Real Estate Impact Fund

The goal of the Real Estate Impact Fund is to support and foster redevelopment in strategic urban and other significant locations that would not otherwise occur in the near term and to strengthen existing and catalyze future development opportunities and private investment. The Fund will advance economic development by supporting projects consistent with local redevelopment plans or strategies, attract private investment, and by creating or retaining jobs.

The Real Estate Impact Fund helps to advance real estate development through two components:


Private Component:  For profit and non-profit developers and business entities with demonstrated experience in successfully completing real estate development projects may be eligible for financing of up to $3 million for costs associated with projects located within Targeted Areas, as noted below.

Public Component:  Properties in Targeted Areas, as noted below, that are owned by the municipality, local redevelopment agency or county improvement authority may be eligible for financing of up to $750,000 for eligible project costs.


  • Dollar Amount

    Private Component: Up to $3 million to developers and not-for-profit organizations for costs associated with projects located within Targeted Areas, as noted below


    Public Component: Up to $750,000 for costs associated with projects located within Targeted Areas that are owned by the municipality, local redevelopment agency or county improvement authority

  • Uses

    Loan proceeds can be used for eligible project development costs


    Please see "Eligible Uses" below for more information

  • Benefits

    Support of redevelopment in strategic urban and other significant locations that would not otherwise occur in the near term and to strengthen existing and catalyze future development opportunities and private investment

  • Eligibility

    Please see "Eligible Projects" below for more information

Eligible Projects:

Private Component:

Small and mid-size real estate development projects, including: mixed-use (residential and minimum 20% commercial); retail; office; industrial; entertainment venues; associated parking garage structures; and/or land acquisition/assemblages. Total project cost should typically not exceed $15 million. Projects can be either new construction or substantial rehabilitation (defined as rehabilitation costs equaling not less than 50% of the value of the property after rehabilitation (excluding land value).

Residential only projects are ineligible.

Public Component: 

  • Property Must be owned by the Applicant
  • Property must be zoned for commercial or mixed-use, or commercial or mixed use as a permitted use within an approved redevelopment plan.  Residential only projects are ineligible.
  • The property, in its remediated condition, must have an appraised value equal to or greater than 120% of the requested loan amount.
  • Property must be contiguous lots.


Targeted Areas:

Projects must be located in either an Urban Aid Municipality, defined as a municipality qualified to receive assistance under P.L. 1978, c.14 (N.J.S.A. 52:27D-178 et seq.); or within Fort Monmouth or be a New Jersey university/college sponsored project that is a public-private partnership that promotes emerging technologies or industries.


Available Financing:

Private Component:

  • Minimum loan amount of $250,000
  • Maximum loan amount of $3,000,000
  • Loan shall not exceed 25% of total project costs. Total public (federal, state and/or local government) funding cannot exceed 50% of total project costs.

Public Component:
 
  • Minimum loan amount of $100,000
  • Maximum loan amount of $750,000
  • Loan will be the lesser of 100% of total project costs or the property’s appraised value, in its remediated condition, divided by 120%, rounded to the nearest one-hundred dollars.
 

Job Creation:

Private Component:

1 full time job must be created/maintained for every $65,000 of Authority assistance.

Public Component:

Applicant must provide a plan for the end-use of the site including an estimate of the number of jobs expected to be created based on the anticipated build-out of the property and the current zoning.  Job creation will be measured by the project developed on the site and the return of the property to the real estate tax roll.
 

Eligible Uses:

Loan proceeds can be used for eligible project development costs, which include:

Private Component:

  • Property acquisition and assembly;
  • Demolition and site clearance;
  • Environmental investigation and remediation;
  • Pre-development costs;
  • On-site infrastructure;
  • General construction and/or rehabilitation; and
  • Associated soft development expenses
Public Component:
 
  • Title
  • Survey
  • Environmental investigation and remediation;
  • Pre-development costs;
  • On-site infrastructure;
  • General construction and/or rehabilitation; and
  • Marketing the site for sale
 

Financing Instruments:

Private Component:

  • Security/Subordination – the Loan shall be secured by a mortgage; the Authority will subordinate its lien position to other project bank debt;
  • Additional – second assignment of all leases, as applicable

Public Component:
 
  • EDA financing must be in first mortgage lien position, including any federal, county, and municipal liens (i.e., a property will not be eligible if there is any outstanding governmental lien)
 

Loan Term:

  • Term: Maximum 10 years
    • Private Component: Commencing upon construction completion
    • Public Component:  Commencing upon loan closing.
  • Loan due at earlier of refinancing, sale of property, ownership change/transfer ("Liquidity Event"), or end of loan term

Owner Equity:

Private Component:

  • Applicant must provide Owner Equity equal to a minimum of 10% of total project costs and must match Impact Fund investment 1:1; Owner Equity shall not include grants or developer fee.

Rates, Repayment & Participating Mortgage Loan Structure:

Private Component: 

  • Interest rate: 3%
  • Payment on accrued interest shall be made from the project's net cash flow, after payment of all project debt, based on loan percentage in relation to the percentage of total equity contributed by the applicant at the time of project completion, issuance of a permanent certificate of occupancy and submission of the final project. However, in no event shall the actual total equity contributed by the applicant to the project be less than what was presented at the time of approval of the loan.
  • If net cash flow is insufficient to pay interest only, then any unpaid interest shall accrue and be added to the outstanding principal balance.
  • If the percentage of net cash flow is in excess of the current interest, then the payment shall first be applied to accrued interest, if any, and then to reduce outstanding principal.
  • At approval, the Board shall determine the Effective Rate of the loan, which shall range between 3 – 10%, determined by the economic feasibility and the need of the loan for the project.
  • All unpaid or deferred interest payments and principal plus amount equal to Effective Rate shall be due in full at end of the loan term or at a Liquidity Event.
Public Component:
 
  • Interest rate: 3%
  • During the term of the loan, interest shall accrue and be added to principal annually at the stated interest rate until the earlier of the Liquidity Event or the end of the term.
  • All unpaid or deferred interest payments and principal shall be due in full at the end of the loan term, or at a Liquidity Event.
 

Fees*:

  • Application fee: $2,500
  • Commitment fee: 0.875% of loan amount
  • Closing fee: 0.875% of loan amount
  • Applicants will reimburse NJEDA for any third party fees (e.g. appraisals, market studies, etc.) as necessary, prior to Board approval
  • Loan modification fees apply.

* Fees are non-refundable

Please review the application checklist prior to submitting your application to ensure that all required information has been provided.