New Jersey Statutes Title 58. Waters and Water Supply 58 § 25-5

a. Upon application therefor, the commissioner may make loans from the State Sewerage Facilities Loan Fund to any local governmental unit or units which would have been eligible for a grant under the provisions of section 14 of this act  1 for the preparation of preliminary engineering plans and detail design and engineering drawings and specifications and contract documents for the construction of a new or the expansion of an existing sewerage facility for the collection, treatment and disposal of sewage in such unit or units; provided a feasibility study or report upon such facility has been filed with and approved by the commissioner. Such report and study need not have been prepared with a grant provided under the provisions of section 14 of this act but must otherwise satisfy the standards set forth therein.

b. All loans shall be subject to such terms and conditions as shall be prescribed by the commissioner to carry out the purpose of this act provided the entire loan shall be repaid to the State Sewerage Facilities Loan Fund on or before the date when contracts shall have been awarded for the construction of the proposed sewerage works or 3 years from the date of the loan whichever is the earlier. The loans shall be repaid without interest unless construction is not started within 3 years of the date of the loan in which case the loan shall be repaid together with 2% interest per annum thereon.

c. Loans may be made for any amount not in excess of the entire cost of such plans, drawings and documents but shall not be applied to any costs of engineering supervision or inspection during or after the construction of the proposed sewerage works.