A03669 Summary:

BILL NOA03669A
 
SAME ASNo Same As
 
SPONSORCymbrowitz
 
COSPNSREpstein
 
MLTSPNSR
 
Amd §696-a, add §696-e, Gen Muni L; amd §11.00, Loc Fin L; rpld §471 subs 6 & 9, amd Priv Hous Fin L, generally
 
Relates to the modernization of affordable housing financing authorities.
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A03669 Actions:

BILL NOA03669A
 
01/28/2021referred to housing
01/05/2022referred to housing
05/26/2022reference changed to ways and means
05/28/2022amend (t) and recommit to ways and means
05/28/2022print number 3669a
06/01/2022reported referred to rules
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A03669 Committee Votes:

WAYS AND MEANS Chair:Weinstein DATE:06/01/2022AYE/NAY:33/0 Action: Favorable refer to committee Rules
WeinsteinAyeRaAye
GlickAyeFitzpatrickAye
NolanExcusedHawleyAye
PretlowAyeMontesanoAye
ColtonAyeBlankenbushAye
CookAyeNorrisAye
CahillAyeBrabenecAye
AubryAyePalmesanoAye
CusickAyeByrneAye
BenedettoAyeAshbyAye
WeprinAye
RamosExcused
BraunsteinAye
McDonaldAye
RozicAye
DinowitzAye
JoynerAye
MagnarelliAye
ZebrowskiAye
BronsonAye
DilanAye
SeawrightAye
HyndmanAye
WalkerAye
Bichotte HermelAye

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A03669 Floor Votes:

There are no votes for this bill in this legislative session.
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A03669 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         3669--A
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 28, 2021
                                       ___________
 
        Introduced  by M. of A. CYMBROWITZ, EPSTEIN -- read once and referred to
          the Committee on Housing -- reported and referred to the Committee  on
          Ways   and  Means  --  committee  discharged,  bill  amended,  ordered
          reprinted as amended and recommitted to said committee
 
        AN ACT to amend the general municipal law, the local  finance  law,  and
          the  private  housing finance law, in relation to the modernization of
          affordable  housing  financing  authorities;  and  to  repeal  certain
          provisions of the private housing finance law relating thereto
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1.  Paragraphs a, c and g of subdivision 1 of section 696-a of
     2  the general municipal law, as amended by chapter  320  of  the  laws  of
     3  1999, are amended to read as follows:
     4    a.  Notwithstanding  the  provisions  of any general, special or local
     5  law, an agency is hereby authorized to make or contract to  make  grants
     6  or  loans to the owner of any property that is part of an urban develop-
     7  ment action area project for the purpose of  (i)  rehabilitation  of  an
     8  existing  private or multiple dwelling, (ii) providing site improvements
     9  within the urban development action area in which the urban  development
    10  action area project is located, including, but not limited to, water and
    11  sewer  facilities, sidewalks, landscaping, parks and open space, social,
    12  recreational, communal and  other  non-residential  facilities  and  the
    13  outfitting  thereof,  the  curing  of  problems  caused by abnormal site
    14  conditions, excavation and construction of footings and foundations  and
    15  other  improvements  associated with the provision of infrastructure, or
    16  (iii) providing for other costs of construction for the  development  of
    17  private and multiple dwelling housing accommodations.
    18    c. Any loan made in accordance with this section shall be secured by a
    19  note  and  mortgage  upon the property, or any portion of such property,
    20  improved or, in the case of a condominium, a note and mortgage upon each
    21  of the housing accommodations aided by such loan, or in the  case  of  a
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06664-09-2

        A. 3669--A                          2
 
     1  cooperative  housing  corporation, a note and mortgage upon the economic
     2  interest in such corporation of each tenant-shareholder  aided  by  such
     3  loan,  or  upon the property, or any portion of such property, improved,
     4  or upon both such economic interest or property; provided, however, that
     5  all  or  part  of any such loan may be unsecured if necessary to satisfy
     6  the requirements of any participating lender. Such loan shall be  repaid
     7  over such period as the agency shall determine.
     8    g. For purposes of this section, (i) the term "mortgage" shall include
     9  any  pledge or assignment of shares or assignment of a proprietary lease
    10  in a cooperative housing corporation where such pledge or assignment  is
    11  intended  as  security  for  the  performance of an obligation and which
    12  imposes a lien on or affects title to such shares  or  such  proprietary
    13  lease;  and (ii) the term "owner" shall mean an individual, partnership,
    14  corporation or other entity, including a non-profit  company,  a  mutual
    15  company, or a housing development fund company, having record or benefi-
    16  cial  title in fee simple to real property or the lessee thereof under a
    17  lease having a term of at least forty-nine years.
    18    § 2. Section 696-a of the general municipal law, as amended by chapter
    19  465 of the laws of 1993, is amended to read as follows:
    20    § 696-a. Loans. Notwithstanding the provisions of any general, special
    21  or local law, an agency is hereby authorized to make or contract to make
    22  grants or loans[: (i)] to the owner of any property that is part  of  an
    23  urban  development action area project for the purpose of: (i) rehabili-
    24  tation of an existing  private  or  multiple  dwelling,  (ii)  [for  the
    25  purpose  of]  providing  site  improvements within the urban development
    26  action area in which  the  urban  development  action  area  project  is
    27  located,  including,  but  not  limited  to, water and sewer facilities,
    28  sidewalks, landscaping, parks  and  open  space,  social,  recreational,
    29  communal  and other non-residential facilities and the outfitting there-
    30  of, the curing of problems caused by  abnormal  site  conditions,  exca-
    31  vation  and  construction of footings and foundations and other improve-
    32  ments associated with the provision of infrastructure, or (iii) [for the
    33  purpose of] providing for other costs of construction for  the  develop-
    34  ment  of  private  and  multiple dwelling housing accommodations. In the
    35  case of a grant made under this section for  the  rehabilitation  of  an
    36  existing  multiple dwelling intended to be converted to a condominium or
    37  cooperative form of ownership or for the development of one to four unit
    38  housing accommodations or a condominium or  cooperative  housing  corpo-
    39  ration,  such grant shall require a regulatory agreement with the agency
    40  limiting profits. Any loan made in accordance with this section shall be
    41  secured by a note and mortgage upon the property, or any portion of such
    42  property, improved or, in the case of a condominium, a note and mortgage
    43  upon each of the housing accommodations aided by such loan,  or  in  the
    44  case  of a cooperative housing corporation, a note and mortgage upon the
    45  economic interest in such corporation of each  tenant-shareholder  aided
    46  by  such  loan,  or  upon the property, or any portion of such property,
    47  improved, or upon both such economic  interest  or  property;  provided,
    48  however, that all or part of any such loan may be unsecured if necessary
    49  to  satisfy  the  requirements  of any participating lender.   Such loan
    50  shall be repaid over such period as the agency shall determine.  In  the
    51  case  of  a  loan  for  rehabilitation  of an existing multiple dwelling
    52  intended to be converted to a condominium or cooperative form of  owner-
    53  ship  or a loan for the provision of infrastructure or for the provision
    54  of other costs of construction for the development of one to  four  unit
    55  housing  accommodations  or  a condominium or cooperative housing corpo-
    56  ration, such note and mortgage may provide that the loan shall  automat-

        A. 3669--A                          3
 
     1  ically  be reduced to zero over a period of owner-occupancy of the hous-
     2  ing accommodations assisted by such loan. In the case of a grant or loan
     3  made under this section for the purpose of providing rental housing  for
     4  persons  of  low income as defined in section two of the private housing
     5  finance law, such loan or grant shall  require  a  regulatory  agreement
     6  with  the  agency limiting profits and rentals charged. In the case of a
     7  loan made under this section for the purpose of providing rental housing
     8  for persons of low income as defined in section two of the private hous-
     9  ing finance law, such note and mortgage may provide that the loan  shall
    10  automatically  be reduced to zero over a period of up to thirty years of
    11  compliance by the owner with a  regulatory  agreement  with  the  agency
    12  limiting  profits and rentals charged. The repayment of any loan made in
    13  accordance with this section shall be made in  such  manner  as  may  be
    14  provided in such note and mortgage in connection with such loan, and may
    15  authorize the owner, with the consent of the agency, to prepay the prin-
    16  cipal  of  the  loan  subject  to  such  terms and conditions as therein
    17  provided. Such note and mortgage may contain such other terms and condi-
    18  tions not inconsistent with the provisions of this article as the agency
    19  may deem necessary  or  desirable  to  carrying  out  the  purposes  and
    20  provisions  of  this  article  including, but not limited to, provisions
    21  concerning the repayment of the loan, the interest, if any, thereon, and
    22  other charges in connection therewith. For purposes of this section, (1)
    23  the term "mortgage" shall include any pledge or assignment of shares  or
    24  assignment  of  a proprietary lease in a cooperative housing corporation
    25  where such pledge or assignment is intended as security for the perform-
    26  ance of an obligation and which imposes a lien on or  affects  title  to
    27  such  shares  or  such proprietary lease; and (2) the term "owner" shall
    28  mean an individual, partnership, corporation or other entity,  including
    29  a  non-profit  company,  a mutual company, or a housing development fund
    30  company, having record or beneficial title in fee simple to real proper-
    31  ty or the lessee thereof under a lease having a term of at least  forty-
    32  nine years.
    33    §  3.    The  general municipal law is amended by adding a new section
    34  696-e to read as follows:
    35    § 696-e. Servicing.  An agency may make provision for the  performance
    36  of loan or grant servicing functions, including but not limited to func-
    37  tions  related  to lending or providing a grant for construction, as may
    38  generally be performed by an institutional lender. Such agency  may  act
    39  in such capacity or appoint or consent to the appointment of a financial
    40  institution  or other qualified entity, as determined by such agency, to
    41  act in such capacity on behalf of such agency. Such agency is authorized
    42  to pay a reasonable and customary fee to such financial  institution  or
    43  other qualified entity for the performance of such services.
    44    §  4.  Subdivision  41  of  paragraph  a of section 11.00 of the local
    45  finance law, as amended by chapter 400 of the laws of 1994,  is  amended
    46  to read as follows:
    47    41.  Housing.  The  effectuating  of any of the purposes of the public
    48  housing law, other than making loans to limited profit housing companies
    49  pursuant to article two of the private housing finance  law,  and  other
    50  than making loans to owners of existing multiple dwellings, fifty years;
    51  bonds issued by a housing authority pursuant to section forty-one of the
    52  public  housing law and guaranteed by a municipality pursuant to section
    53  ninety-five of the public housing law, five years, in  addition  to  the
    54  foregoing  period  of  fifty  years,  for  the  temporary financing of a
    55  project prior to the permanent financing thereof; evidences  of  indebt-
    56  edness  issued  to the state pursuant to paragraph c of section 20.00 of

