13. a. In order to encourage the construction, acquisition and rendering of life safety improvements at or to boarding houses, the agency is hereby authorized to finance by life safety improvement loans the construction, acquisition and rendering of life safety improvements at or to boarding houses and residences utilized by fraternities or sororities which are recognized by a public or private institution of higher education. For the purposes of this section, “boarding house” shall include reference to residences utilized by fraternities or sororities which are recognized by a public or private institution of higher education.

b. To carry out the purposes of this section, the agency may accept from boarding house owners applications for life safety improvement loans and enter into agreements with boarding house owners with respect thereto. In considering applications for life safety improvement loans, the agency shall give consideration to:

(1) the degree of need for the life safety improvement at the boarding house with respect to which the application is made;

(2) factors affecting the tax-exempt status of interest on the bonds issued by the agency to raise the money necessary to make the life safety improvement loan, including the location and ownership of boarding houses with respect to which applications have been and are being made;

(3) the extent of the benefit which, in the agency’s opinion, can be expected to be achieved from the life safety improvement intended to be financed with the life safety improvement loan for which the application is made, giving effect to, among other things, the cost of such life safety improvement;

(4) the applicant’s ability to obtain alternate financing; and

(5) the extent of the applicant’s compliance with the “Rooming and Boarding House Act of 1979,” P.L.1979, c.496 (C. 55:13B-1 et seq.), if that act is applicable. This determination shall be accomplished through an inspection of the boarding house by either the New Jersey Department of Community Affairs or the New Jersey Department of Health and Senior Services. Deficiencies which are to be corrected through life safety improvement loans are not to be used as a basis for disapproving a loan under this section.

c. Life safety improvement loans made by the agency shall not be subject to the terms and conditions set forth in sections 6 through 10 of this act but shall be subject to the following terms and conditions:

(1) the amount of the loan shall not exceed 100% of the cost of the life safety improvement to be constructed, acquired or rendered, as determined by the agency.

(2) the interest rate on the loan shall be established by the agency at the lowest level consistent with the agency’s cost of operation but not lower than the effective cost of the agency of the obligations of the agency sold to raise the money used to make the loan.

(3) the loan shall be evidenced by a promissory note which shall contain terms and provisions and be in a form approved by the agency . Except for loans made to owners of residences that are utilized as fraternities or sororities, but are not otherwise rooming and boarding houses, the terms and provisions shall include, but not be limited to, agency requirements that: (a) the boarding house owner remit to the agency the entire unpaid balance of all life safety improvement loans made by the agency to the boarding house owner as of the time when the facility ceases to be a boarding house, and the money shall be used for making new boarding house life safety improvement loans or any other lawful purpose; (b) the boarding house owner remit to the agency, for payment to the Department of Community Affairs for deposit in the “Boarding House Rental Assistance Fund,” established under section 14 of this act, an amount equal to the rental assistance payments made to or on behalf of the residents of a boarding house, pursuant to this section, prior to the point in time when the facility ceases to be a boarding house, but the inclusion of this second requirement in the promissory note and the remittance of that amount shall be required if and to the extent that the agency determines it to be feasible and practicable; and (c) in the event of any sale which occurs during the period when the life safety improvement loan is being repaid to a purchaser who will maintain the facility as a boarding house, the boarding house owner shall either remit the entire unpaid balance of all life safety improvement loans made by the agency to the boarding house owner or require the purchaser to assume the loan.

(4) as a condition of the loan, the agency shall have the power at all times during the construction, acquisition or rendering of a life safety improvement at or to a boarding house and for a reasonable period of time subsequent thereto to enter without prior notice the boarding house with respect to which the loan is made in order to inspect the construction, acquisition or rendering of the life safety improvement being financed with the loan.

L.1983,c.530,s.13; amended 2000, c.56, s.13.