N.J. Admin. Code § 3:1-1.1

Current through Register Vol. 56, No. 23, December 2, 2024

Section 3:1-1.1 - Interest rates

(a) The maximum rate of interest to be charged, or taken or received upon a loan of any money, wares, merchandise, goods and chattels shall be six percent per annum, or shall be 16 percent per annum when there is a written contract specifying a rate of interest, except as herein or otherwise provided by law. Such interest shall be calculated in accordance with 31:1-1, as amended.

(b) The maximum rate of interest to be charged on loans secured by a first lien on real property on which there is erected or to be erected a structure containing one, two, three, four, five or six dwelling units, a portion of which structure may be used for nonresidential purposes, shall be at least six percent per annum but not more than the Monthly Index of Long Term United States Government Bond Yields, compiled by the Board of Governors of the Federal Reserve System and as published by said Board of Governors in the monthly Federal Reserve Bulletin, for the second preceding calendar month plus an additional 3.5 percent per annum rounded off to the nearest quarter of one percent per annum. Such interest shall be calculated in accordance with 31:1-1, as amended.

(c) Contracts for the following classes or types of loans may lawfully provide for any rate of interest which the parties agree upon, and interest at any such rate may lawfully be taken:

1. Loans in the amounts of $50,000 or more, except loans where the security given is a first lien on real property on which there is erected or to be erected a structure containing one, two, three, four, five or six dwelling units, a portion of which structure may be used for nonresidential purposes. The rate of interest stated in such contract upon the origination of such loans may be taken notwithstanding that payments thereon reduce the amount outstanding to less than $50,000;

2. Loans or advances of credit made by savings and loans associations, banking institutions or any Department of Housing and Urban Affairs or Federal Housing Administration approved mortgagees which are subsequently purchased, in whole or in part, by the Federal Housing Administration, Veterans Administration, Farmers Home Administration, Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Mortgage Corporation, and any successor thereof or by any organization authorized by the Emergency Home Finance Act of 1970 to purchase such loans or by any State or Federal governmental or quasi-governmental organizations.

3. If such loan is not purchased within 395 days from the date the loan instruments are executed, the maximum rate of interest which may be charged on such loan shall not be in excess of that authorized by the commissioner under the provisions of this section and such rate of interest, if in excess of that rate, shall be reduced to the rate in effect at the date of the execution of the loan instruments. No such reduction shall change the maturity date of the loan without the written consent of the borrower nor shall such reduction affect the lien of the mortgage which secures the loan.

N.J. Admin. Code § 3:1-1.1

As amended, R.1973 d.191, eff. 7/16/1973.
See: 5 New Jersey Register 258(b).
As amended, R.1973 d.366, eff. 12/21/1973.
See: 6 New Jersey Register 50(b).
As amended, R.1974 d.132, eff. 5/31/1974.
See: 6 New Jersey Register 255(b).
As amended, R.1974 d.140, eff. 6/11/1974.
See: 6 New Jersey Register 255(b).
As amended, R.1974 d.247, eff. 9/6/1974.
See: 6 New Jersey Register 387(b).
As amended, R.1975 d.21, eff. 1/30/1975.
See: 7 New Jersey Register 94(b).
As amended, R.1976 d.240, eff. 7/29/1976.
See: 8 New Jersey Register 412(a).
As amended, R.1976 d.404, eff. 12/15/1976.
See: 9 New Jersey Register 4(a).
As amended, R.1978 d.204, eff. 6/23/1978.
See: 10 New Jersey Register 315(a).
As amended, R.1979 d.190, eff. 5/11/1979.
See: 11 New Jersey Register 270(c).
As amended, R.1980 d.151, eff. 4/10/1980.
See: 12 New Jersey Register 249(b).
As amended on an emergency basis, R.1981 d.429, eff. 10/20/1981, exp. 12/21/1981. See: 13 New Jersey Register 753(b). Readopted, R.1981 d.511, eff. 12/22/1981. See: 13 New Jersey Register 753(b), 14 New Jersey Register 101(c).
(a): "October 20, 1981" was "April 10, 1980"; "Six" percent was "8" percent; and "or shall be ... rate of interest" added.
(b): "October 20, 1981" was "April 10, 1980"; "17" percent was "14 1/2 " percent.
(e): "October 20, 1981" was "April 10, 1980".
Amended by R.1988 d.282, effective 6/20/1988.
See: 19 New Jersey Register 2089(a), 20 New Jersey Register 1343(b).
Change "17" to "six" percent per annum. Added text to (b) "but not more ... 1 percent per annum".
Amended by R.2001 d.112, effective 4/2/2001.
See: 33 New Jersey Register 213(a), 33 New Jersey Register 1087(a).
In (a), deleted ", made on or after October 20, 1981," following "chattels"; in (b), deleted the last sentence; deleted (d) and (e).