        A. 3669--A                          4
 
     1  this chapter, three years, in addition to the foregoing period of  fifty
     2  years  for  the  temporary financing of a project prior to the permanent
     3  financing thereof; loans to limited profit housing companies pursuant to
     4  article  two of the private housing finance law, fifty-five years; loans
     5  or grants to owners of existing private or multiple dwellings, non-resi-
     6  dential property, or vacant land pursuant to the provisions  of  article
     7  eight,  article  eight-A,  article  eight-B,  article  eleven or article
     8  fifteen  of  the  private  housing  finance  law,  or  loans   for   the
     9  construction  of  multiple  dwellings  pursuant to article eleven of the
    10  private housing finance law, or loans or grants for the  pre-development
    11  costs or construction of private or multiple dwellings pursuant to arti-
    12  cle twenty-two of the private housing finance law, thirty years.
    13    § 5. Section 2 of the private housing finance law is amended by adding
    14  a new subdivision 30 to read as follows:
    15    30. "Climate resiliency improvements." Improvements for the purpose of
    16  protecting  land or any structures thereon from damage resulting from or
    17  which may result from changes in climate, including, but not limited to,
    18  extreme weather events, abnormal temperatures, and sea level rise, or of
    19  reducing the impact of the  operation  of  such  structures  on  climate
    20  change,  including,  but not limited to, improvements that reduce energy
    21  consumption or promote the efficient use of natural resources.
    22    § 6. Section 400 of the private housing finance law is amended to read
    23  as follows:
    24    § 400. Policy and purposes of article.  It  is  hereby  declared  that
    25  there  exists  in  municipalities  in  this state a seriously inadequate
    26  supply of safe and sanitary  dwelling  accommodations  for  persons  and
    27  families  of low income; that such shortage constitutes an emergency and
    28  a grave menace to the health, safety, morals,  welfare  and  comfort  of
    29  citizens of this state; that there exists in such municipalities a large
    30  number  of multiple dwellings which are inadequate, unsafe or insanitary
    31  by reason of the absence of proper heating facilities or  by  reason  of
    32  the  necessity  for elimination of conditions dangerous to human life or
    33  detrimental to health, including  nuisances  as  defined[,]  in  section
    34  three  hundred nine of the multiple dwelling law, or for other rehabili-
    35  tation or improvement and which can be made adequate, safe and sanitary,
    36  by the installation of proper heating facilities or by  other  rehabili-
    37  tation, preservation or improvement or by the elimination of such condi-
    38  tions;  that such installation, rehabilitation, preservation or improve-
    39  ment cannot readily be provided by the  ordinary  unaided  operation  of
    40  private  enterprise  for  occupancy by persons or families of low income
    41  without public aid in the form of low interest loans or grants to owners
    42  of such multiple dwellings for the purpose of such  installation,  reha-
    43  bilitation, preservation or improvement; that the installation of proper
    44  heating  facilities  in such multiple dwellings or other rehabilitation,
    45  preservation or improvement thereof for  occupancy  by  persons  of  low
    46  income  as  defined in this article is a public use and a public purpose
    47  for which public money may be loaned or granted;  that  such  conditions
    48  require  the  provisions  hereinafter  enacted; and the necessity in the
    49  public  interest  for  the  provisions  hereinafter  enacted  is  hereby
    50  declared as a matter of legislative determination.
    51    §  7. Subdivision 3 of section 401 of the private housing finance law,
    52  paragraph a as amended by chapter 44 of the laws of 1976, and  paragraph
    53  b  as  amended by chapter 904 of the laws of 1962, is amended to read as
    54  follows:
    55    3. a. The term "persons or families of low income" shall mean "persons
    56  of low income" or "families of low income" as defined in section two  of

        A. 3669--A                          5
 
     1  this  chapter[, whose probable aggregate annual income during the period
     2  of occupancy does not exceed six times the rental (including  the  value
     3  or  cost  to  them  of  heat, light, water and cooking fuel) of dwelling
     4  units  occupied  by such persons or families in existing multiple dwell-
     5  ings aided by a loan pursuant to this article, except that in  the  case
     6  of  persons  or families with three or more dependents, such ratio shall
     7  not exceed seven to one, and except further that the income  limitations
     8  prescribed  by  this  paragraph  shall  be  subject to the provisions of
     9  subdivision two of section four hundred three of this article.
    10    In calculating annual income,  social  security  payments  and  income
    11  received from private pension funds by any person sixty-two years of age
    12  or  more  shall be excluded up to a total maximum amount of seventy-five
    13  dollars per month. The term "probable aggregate annual income" means the
    14  annual income of the chief wage earner of the  family,  plus  all  other
    15  income  of other members of the family over the age of twenty-one years,
    16  plus a proportion of income of gainfully employed members under the  age
    17  of  twenty-one years, the proportion to be determined by the agency. The
    18  agency may exclude a proportion of the income of other  members  of  the
    19  family  over  the age of twenty-one years for the purpose of determining
    20  eligibility for commencement of occupancy or continued occupancy, or for
    21  establishing rental of such family, or for all such purposes].
    22    b. Notwithstanding the provisions of paragraph a of this  subdivision,
    23  [and  subject  to  the  provisions  of subdivision three of section four
    24  hundred three of this article] the term  "persons  or  families  of  low
    25  income"  shall  also mean any person or family who, immediately prior to
    26  the date on which a contract for a loan  with  respect  to  an  existing
    27  multiple  dwelling  is  entered  into pursuant to the provisions of this
    28  article, occupies any dwelling unit in such multiple  dwelling  and  who
    29  continuously  occupies  such unit during and after completion of central
    30  heating or other rehabilitation or  improvement  performed  pursuant  to
    31  such  contract  provided, however, that any person or family required to
    32  remove from any such dwelling unit because of such  installation,  reha-
    33  bilitation  or  improvement  shall,  for the purpose of this section, be
    34  deemed to have continuously occupied such unit and shall have preference
    35  in re-entering such multiple dwelling upon completion of  the  aforesaid
    36  work.
    37    §  8. Subdivision 6 of section 401 of the private housing finance law,
    38  as added by chapter 505 of the laws of  1973,  is  amended  to  read  as
    39  follows:
    40    6.  The  term  "owner" shall mean a person having record or beneficial
    41  title in fee simple to real property or the lessee thereof under a lease
    42  having an unexpired term of at least thirty years.
    43    § 9. Subdivision 1 of section 402 of the private housing finance  law,
    44  as  amended  by  chapter  808  of the laws of 1971, is amended and a new
    45  subdivision 1-a is added to read as follows:
    46    1. Notwithstanding the provisions of any  general,  special  or  local
    47  law,  a  municipality,  by  such  officer or agency as determined by its
    48  local legislative body, is hereby authorized:
    49    (a) to make or contract to make loans to the owners of existing multi-
    50  ple dwellings within its territorial limits, subject to the  limitations
    51  in  subdivision  two of this section, in such amounts as may be required
    52  for the installation of proper heating facilities, the incorporation  of
    53  climate  resiliency  improvements or elimination of conditions dangerous
    54  to human life or detrimental to health, including nuisances  as  defined
    55  in  section  three  hundred  nine of the multiple dwelling law, or other
    56  rehabilitation, preservation or improvement of such multiple  dwellings,

