Rental
Investment Program shall be used as provided therein or in the case of a
housing sponsor organized under N.J.S.A. 55:16-1 et seq., such excess shall be
distributed pursuant to said Act. The funds deposited into this program shall
be used for the purpose of providing loans to rental projects meeting low and
moderate income needs.
4. In cases
where the sale or other disposition of the project includes a permitted
prepayment of the Agency mortgage, return on equity shall be governed by the
provisions of
5:80-5.10(b).
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