a. The loan shall be for a period of time not in excess of 50 years as determined by the authority;

b. The amount of the loan shall not exceed 90% of the project cost as determined by the authority, except that in the case of projects to be owned, constructed, rehabilitated, operated, managed and maintained as mutual housing or by any corporation or association organized not for profit which has as one of its purposes the construction or rehabilitation of housing projects, the amount of the loan shall not exceed 100% of the project cost as determined by the authority; provided, however, that any such loan shall be subject to an agreement between the authority and any such corporation or association organized not for profit or for mutual housing, prohibiting the transfer of ownership or management responsibilities by said corporation or association at any time prior to repayment of at least 10% of the original loan, unless the transfer of ownership or management responsibilities is ordered by a court of competent jurisdiction to a qualified housing sponsor;

c. The interest rate on the loan shall be established by the authority at the lowest level consistent with the authority’s cost of operation and its responsibilities to the holders of its bonds, bond anticipation notes and other obligations;

d. The loan shall be evidenced by a mortgage note or bond and by a mortgage which shall be a first lien on the project, except as provided in subsection i. of this section, and which shall contain such terms and provisions and be in such form, as approved by the authority. The authority shall require the qualified housing sponsor receiving a loan or its contractor to post labor and materials, and construction performance, surety bonds in amounts related to the project cost as established by rule or regulation, and to execute such other assurances and guarantees as the authority may deem necessary, and may require its principals or stockholders to also execute such other assurances and guarantees as the authority shall deem necessary;

e. The loan shall be subject to an agreement between the authority and the qualified housing sponsor which will subject said qualified housing sponsor and its principals or stockholders to limitations established by the authority as to rentals and other charges, builders’ and developers’ profits and fees, and the disposition of its property and franchises, to the extent more restrictive limitations are not provided by the law under which the borrower is incorporated or organized;

f. The loan shall be subject to an agreement between the authority and the qualified housing sponsor limiting said qualified housing sponsor, and its principals or stockholders, to a return of 8% per annum of its investment in any housing project assisted with a loan from the authority. No qualified housing sponsor which is permitted by the provisions of the law under which it is organized or incorporated to earn a return on its investment, nor any of the principals or stockholders of such qualified housing sponsor, shall at any time earn, accept or receive a return greater than 8% per annum of its investment in any housing project assisted with a loan from the authority whether upon the completion of the construction or rehabilitation of such project, or upon the operation thereof, or upon the sale, assignment or lease of such project to any other person, association or corporation;

g. No loan shall be executed, except a loan made to a corporation or association organized not for profit which has as one of its purposes the construction or rehabilitation of housing projects or for mutual housing, unless the qualified housing sponsor agrees: (1) to certify upon completion of project construction or rehabilitation, subject to audit by the authority, either that the project cost as defined in this act exceeded the amount of the loan proceeds by 10% or more, or the amount by which the loan proceeds 90% of the project cost; and (2) to pay forthwith to the authority, to be applied to reduce the principal of the loan, the amount, if any, of such excess loan proceeds, subject to audit and determination by the authority. No loan shall be made to a corporation or association organized not for profit or for mutual housing unless it agrees to certify the project cost upon completion of the project, subject to audit and determination by the authority, and further agrees to pay forthwith to the authority, to be applied to reduce the principal of the loan, the amount, if any, by which the proceeds of the loan exceed the certified project cost, subject to audit and determination by the authority. Notwithstanding the provisions of this subsection, the authority may accept, in lieu of any certification of project cost as provided herein, such other assurances of the said project cost, in any form or manner whatsoever, as will enable the authority to determine with reasonable accuracy the amount of said project cost;

h. No loan shall be made for the construction or rehabilitation of a housing project for which tax exemption is granted by a municipality unless such tax exemption remains in effect during the entire term of the loan, unless a lesser period of tax exemption is approved by the authority; and

i. Notwithstanding any other provisions of this section to the contrary, the authority may, if it shall determine that the construction or rehabilitation of low and moderate income housing would be facilitated thereby and that financial benefits may as a result be obtained for families who would reside in the housing, make a loan to a qualified housing sponsor that shall be subordinated to one or more loans holding senior liens on the land on which the project is to be constructed, or on the building or buildings, the rehabilitation of which is to be financed in whole or in part by the authority.

L.1979, c. 275, s. 6, eff. Jan. 3, 1980. Amended by L.1982, c. 113, s. 16, eff. Aug. 14, 1982.