        A. 3669--A                          6
 
     1  and  if  such  owner  acquires the multiple dwelling for the purposes of
     2  such rehabilitation, preservation or improvement or  owns  the  multiple
     3  dwelling  subject to an outstanding indebtedness, such loans may be made
     4  exclusively  for  or may include such amounts as may be required for the
     5  cost of such acquisition or for  the  refinancing  of  such  outstanding
     6  indebtedness, and may make temporary loans or advances to such owners in
     7  anticipation of the permanent municipal loans for such purposes[.]; and
     8    (b) to make or contract to make grants to any owner described in para-
     9  graph (a) of this subdivision, on the same terms as permitted under such
    10  paragraph for a loan.
    11    1-a.  As used in this article, the term "loan" shall include any grant
    12  made by a municipality pursuant to this section, provided, however, that
    13  any  provision  of  this article concerning the repayment or forgiveness
    14  of, or security for, a loan shall not apply to any grant  made  pursuant
    15  to this article.
    16    §  10.  Subdivisions  2-a,  2-b, and 2-c of section 402 of the private
    17  housing finance law, subdivision 2-a as added by chapter 213 of the laws
    18  of 1975, subdivision 2-b as amended by chapter 362 of the laws of  2000,
    19  and  subdivision  2-c as amended by chapter 101 of the laws of 1994, are
    20  amended to read as follows:
    21    2-a. [As used in this section the term "value" shall mean the "as  is"
    22  value  of  the  multiple dwelling and the land upon which it is situated
    23  prior  to  such  installation,  elimination,  other  rehabilitation   or
    24  improvement  referred  to  in  subdivision  one of this section plus the
    25  total of all costs of such installation, elimination, rehabilitation  or
    26  improvement  including,  but  not  limited  to,  the costs of any or all
    27  undertakings necessary for the planning, financing,  tenant  relocation,
    28  acquisition, construction, equipment and development in connection ther-
    29  ewith.
    30    2-b.]  (a) Each permanent loan shall be secured by a bond and mortgage
    31  or note and mortgage upon the multiple dwelling, or any portion of  such
    32  multiple  dwelling,  and  the land upon which it is situated[; where the
    33  loan is made to an owner who is a lessee, such loan shall be secured  by
    34  a first lien on such property].
    35    (b)  [The  amount  of  any  such loan shall not exceed the cost of the
    36  installation of proper heating facilities, or elimination of  conditions
    37  dangerous to human life or detrimental to health, including nuisances as
    38  defined  in  section three hundred nine of the multiple dwelling law, or
    39  other rehabilitation or improvement provided that,  if  any  portion  of
    40  such loan is used for the cost of acquisition of the land and the multi-
    41  ple  dwelling  or  for re-financing, the total amount of such loan shall
    42  not exceed two times the cost of such installation, elimination of  such
    43  conditions, rehabilitation or improvement.
    44    (c) The amount of any such loan, together with the amount of all prior
    45  liens  and  encumbrances, shall not exceed, except in the case of a loan
    46  made to a non-profit company, a mutual company, or a housing development
    47  fund company, ninety per centum of the  value  of  the  property,  after
    48  completion  of  the installation of proper heating facilities, or elimi-
    49  nation of such conditions or other  rehabilitation  or  improvement,  as
    50  estimated by the agency, unless the agency makes a written determination
    51  that  the  owner has insufficient resources to pay for the remaining ten
    52  per centum of the value  of  the  property,  after  completion  of  such
    53  installation,  elimination,  or  other rehabilitation or improvement, as
    54  estimated by the agency, in which case such loan shall not exceed  nine-
    55  ty-five per centum of the value of the property, after completion of the
    56  installation of proper heating facilities, or elimination of such condi-

        A. 3669--A                          7

     1  tions  or other rehabilitation or improvement, as estimated by the agen-
     2  cy. The amount of any such loan, together with the amount of  all  prior
     3  liens  and encumbrances, made to a non-profit company, a mutual company,
     4  or  a housing development fund company shall not exceed the value of the
     5  property after completion of such installation,  elimination,  or  other
     6  rehabilitation  or improvement, as estimated by the agency provided that
     7  when after completion of such installation, elimination or  other  reha-
     8  bilitation  or improvement, such project is, or is to be operated exclu-
     9  sively for the benefit of persons or families who are entitled to  occu-
    10  pancy by reason of ownership of stock in the corporate owners, such loan
    11  shall  not  exceed  ninety-eight percentum of the value of the property,
    12  after completion of such installation, elimination, or  other  rehabili-
    13  tation  or  improvement,  as  estimated by the agency, unless the agency
    14  makes a written determination that the owner has insufficient  resources
    15  to  pay  for  the remaining two per centum of the value of the property,
    16  after completion of such installation, elimination, or  other  rehabili-
    17  tation  or  improvement,  as estimated by the agency, in which case such
    18  loan shall not exceed the value of the  property,  after  completion  of
    19  such  installation, elimination, or other rehabilitation or improvement,
    20  as estimated by the agency.
    21    (d)] Each such bond and mortgage or note and mortgage shall be  repaid
    22  over  or  within  a  period of [thirty] thirty-five years, provided that
    23  such period may be extended  and  shall  be  repaid  within  thirty-five
    24  years,  in  such  manner as may be provided in such bond and mortgage or
    25  note and mortgage and contract [but in no case to  exceed  the  probable
    26  life  of  the  multiple dwelling which is hereby determined to be thirty
    27  years]. Such bond and mortgage or note and mortgage and the contract  in
    28  connection  with  such  permanent  and  temporary loans may contain such
    29  other terms and provisions not inconsistent with the provisions of  this
    30  article  as  the local legislative body or the agency may deem necessary
    31  or desirable to secure repayment of the loan, the interest  thereon  and
    32  other  charges in connection therewith and to carry out the purposes and
    33  provisions of this article[; notwithstanding the foregoing, a loan  made
    34  prior  to  January  first,  nineteen  hundred  seventy-eight may, in the
    35  discretion of the agency, be extended to a term up to forty-five  years.
    36  The  agency  may  modify the rate and time of payment of interest on the
    37  original loan and the rate and time of amortization of principal in such
    38  manner as required to secure payment of the  loan  within  the  extended
    39  term].
    40    [2-c.] 2-b. If a loan pursuant to this article is made to a non-profit
    41  company  or  a  housing development fund company which agrees to provide
    42  housing accommodations exclusively  for  persons  and  families  of  low
    43  income,  at least thirty percent of whom are referred to it by the muni-
    44  cipality and have prior to their  initial  occupancy  in  such  accommo-
    45  dations resided in emergency shelter facilities operated by or on behalf
    46  of  the  municipality, the agency may provide that the note and mortgage
    47  shall automatically be reduced to zero in five equal  annual  decrements
    48  commencing  on the tenth year after the initial occupancy date, provided
    49  that such accommodations have  been  owned  and  operated  in  a  manner
    50  consistent  with  an  agreement  with the municipality contained in such
    51  note and mortgage to provide housing for such persons.
    52    § 11. Subdivisions 2, 3, 4 and 5 of section 403 of the private housing
    53  finance law, subdivision 2, paragraphs a, b and c of subdivision  3  and
    54  subdivision 4 as amended by chapter 904 of the laws of 1962, are amended
    55  to read as follows:

        A. 3669--A                          8
 
     1    2.  [In  the event that after any person or family included within the
     2  provisions of paragraph a of subdivision three of section  four  hundred
     3  one of this article, but not included within the provisions of paragraph
     4  b  of  such  subdivision three, begins occupancy of any dwelling unit in
     5  any  multiple  dwelling  aided  by  a loan pursuant to this article, and
     6  during the period while such dwelling unit is subject to a maximum  rent
     7  prescribed pursuant to this article, the income of such person or family
     8  increases  so  as  to  exceed  the applicable maximum prescribed by such
     9  paragraph a by more than fifty per centum, such person shall be  subject
    10  to removal from such dwelling with the approval of the agency.
    11    3.  a. In the event that on the date on which a contract for a loan is
    12  made with respect to a multiple dwelling aided by  a  loan  pursuant  to
    13  this  article,  any  person  or family occupying a dwelling unit in such
    14  multiple dwelling and included within the provisions of paragraph  b  of
    15  subdivision  three  of  section  four hundred one of this article, has a
    16  probable aggregate annual income, as determined in accordance  with  the
    17  provisions  of  paragraph a of such subdivision three, which exceeds the
    18  income limits specified in such paragraph a by more than fifty per cent,
    19  such person or family shall be subject to  removal  from  such  dwelling
    20  unit  with the approval of the agency upon the expiration of a period of
    21  two years after the date on which such contract is entered into.
    22    b. In the event that at any time within a period of  two  years  after
    23  any  such  contract  is  entered  into, the income of any such person or
    24  family increases so as to exceed the income  limits  specified  in  such
    25  paragraph  a by more than fifty per cent, such person or family shall be
    26  subject to removal from such dwelling unit  with  the  approval  of  the
    27  agency upon the expiration of such period of two years.
    28    c.  If,  at  any  time subsequent to the expiration of a period of two
    29  years after any such contract is entered into,  and  during  the  period
    30  while the dwelling unit occupied by any such person or family is subject
    31  to  a  maximum  rent  prescribed pursuant to this article, the income of
    32  such person or family increases so as to exceed the income limits speci-
    33  fied in such paragraph a by more than fifty per  cent,  such  person  or
    34  family  shall  be  subject  to  removal from such dwelling unit with the
    35  approval of the agency.
    36    4.] Any person or family in occupancy[, whether  included  within  the
    37  provisions of paragraph a or paragraph b of subdivision three of section
    38  four  hundred  one  of  this  article,  whose income exceeds the maximum
    39  prescribed by the provisions of such paragraph a  with  respect  to  the
    40  time of beginning of occupancy, shall] whose income precludes the inclu-
    41  sion  of  such  person or family within the definition provided in para-
    42  graph a of subdivision three of section four hundred one of this article
    43  may be required to pay a rental surcharge in accordance with a  schedule
    44  of  surcharges  to be promulgated by the agency.  In determining imposi-
    45  tion of any such surcharge, the agency shall consider  factors  such  as
    46  the net operating income and debt service coverage ratio of the property
    47  aided  by  a  loan pursuant to this article. Rental surcharges collected
    48  pursuant to this section shall be paid by the owner to the  municipality
    49  which  has granted such owner tax exemption or tax abatement pursuant to
    50  any law authorizing the granting of same, as reimbursement to such muni-
    51  cipality therefor. In the event that such tax exemption and  tax  abate-
    52  ment  have  not  been  granted,  or in the event that a sum equal to the
    53  total amount of tax exemption and tax abatement granted to the owner has
    54  been paid to the municipality, the excess, if any, of  surcharges  shall
    55  be paid to the municipality in reduction of the loan.

        A. 3669--A                          9
 
     1    [5. Any person or family whose removal is required by any provision of
     2  this article shall be subject to removal by summary proceedings.]
     3    §  12.  The  opening  paragraph of subdivision 1 of section 404 of the
     4  private housing finance law, as added by chapter  904  of  the  laws  of
     5  1962, is amended to read as follows:
     6    No  such loan shall be made by a municipality to an owner of an exist-
     7  ing multiple dwelling unless the owner of such  multiple  dwelling  [and
     8  all  persons  holding  a  lien  prior to that of the municipality] shall
     9  covenant in writing that so long  as  any  part  of  such  loan  remains
    10  unpaid,  any  exemption  and  abatement  from  taxation  on the property
    11  resulting from the installations, alterations or improvements made  with
    12  such  loan  remains in effect or for a period of at least ten years from
    13  the occupancy date, whichever is the later:
    14    § 13. Section 450 of the private housing finance law,  as  amended  by
    15  chapter 273 of the laws of 1975, is amended to read as follows:
    16    §  450.  Policy  and purposes of article.   It is hereby declared that
    17  there exists in municipalities in  this  state  a  seriously  inadequate
    18  supply  of safe and sanitary dwelling accommodations; that such shortage
    19  constitutes an emergency and a  grave  menace  to  the  health,  safety,
    20  morals,  welfare  and  comfort  of citizens of this state; that existing
    21  conditions of deterioration of housing marked by noncompliance with  the
    22  multiple dwelling law or local housing codes threaten a further decrease
    23  in  such  supply;  that  rehabilitation  and improvement of dwellings to
    24  prolong the useful life of such dwellings may  be  necessary  to  arrest
    25  such  conditions  of  deterioration; that the elimination of such condi-
    26  tions by rehabilitation or other improvement cannot readily be  provided
    27  by  the  ordinary unaided operation of private enterprise without public
    28  aid in the form of low interest loans or grants to owners of such multi-
    29  ple dwellings; that such rehabilitation or  other  improvement  of  such
    30  dwellings  to bring them into conformance with the multiple dwelling law
    31  and local housing codes is a public use, a public  purpose  and  a  city
    32  purpose  for  which  public  money may be loaned or granted by a munici-
    33  pality and for which indebtedness may be contracted by  a  municipality;
    34  that such conditions require the provisions hereinafter enacted, and the
    35  necessity  in the public interest for the provisions hereinafter enacted
    36  is hereby declared as a matter of legislative determination.
    37    § 14. Subdivisions 2 and 3 of  section  451  of  the  private  housing
    38  finance law, subdivision 2 as amended by chapter 705 of the laws of 1976
    39  and  subdivision  3  as  amended by chapter 269 of the laws of 1985, are
    40  amended to read as follows:
    41    2. "Occupancy by persons of low income." Occupancy by [persons  paying
    42  rentals  or  carrying  charges  not  in excess of the average rentals or
    43  carrying charges  prevailing  in  local  projects  of  municipally-aided
    44  limited-profit  housing  companies aided under article two of this chap-
    45  ter, the occupancy of which commenced on or after May eighteenth,  nine-
    46  teen  hundred  seventy]  "persons  of  low  income"  or "families of low
    47  income," as such terms are defined in section two of this chapter.
    48    3. "Owner." An individual, partnership, corporation or  other  entity,
    49  including  a non-profit company, a mutual company, or a housing develop-
    50  ment fund company, which holds record or beneficial title in fee  simple
    51  to  the multiple dwelling and the real property upon which it is situate
    52  or the lessee thereof under a lease the unexpired term of which shall be
    53  not less than the term of the loan to be made under this article.
    54    § 15. Subdivision 1 of section 452 of the private housing finance law,
    55  as amended by chapter 923 of the laws of 1983,  is  amended  and  a  new
    56  subdivision 1-a is added to read as follows:

        A. 3669--A                         10
 
     1    1.  Notwithstanding  the  provisions  of any general, special or local
     2  law, a municipality is hereby authorized:
     3    (a) to make or contract to make loans to the owners of existing multi-
     4  ple  dwellings within its territorial limits, subject to the limitations
     5  in subdivision two of this section, for the elimination of any substand-
     6  ard or insanitary condition or conditions in violation of  the  multiple
     7  dwelling  law  or  local  housing code, for the incorporation of climate
     8  resiliency improvements or for such replacement  and  rehabilitation  of
     9  the  heating, plumbing, electrical and related systems or other improve-
    10  ments as shall be reasonably necessary to prolong  the  useful  life  of
    11  such  dwellings,  and  may make temporary loans to such owners in antic-
    12  ipation of the permanent municipal loans for such purposes; and
    13    (b)  to make or contract to make grants  to  any  owner  described  in
    14  paragraph  (a) of this subdivision, on the same terms as permitted under
    15  such paragraph for a loan.
    16    1-a.  As used in this article, the term "loan" shall include any grant
    17  made by a municipality pursuant to this section, provided, however, that
    18  provisions of this article concerning the repayment or  forgiveness  of,
    19  or  security  for,  a loan shall not apply to any grant made pursuant to
    20  this article.
    21    § 16. Subdivision 2 of section 452 of the private housing finance law,
    22  as amended by chapter 408 of the laws of 2009, is  amended  to  read  as
    23  follows:
    24    2. Each loan shall be evidenced by a note executed by the owner of the
    25  existing multiple dwelling. The supervising agency in its discretion may
    26  require  one or more of the shareholders of a corporate owner to co-sign
    27  such note or to otherwise guarantee or pledge security for the repayment
    28  of the loan. [The amount of any such loan shall not exceed  the  sum  of
    29  thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of
    30  eliminating  such  substandard or insanitary condition or conditions, or
    31  effecting such rehabilitation or improvement, whichever is  less.]  Each
    32  such  note  shall be repaid within a period [of the probable life of the
    33  existing multiple dwelling which  is  hereby  determined  to  be  thirty
    34  years, or such shorter period as the supervising agency shall determine]
    35  of  thirty-five  years,  provided  that  such period may be extended and
    36  shall be repaid within thirty-five years.  The repayment shall  be  made
    37  in  such manner as may be provided in such note and contract, if any, in
    38  connection with such loan and may authorize such owner, with the consent
    39  of the supervising agency, to prepay the principal of the  loan  subject
    40  to such terms and conditions as therein provided. Such note and contract
    41  may  contain  such  other terms and provisions not inconsistent with the
    42  provisions of this article as the local legislative body or  supervising
    43  agency  may deem necessary or desirable to secure repayment of the loan,
    44  the interest thereon and other charges in connection  therewith  and  to
    45  carry out the purposes and provisions of this article, including but not
    46  limited to provisions ensuring availability of rents for such repayment.
    47    §  17.  Section  453  of  the private housing finance law, as added by
    48  chapter 924 of the laws of 1970, paragraphs (c) and (d) as  amended  and
    49  paragraph  (e)  of  subdivision 1 as added by chapter 273 of the laws of
    50  1975, is amended to read as follows:
    51    § 453. Conditions precedent to making such loans.  [1.] No  such  loan
    52  shall  be  made  by  a  municipality to an owner of an existing multiple
    53  dwelling unless the owner of such multiple dwelling  shall  covenant  in
    54  writing  that  so  long as any part of such loan shall remain unpaid  or
    55  for a period of at least ten years from the date of the loan,  whichever
    56  is later:

        A. 3669--A                         11
 
     1    [(a)]  1. Each dwelling unit in such multiple dwelling shall be avail-
     2  able solely for occupancy by persons of low income;
     3    [(b)] 2. No person who lives in such multiple dwelling at the time the
     4  loan  is made shall be required to move because of the rehabilitation or
     5  improvement financed thereby, except that a temporary relocation may  be
     6  required in connection with such rehabilitation or improvement;
     7    [(c)] 3. All persons operating or managing such multiple dwelling will
     8  permit  the duly authorized officers, employees, agents or inspectors of
     9  the municipality to enter in or upon and inspect such multiple  dwelling
    10  at all reasonable hours; [and
    11    (d)]  4.  The  municipality by such duly authorized representatives as
    12  aforesaid shall have full power to investigate into and order the  owner
    13  of  such multiple dwelling to furnish such reports and information as it
    14  may require concerning such rehabilitation or improvement and shall have
    15  full power to audit the  books  of  said  owner  with  respect  to  such
    16  matters; and
    17    [(e)]  5.  The  owner will submit to the supervising agency annually a
    18  statement of the income and expenses of such multiple dwelling, in  such
    19  form as shall be approved by such agency.
    20    [2.  No  such  loan  shall be made by a municipality unless such owner
    21  executed an affidavit that he was unable to obtain  financing  for  such
    22  rehabilitation  or  improvement  because of the neighborhood, the age of
    23  the building, or other factors indicating an inability  of  the  private
    24  sector unaided to cause such rehabilitation or improvement to be made.]
    25    §  18.  The  article  heading  of  article  8-B of the private housing
    26  finance law, as added by chapter 786 of the laws of 1987, is amended  to
    27  read as follows:
    28             LOANS TO [OWNER-OCCUPANTS] OWNERS OF ONE TO FOUR UNIT
    29                       PRIVATE AND MULTIPLE DWELLINGS
    30    §  19.   Section 470 of the private housing finance law, as amended by
    31  chapter 200 of the laws of 1997, is amended to read as follows:
    32    § 470. Policy and purposes of article. It is hereby declared and found
    33  that there exists in municipalities within  the  state  substandard  and
    34  unsanitary  areas and neighborhoods containing deteriorated [owner-occu-
    35  pied] one to four unit private and  multiple  dwellings,  and  that  the
    36  rehabilitation  or  preservation of such dwellings is necessary in order
    37  to aid in the prevention and elimination of slums  and  blight  in  such
    38  areas and  neighborhoods.
    39    It  further  is found that there exists in such municipalities a seri-
    40  ously inadequate supply of safe and  sanitary  [owner-occupied]  one  to
    41  four  unit  private  and multiple dwellings, particularly for persons of
    42  low and moderate income, that existing non-compliance with local housing
    43  codes and with the multiple dwelling law and the multiple residence  law
    44  threatens  to decrease such supply, and that the rehabilitation, preser-
    45  vation and improvement of such dwellings is  necessary  to  arrest  such
    46  conditions of deterioration.
    47    It  further  is found that the elimination of such conditions by reha-
    48  bilitation or other improvements  cannot  be  readily  provided  without
    49  public  aid  in  the  form  of  low interest loans or grants to [low and
    50  moderate income owner-occupants] owners of such one to four unit  dwell-
    51  ings.
    52    The  rehabilitation, preservation or other improvements of such dwell-
    53  ings [owned and occupied by low and moderate  income  persons  or  fami-
    54  lies,]  is  hereby declared a public purpose and a municipal purpose for
    55  which public monies may be loaned or granted.

        A. 3669--A                         12
 
     1    In order, further, to promote the preservation and  rehabilitation  of
     2  such  dwellings, it is hereby declared that additional provisions should
     3  be made to provide public monies for interest  reduction  subsidies  for
     4  private loans made by private investors for such rehabilitation.
     5    The  necessity in the public interest for the provisions of this arti-
     6  cle is hereby declared as a matter of legislative determination.
     7    § 20. Subdivisions 6 and 9 of  section  471  of  the  private  housing
     8  finance  law  are  REPEALED  and  subdivisions  7, 8, 10, 11, and 12 are
     9  renumbered 6, 7, 8, 9 and 10.
    10    § 21. Subdivision 7 of section 471 of the private housing finance law,
    11  as amended by chapter 200 of the laws of  1997,  and  as  renumbered  by
    12  section twenty of this act, is amended to read as follows:
    13    7.  "Owner"  shall mean an individual or individuals, a partnership, a
    14  corporation or other entity, including but not limited to a trust, or  a
    15  joint  tenancy,  tenancy  in  common  or tenancy by the entirety holding
    16  record or beneficial title in fee  simple  to  an  existing  private  or
    17  multiple  dwelling  and  the real property upon which it is situated, or
    18  the lessee thereof under a lease having an unexpired term  of  at  least
    19  thirty  years.    "Owner"  shall be deemed to also include a cooperative
    20  corporation or a condominium association.
    21    § 22.  Section 472 of the private housing finance  law,  as  added  by
    22  chapter 786 of the laws of 1987, subdivision 1 as amended by chapter 479
    23  of the laws of 2005, subdivision 2 as amended by chapter 408 of the laws
    24  of 2009, subdivision 3 as amended by chapter 84 of the laws of 2001, and
    25  subdivision 7 as added by chapter 705 of the laws of 1991, is amended to
    26  read as follows:
    27    §  472.  Loans  to  [owner-occupants] owners. 1.   Notwithstanding the
    28  provisions of any general, special or local law, a municipality,  acting
    29  through an agency, is authorized:
    30    (a)  to  make,  or contract to make, loans to [low and moderate income
    31  owner-occupants] owners of one to four unit existing private or multiple
    32  dwellings within its territorial limits, subject to  the  limitation  of
    33  subdivisions two through seven of this section, in such amounts as shall
    34  be  required  for the rehabilitation, improvement or acquisition of such
    35  dwellings[,] provided, [however, that such loans shall not exceed  sixty
    36  thousand  dollars  per dwelling unit. Such] that any such rehabilitation
    37  or improvement may include climate resiliency improvements.  Such  loans
    38  may  also  be  made  exclusively  for  or include the refinancing of the
    39  outstanding indebtedness of such dwellings,  and  the  municipality  may
    40  make  temporary  loans  or  advances to such [owner-occupants] owners in
    41  anticipation of permanent loans for such purposes; and
    42    (b) to make or contract to make grants to any owner described in para-
    43  graph (a) of this subdivision, on the same terms as permitted under such
    44  paragraph for a loan.
    45    1-a.  As used in this article, the term "loan" shall include any grant
    46  made by a municipality pursuant to this section, provided, however, that
    47  provisions of this article concerning the repayment or  forgiveness  of,
    48  or  security  for,  a loan shall not apply to any grant made pursuant to
    49  this article.
    50    2. Each loan shall be evidenced by a note executed by the [owner-occu-
    51  pant] owner of the existing dwelling. Repayment of each such note  shall
    52  be  within a period of [the probable life of the existing dwelling which
    53  is hereby determined to be thirty years, or such shorter period  as  the
    54  agency shall determine] thirty-five years, provided that such period may
    55  be extended and shall be repaid within thirty-five years.  The repayment
    56  shall  be  made  in  such  manner  as  may  be provided in such note and

        A. 3669--A                         13
 
     1  contract, if any, in connection with such loan, and may  authorize  such
     2  [owner-occupant]  owner,  with  the consent of the agency, to prepay the
     3  principal of the loan subject to such terms and  conditions  as  therein
     4  provided.  In order to make any such loan affordable to the [owner-occu-
     5  pant] owner, the agency may provide in such note and contract  that  all
     6  of  the outstanding principal of said loan may be self-liquidated over a
     7  [fifteen year] period of [owner-occupancy] not less than  fifteen  years
     8  of  continuous  compliance  by  the owner with a regulatory agreement or
     9  other restrictive covenant with or approved by the agency and  upon  the
    10  satisfaction  of  any additional conditions specified therein. Such note
    11  and contract may contain such other terms and provisions not  inconsist-
    12  ent with the provisions of this article as the agency may deem necessary
    13  or  desirable  to secure repayment of the loan, the interest thereon, if
    14  any, and other charges in connection therewith, and  to  carry  out  the
    15  purposes and provisions of this article.
    16    3.  The agency in its discretion may require that the [owner-occupant]
    17  owner execute, acknowledge and deliver a uniform commercial code financ-
    18  ing statement for the real property improvement to be in  such  form  as
    19  the  agency  shall  specify  and  in accordance with the requirements of
    20  section 9--502 of the uniform commercial code of the state of New  York.
    21  Said  financing  statement  shall be filed or recorded without charge in
    22  accordance with the provisions of paragraph one  of  subsection  (a)  of
    23  section 9--501 of the uniform commercial code, and from the date of such
    24  filing  the  municipality  shall  have a lien against said real property
    25  improvement for the amount advanced or so much thereof as remains unpaid
    26  together with the interest thereon. Upon payment of all sums advanced by
    27  the municipality and interest thereon,  and  upon  demand  of  the  then
    28  record  owner  of  the real property, the agency shall deliver a copy of
    29  the financing statement with an endorsement thereon  that  the  lien  is
    30  satisfied.  Upon  filing  of such copy in the office where the financing
    31  statement was filed and upon payment of the  proper  fee  therefor,  the
    32  lien of such financing statement shall be discharged.
    33    4.  The  agency  may  require  the [owner-occupant] owner to execute a
    34  mortgage as security for a loan in lieu of or in addition to a financing
    35  statement as provided in subdivision three of this section.  Such  mort-
    36  gage  shall  contain such terms and provisions not inconsistent with the
    37  provisions of this article as the agency shall deem necessary or desira-
    38  ble to secure repayment of the loan.
    39    5. Loans may be made with respect to a one to  four  unit  private  or
    40  multiple  dwelling  encumbered  by mortgages, provided no mortgage is in
    41  default, except if such default shall be remedied by the proposed  reha-
    42  bilitation or improvement.
    43    6.  The  agency may charge the [owner-occupant] owner of such existing
    44  private or multiple dwelling reasonable fees for administration, financ-
    45  ing, regulation, supervision and audit.
    46    7. In making a loan under this article, an agency shall have the power
    47  to participate in a loan made by any private  investor[,  provided  that
    48  the  portion of the loan funded by the agency shall not exceed an amount
    49  equal to seventy-five percent of the total loan.] The agency  may  enter
    50  into  an  agreement  with  a private investor to deposit funds with such
    51  private investor  to  cover  the  agency's  participation  in  loans  to
    52  [owner-occupants] owners of one to four unit existing private and multi-
    53  ple  dwellings  with  such  funds  advanced  by such private investor to
    54  [owner-occupants] owners of existing dwellings. The portion of the  loan
    55  funded  by  the  agency  may  be  equal to or subordinate in lien to the
    56  portion of the loan funded by the private  investor  and  the  note  and

        A. 3669--A                         14
 
     1  contract  may  contain such terms with respect to interest rate, if any,
     2  and time of payment of principal and interest as determined by the agen-
     3  cy. The agency may make provision, either in the mortgage  or  mortgages
     4  or by separate agreement, for the performance by the private investor of
     5  such  services as are generally performed by a banking institution which
     6  itself holds a mortgage,  including,  without  limitation,  construction
     7  loan  advances,  construction  supervision,  initiation  of  foreclosure
     8  proceedings,  procurement  of  insurance,  and  all  other  matters   in
     9  connection  with the financing, supervision, regulation and audit of any
    10  such loan. In order to make the loan affordable to the  [owner-occupant]
    11  owner,  the agency may provide an interest reduction subsidy pursuant to
    12  section four hundred seventy-five of this article, or may  provide  that
    13  all  or part of the agency's portion of the outstanding principal of any
    14  such participation loan may be self-liquidated over a fifteen year peri-
    15  od of [owner-occupancy]  not  less  than  fifteen  years  of  continuous
    16  compliance by the owner with a regulatory agreement or other restrictive
    17  covenant with or approved by the agency and upon the satisfaction of any
    18  additional conditions specified therein.
    19    §  23.    Subdivisions  1  and 2 of section 473 of the private housing
    20  finance law, as added by chapter 786 of the laws of 1987, are amended to
    21  read as follows:
    22    1. No such loan shall be made  to  an  [owner-occupant]  owner  of  an
    23  existing  private or multiple dwelling unless the [owner-occupant] owner
    24  of such private or multiple dwelling shall covenant in writing  that  so
    25  long  as any part of such loan shall remain unpaid or for a period of at
    26  least ten years from the date of the loan, whichever is later:  (i)  the
    27  [owner-occupant]  owner  or  managing agent or operator of such dwelling
    28  shall permit the duly authorized officers, employees, agents or  inspec-
    29  tors  of  the  agency  to  enter  in or upon and inspect such private or
    30  multiple dwelling at all reasonable hours; (ii) the agency by such  duly
    31  authorized  representatives as aforesaid shall have full power to inves-
    32  tigate into and order the [owner-occupant] owner  of  such  dwelling  to
    33  furnish  such  reports and information as it may require concerning such
    34  rehabilitation or improvement and shall have full  power  to  audit  the
    35  books of said owner with respect to such matters; and (iii) if the prop-
    36  erty  to  be  rehabilitated is a multiple dwelling, the [owner-occupant]
    37  owner will submit to the agency  annually  a  statement  of  income  and
    38  expenses  of  such  dwelling,  in  such form as shall be approved by the
    39  agency.
    40    2. A municipality shall neither make nor participate in a loan  to  an
    41  [owner-occupant]  owner  of  an  existing  private  or multiple dwelling
    42  pursuant to this article unless the agency finds that the area in  which
    43  such  dwelling  is situated is a blighted, deteriorated or deteriorating
    44  area or has a blighting influence on the  surrounding  area,  or  is  in
    45  danger of becoming a slum or a blighted area because of the existence of
    46  substandard,  unsanitary,  deteriorating  or deteriorated conditions, an
    47  aged housing stock, or other factors  indicating  an  inability  of  the
    48  private sector to cause such rehabilitation to be made.
    49    §  24.    Subdivision  2 of section 474 of the private housing finance
    50  law, as added by chapter 786 of the laws of 1987, is amended to read  as
    51  follows:
    52    2.  The  agency  is  authorized to make provision in the note and loan
    53  agreement or by separate agreement for the servicing of such loans by  a
    54  loan  servicing  company or other qualified entity, as determined by the
    55  agency, and such services may  include,  but  not  be  limited  to,  the
    56  collection  of  the  debt  services on such loans and the establishment,

        A. 3669--A                         15
 
     1  administration, and distribution of an escrow account for the payment of
     2  the [owner-occupant's] owner's real estate taxes, sewer and water  rents
     3  and fire insurance.
     4    §  25.  Section  475  of  the private housing finance law, as added by
     5  chapter 786 of the laws of 1987, is amended to read as follows:
     6    § 475. Interest reduction subsidies. Notwithstanding the provisions of
     7  any general, special or local law, a  municipality,  acting  through  an
     8  agency,  is  authorized  to  provide,  or  contract to provide, interest
     9  reduction subsidies for loans made by  private  investors  to  [low  and
    10  moderate  income  owner-occupants]  owners  of one to four unit existing
    11  private or multiple dwellings within its  territorial  limits,  if  such
    12  [owner-occupants]  owners  would have been eligible under the provisions
    13  of this article for a loan made by the  municipality  pursuant  to  this
    14  article.
    15    §  26.  The  private  housing finance law is amended by adding two new
    16  sections 610 and 611 to read as follows:
    17    § 610. Rent stabilization and regulatory agreements. 1.  Notwithstand-
    18  ing  any  other  provision  of  law, including the provisions of, or any
    19  regulation promulgated pursuant to, the emergency tenant protection  act
    20  of  nineteen  seventy-four  or  the  rent  stabilization law of nineteen
    21  hundred sixty-nine, the state division of housing and community renewal,
    22  when supervising housing accommodations under provisions  of  law  other
    23  than the emergency tenant protection act of nineteen seventy-four or the
    24  rent stabilization law of nineteen hundred sixty-nine, the New York city
    25  department  of  housing preservation and development, the New York state
    26  urban development corporation, the New York state housing finance  agen-
    27  cy, the New York state housing trust fund, and the New York city housing
    28  development  corporation, or such other state or municipal agency, poli-
    29  tical subdivision, public benefit corporation,   or  instrumentality  as
    30  the state division of housing and community renewal shall identify, may,
    31  by  agreement  with an owner of a multiple dwelling, subject any housing
    32  accommodation  in  such  multiple  dwelling  to  the  emergency   tenant
    33  protection act of nineteen seventy-four or the rent stabilization law of
    34  nineteen hundred sixty-nine, or both, if applicable to the municipality.
    35  The  requirements  of  such  agreement shall supplement any requirements
    36  imposed on such housing accommodation pursuant to any  other  provisions
    37  of law.
    38    2. Any agreement between a state or municipal agency, political subdi-
    39  vision,  public  benefit  corporation,  or  instrumentality described in
    40  subdivision one of this section and an owner of a multiple dwelling that
    41  contains provisions that are consistent with  subdivision  one  of  this
    42  section  and  that is in effect as of the effective date of this section
    43  is and will remain valid and enforceable.
    44    § 611. Compliance monitoring. 1. Any supervising agency and any public
    45  benefit corporation created pursuant to  this  chapter  shall  have  the
    46  power  to:  (a) subpoena, require the attendance of and examine and take
    47  testimony under oath of such persons as it deems necessary  to  monitor,
    48  and  enforce  compliance  with, a note, mortgage, other financing agree-
    49  ment, regulatory agreement, deed, land disposition agreement,  or  other
    50  restrictive  covenant with or approved by such agency or corporation and
    51  entered into in connection with an action taken pursuant to  this  chap-
    52  ter,  the  general  municipal law, the real property tax law, or the New
    53  York city zoning resolution; and (b) subpoena and require the production
    54  of books, accounts, papers, documents and other evidence related to such
    55  monitoring and enforcement.

        A. 3669--A                         16
 
     1    2.  Any person who has been issued a subpoena, or any  other  require-
     2  ment  to  testify  or produce books and records, pursuant to subdivision
     3  one of this section, shall be required to comply with such  subpoena  or
     4  other  requirement within a reasonable period of time established by the
     5  supervising  agency  or  public  benefit  corporation  that  issued such
     6  subpoena. Each day in which a person fails to comply with such subpoena,
     7  or with any other such requirement  to  testify  or  produce  books  and
     8  records,  shall  constitute  a  separate  violation of this section. The
     9  civil penalty for each such violation shall be not more than two hundred
    10  fifty dollars, provided that such penalty shall not apply to any  period
    11  during  which  such  subpoena or other requirement to testify or produce
    12  books and records is  the  subject  of  a  pending  judicial  proceeding
    13  commenced  prior  to the expiration of the period of time established by
    14  such supervising agency or public  benefit  corporation  for  compliance
    15  with  such subpoena or other requirement to testify or produce books and
    16  records.
    17    3.   Any such supervising agency or  public  benefit  corporation  may
    18  promulgate  rules  and  regulations  to carry out the provisions of this
    19  section.
    20    § 27. Section 800 of the private housing finance law,  as  amended  by
    21  chapter 456 of the laws of 2003, is amended to read as follows:
    22    § 800. Policy and purposes of article. It is hereby declared and found
    23  that there exists in municipalities in this state substandard and insan-
    24  itary areas and neighborhoods characterized by undermaintained and dete-
    25  riorating  housing  accommodations  and  under-utilized  non-residential
    26  buildings and under-utilized vacant land. It is further found that there
    27  exists in such municipalities a  diminishing  and  seriously  inadequate
    28  supply  of  safe  and sanitary dwelling accommodations, particularly for
    29  persons of low income; that the loss of housing accommodations is caused
    30  by the inability of the ordinary unaided operations  of  private  enter-
    31  prise  to  make loans for rehabilitation or construction purposes or for
    32  conversion which accelerates the process of deterioration  and  abandon-
    33  ment,  turning  active  and viable neighborhoods into slums and blighted
    34  areas; and that the prevention of deterioration and loss  through  aban-
    35  donment  can only be achieved by the elimination of conditions which are
    36  unsafe or detrimental to health, the replacement of antiquated  heating,
    37  plumbing, and electrical systems and, where necessary, the overall reha-
    38  bilitation  of  certain  housing accommodations, the construction of new
    39  housing accommodations on vacant land and the conversion  of  under-uti-
    40  lized non-residential property to residential use, and that the unavail-
    41  ability  of funds for the conversion of under-utilized property to resi-
    42  dential  use,  for  the  preservation  and  rehabilitation  of   housing
    43  accommodations and for the construction of new housing accommodations on
    44  vacant land constitutes a threat to the health, safety and well-being of
    45  the  persons  who  occupy  them  and denies to others the possibility of
    46  living in safe and sanitary housing accommodations.
    47    In order to promote the preservation and rehabilitation of such  hous-
    48  ing  accommodations,  the  creation of new housing accommodations by the
    49  conversion of  under-utilized  non-residential  property  into  multiple
    50  dwellings  and  the construction of new housing accommodations on vacant
    51  land in such areas and to encourage the investment of private capital in
    52  such areas, provision should be  made  for  a  municipality  to  attract
    53  private  investment  for  such  purposes  by  utilizing funds, which are
    54  available from the federal government through specific or  discretionary
    55  grants, or are available from other financing sources, for joint partic-
    56  ipation  loans with private investors, or loans or grants by the munici-

        A. 3669--A                         17
 
     1  pality, to effect the required construction, rehabilitation  or  conver-
     2  sion.
     3    The  necessity  in  the public interest for the provisions hereinafter
     4  enacted is hereby declared as a matter of legislative determination.
     5    § 28. Subdivision 5 of section 801 of the private housing finance law,
     6  as amended by chapter 456 of the laws of 2003, is  amended  to  read  as
     7  follows:
     8    5. "Owner" shall mean an individual, partnership, corporation or other
     9  entity,  including  a non-profit company, a mutual company, or a housing
    10  development fund company, which holds record or beneficial title in  fee
    11  simple  to  the  existing  multiple  dwelling to be rehabilitated or the
    12  non-residential property to be converted into a  multiple  dwelling  and
    13  the  real property upon which it is situate or to vacant land upon which
    14  the new multiple dwelling is to be constructed, or is the lessee of  any
    15  such real property having an unexpired term of at least thirty years.
    16    §  29.  Section  801  of the private housing finance law is amended by
    17  adding a new subdivision 5-a to read as follows:
    18    5-a. "Participation loan" and the municipality's  "participation"  in,
    19  "portion"  of,  or  "investment" in a loan, or words of similar meaning,
    20  shall mean any loan or grant made by the municipality or  the  New  York
    21  city  housing  development  corporation  pursuant to this article either
    22  with or without a private investor, provided, however,  that  provisions
    23  of  this article concerning the repayment or forgiveness of, or security
    24  for, a loan shall not apply to any grant made pursuant to this article.
    25    § 30. Subdivision 6 of section 801 of the private housing finance law,
    26  as amended by chapter 456 of the laws of 2003, is  amended  to  read  as
    27  follows:
    28    6.  "Private  investor"  shall mean one or more banking organizations,
    29  foundations,  labor  unions,  credit  unions,  employers'  associations,
    30  veterans'  organizations,  colleges,  universities,  educational  insti-
    31  tutions, child care institutions,  hospitals,  medical  research  insti-
    32  tutes, insurance companies, trustees or fiduciaries, trustees of pension
    33  and  retirement  funds and systems, corporations, partnerships, individ-
    34  uals or other entities or any combination of the  foregoing,  and  shall
    35  include  the  United States of America and the state of New York and any
    36  [of its agencies acting as a lender under the loan program  pursuant  to
    37  section  three  hundred  twelve  of  the housing act of nineteen hundred
    38  sixty-four and any amendments thereto or any  similar  program]  agency,
    39  office  or  public benefit corporation thereof. As used in this subdivi-
    40  sion, the terms "trustees" and "fiduciaries" shall include any fiduciary
    41  or fiduciaries holding funds  for  investment,  and  the  term  "banking
    42  organizations"  shall  have the same meaning as in subdivision eleven of
    43  section two of the banking law.
    44    § 31. Subdivisions 1, 3 and 4 of section 802 of  the  private  housing
    45  finance  law, subdivisions 1 and 3 as amended by chapter 456 of the laws
    46  of 2003 and subdivision 4 as added by chapter 822 of the laws  of  1976,
    47  are amended to read as follows:
    48    1. (a) Notwithstanding the provisions of any general, special or local
    49  law,  one  or  more private investors and a municipality, acting through
    50  its agency, shall have the power to participate  and  invest  in  making
    51  loans  to  the owners of existing multiple dwellings or to the owners of
    52  non-residential property or to the owners of vacant land subject to  the
    53  limitations  of  subdivisions two through seven of this section, in such
    54  amounts as shall be required for (i) the rehabilitation of such existing
    55  multiple dwellings or for the conversion of such non-residential proper-
    56  ty or for the construction of a new multiple  dwelling  on  such  vacant

        A. 3669--A                         18
 
     1  land,  provided that such rehabilitation, conversion or construction may
     2  include climate resiliency improvements, and if any such owner  acquires
     3  the  existing  multiple  dwelling or the non-residential property or the
     4  vacant  land  for  the  purpose  of  such  rehabilitation, conversion or
     5  construction or owns the existing multiple dwelling or the  non-residen-
     6  tial property or the vacant land subject to an outstanding indebtedness,
     7  such  loans  may  be made exclusively for or may include such amounts as
     8  may be required for the cost of such acquisition or for the  refinancing
     9  of  such  outstanding  indebtedness,  (ii)  providing  site improvements
    10  located on the property on which such existing  multiple  dwellings  are
    11  located  or  on  such  non-residential  property  or vacant land or in a
    12  public right-of-way, including, but not  limited  to,  water  and  sewer
    13  facilities, sidewalks, landscaping, parks and open space, social, recre-
    14  ational,  communal  and other non-residential facilities and the outfit-
    15  ting thereof, the curing of problems caused by abnormal site conditions,
    16  excavation and  construction  of  footings  and  foundations  and  other
    17  improvements associated with the provision of infrastructure for housing
    18  accommodations, or (iii) providing for other costs of developing housing
    19  accommodations, and such private investors and a municipality may joint-
    20  ly participate or invest in the making of temporary loans or advances to
    21  such  owners  in  anticipation  of the permanent participation loans for
    22  such purposes.
    23    (b) Notwithstanding the provisions of any general,  special  or  local
    24  law,  and  in  addition to the power to make or contract to make partic-
    25  ipation loans granted by paragraph (a) of this subdivision, the  munici-
    26  pality,  acting through its agency, and the New York city housing devel-
    27  opment corporation shall each have the power to make or contract to make
    28  loans or grants to any owner described in paragraph (a) of this subdivi-
    29  sion without the participation of a private investor, on the same  terms
    30  as permitted under such paragraph for a participation loan.
    31    3.  [(a)]  Each  participation loan shall be secured by a bond or note
    32  and single participating mortgage or by  separate  bonds  or  notes  and
    33  mortgages  upon  any portion or all of the existing multiple dwelling or
    34  the non-residential property and the land upon which it is  situated  or
    35  in  the  case  of  the construction of a new multiple dwelling, upon any
    36  portion or all of the vacant  land  and  the  multiple  dwelling  to  be
    37  constructed,  provided that each such loan shall be made upon such terms
    38  and conditions as may be approved  by  the  agency,  including  but  not
    39  limited  to  provisions  that  [(i)]  (a)  priority  may be given to the
    40  payment of the principal of and interest on that portion of the mortgage
    41  indebtedness attributable to participation in the loan by  one  or  more
    42  private  investors,  [(ii)] (b) the interest of the municipality created
    43  as a result of making such a mortgage loan may be  subordinated  to  the
    44  interest  that  one or more of such private investors may have upon such
    45  participation, [(iii)] (c) the interest of each upon such  participation
    46  need  not  be  of  equal priority as to lien nor be equal as to interest
    47  rate, time or rate of amortization of principal or time  of  payment  of
    48  interest,  or  otherwise,  [(iv)]  (d) the bond or note and mortgage may
    49  provide that the municipality's portion of a participation loan made  to
    50  an owner shall be reduced to zero commencing in the fifteenth year after
    51  the execution of the bond or note and mortgage, provided that, as of the
    52  date  of any such reduction, such multiple dwelling has been and contin-
    53  ues to be owned and operated in a manner consistent  with  a  regulatory
    54  agreement  with  the  municipality.  Notwithstanding  such  provision as
    55  contained in the bond or note and mortgage, the  municipality's  portion
    56  of the loan shall be reduced to zero only if, prior to or simultaneously

        A. 3669--A                         19
 
     1  with delivery of such bond or note and mortgage, the agency made a writ-
     2  ten  determination  that such reduction would be necessary to ensure the
     3  continued affordability or economic viability of the multiple  dwelling.
     4  Such  written determination shall document the basis upon which the loan
     5  was determined to be eligible for evaporation.
     6    [(b) The aggregate amount of each such participation  loan  shall  not
     7  exceed  the cost of the rehabilitation, conversion or construction, plus
     8  the costs of any or all undertakings necessary for the planning, financ-
     9  ing, acquisition, satisfaction of tax liens and  other  municipal  liens
    10  and  encumbrances, construction, equipment and development in connection
    11  therewith, provided that, if any portion of such loan is  used  for  the
    12  cost  of  acquisition or for refinancing, the amount of a municipality's
    13  portion of such loan shall not exceed one and one-half times the cost of
    14  rehabilitation, conversion or construction.
    15    (c) The amount of any such loan, together with the amount of all prior
    16  liens and encumbrances, shall not exceed, except in the case of  a  loan
    17  made to a non-profit company, a mutual company, or a housing development
    18  fund company, ninety per centum of value unless the agency makes a writ-
    19  ten  determination  that the owner has insufficient resources to pay for
    20  the remaining ten per centum of value, in which case such loan shall not
    21  exceed ninety-five per centum of value. The amount  of  any  such  loan,
    22  together  with the amount of all prior liens and encumbrances, made to a
    23  non-profit company, a mutual company,  or  a  housing  development  fund
    24  company  shall  not exceed value, provided that when after completion of
    25  such rehabilitation, conversion or construction, such multiple  dwelling
    26  is,  or  is  to  be operated, exclusively for the benefit of persons and
    27  families who are entitled to occupancy by reason of ownership  of  stock
    28  in  the  corporate  owners,  such loan shall not exceed ninety-eight per
    29  centum of value unless the agency makes a written determination that the
    30  owner has insufficient resources to pay for the remaining two per centum
    31  of value, in which case such loan shall not exceed value.]
    32    4. Each such bond or note and mortgage or bonds or notes and mortgages
    33  shall be repaid over or within a period of [thirty]  thirty-five  years,
    34  provided  that  such  period  may be extended and shall be repaid within
    35  thirty-five years, in such manner as may be provided  in  such  bond  or
    36  note  and mortgage or bonds or notes and mortgages [but in no case shall
    37  the term of such loan exceed the probable life of the multiple  dwelling
    38  which  is  hereby  determined to be thirty years]. Such bond or note and
    39  mortgage or bonds or notes and mortgages and any contract in  connection
    40  with such permanent and temporary loans may contain such other terms and
    41  provisions  not  inconsistent with the provisions of this article as the
    42  local legislative body or the agency may deem necessary or desirable  to
    43  secure  repayment of the loan, the interest thereon and other charges in
    44  connection therewith and to carry out the  purposes  and  provisions  of
    45  this article.
    46    §  32.  Subdivisions 2, 3 and 6 of section 1151 of the private housing
    47  finance law, subdivision 2 as amended by chapter 567 of the laws of 1993
    48  and subdivisions 3 and 6 as added by chapter 639 of the  laws  of  1989,
    49  are amended to read as follows:
    50    2.  "Eligible  project" shall mean a project intended to construct new
    51  housing accommodations on  an  eligible  site  by  new  construction  or
    52  substantial  rehabilitation,  provided  that  such  new  construction or
    53  substantial rehabilitation may include climate resiliency  improvements.
    54  An  eligible  project  shall  serve  the needs of persons of low income,
    55  including privately-owned one to four family dwellings, condominiums and
    56  cooperatives, and rental projects.

        A. 3669--A                         20
 
     1    3. ["Development costs" shall mean the reasonable and necessary  costs
     2  for   planning,   financing,   acquisition  of  land  or  buildings  and
     3  construction of new buildings  or  the  reconstruction,  rehabilitation,
     4  repair  or  remodeling  of existing buildings and the costs of necessary
     5  site  improvements]  "Participation loan" and the city's "participation"
     6  in, "portion" of, or "investment" in a loan, or words of  similar  mean-
     7  ing,  shall  mean  any loan or grant made by the agency pursuant to this
     8  article either with or without a private lender, provided, however, that
     9  provisions of this article concerning the repayment or  forgiveness  of,
    10  or security for, a loan shall not apply to any grant.
    11    6.  "Loan" shall mean a [first] mortgage loan made by a private lender
    12  in participation with the city of New York to a sponsor for the  purpose
    13  of  construction  of  an  eligible project including a loan in which the
    14  portion of the loan funded by the agency is represented  by  a  separate
    15  note and mortgage.
    16    §  33.    Section 1152 of the private housing finance law, as added by
    17  chapter 639 of the laws of 1989, subdivision 4 as amended  and  subdivi-
    18  sion  13  as added by chapter 241 of the laws of 1998, subdivision 12 as
    19  added by chapter 400 of the laws of 1994, and paragraph e of subdivision
    20  12 as amended by chapter 118 of the laws of 2003, is amended to read  as
    21  follows:
    22    §  1152.  Affordable housing development loans. 1. (a) Notwithstanding
    23  the provisions of any general, special or local law, one or more private
    24  lenders and the city of New York, acting through the agency  shall  have
    25  the  power to participate and invest in making loans to sponsors for the
    26  construction of eligible projects. Such loans may  be  made  exclusively
    27  for  or may include such amounts as may be required for site acquisition
    28  or the refinancing of eligible projects. Each  such  participation  loan
    29  shall  be secured by a bond or note and single participating mortgage or
    30  by separate bonds or notes and mortgages upon all or any portion of  the
    31  eligible  project.  Such  bond or note and mortgage or bonds or notes or
    32  mortgages may contain such other terms and provisions  not  inconsistent
    33  with  the provisions of this article as the agency may deem necessary or
    34  desirable.
    35    (b)  Notwithstanding the provisions of any general, special  or  local
    36  law,  and  in  addition to the power to make or contract to make partic-
    37  ipation loans granted by paragraph (a) of this subdivision, the city  of
    38  New  York,  acting  through  the agency, shall have the power to make or
    39  contract to make loans or grants to any owner described in paragraph (a)
    40  of this subdivision without the participation of a  private  lender,  on
    41  the  same  terms  as  permitted under such paragraph for a participation
    42  loan.
    43    2. [The portion of such loan funded by the agency shall not exceed  an
    44  amount equal to sixty percent of the actual total development cost of an
    45  eligible project.] The agency may enter into an agreement with a private
    46  lender  to  deposit  its  share  of a loan with the private lender to be
    47  advanced by the private lender. The portion of the loan  funded  by  the
    48  agency may be equal to or subordinate in lien to the portion of the loan
    49  funded  by the private lender and may contain such terms with respect to
    50  interest rate, if any, rate of amortization of principal,  if  any,  and
    51  time  of  payment of interest and principal as determined by the agency.
    52  The agency may make provision either in the mortgage or mortgages or  by
    53  separate  agreement  for  the  performance by the private lender of such
    54  services as are generally  performed  by  a  banking  institution  which
    55  itself  holds  a  mortgage,  including, without limitation, construction
    56  loan  advances,  construction  supervision,  initiation  of  foreclosure

        A. 3669--A                         21
 
     1  proceedings,   procurement  of  insurance,  and  all  other  matters  in
     2  connection with the financing, supervision, regulation and audit of  any
     3  such loan to any such eligible project.
     4    3.  [If  a portion of the loan is to be utilized for acquisition of an
     5  eligible site such portion shall in no event exceed fifteen  percent  of
     6  the total amount of such loan or the appraised value of the site, which-
     7  ever is the lesser.
     8    4.] If the eligible project is to consist of one to four unit dwelling
     9  accommodations  or  cooperative or condominium units, the agency's share
    10  of the loan may be converted after completion of construction into mort-
    11  gages on such dwelling accommodations or condominium units or  financing
    12  statements  filed with respect to such cooperative shares, provided such
    13  units or such cooperative shares are purchased by persons of  [eligible]
    14  low  income.  Such  mortgages  and  any blanket mortgage that the agency
    15  retains on any portion of, or  on  all  of,  the  eligible  project  may
    16  provide  that [they] such mortgages and such blanket mortgage will auto-
    17  matically be reduced to zero over a period of continuous [owner-occupan-
    18  cy of the housing accommodations assisted by such  loan]  compliance  by
    19  the  mortgagee with a regulatory agreement or other restrictive covenant
    20  with or approved by the agency and upon the satisfaction  of  any  addi-
    21  tional  conditions specified therein.  Notwithstanding such provision as
    22  contained in such mortgage, the loan shall be reduced to zero  only  if,
    23  prior  to  or  simultaneously with delivery of such mortgage, the agency
    24  made a written determination that such reduction would be  necessary  to
    25  ensure the continued affordability or economic viability of the eligible
    26  project.  Such written determination shall document the basis upon which
    27  the loan was determined to be eligible for evaporation. Such  period  of
    28  continuous  [owner-occupancy]  compliance with such regulatory agreement
    29  or other restrictive covenant shall not be less than fifteen years.
    30    [5.] 4. If the eligible project is to consist  of  one  to  four  unit
    31  dwelling  accommodations or cooperative or condominium units, the agency
    32  shall require that the dwelling units  be  offered  only  to  bona  fide
    33  purchasers who intend to occupy a unit as their principal place of resi-
    34  dence;  provided, however, that in the case of two to four unit dwelling
    35  accommodations the bona fide purchaser may occupy only a single unit  as
    36  a  principal  place  of residence. If the purchaser ceases to occupy the
    37  unit as a principal place of  residence,  the  agency  may  provide  for
    38  recapture of all or a portion of the agency's share of the loan.
    39    [6.]  5.  If  the  eligible  project is a rental project, the agency's
    40  share of the loan may be converted after completion of construction into
    41  a [non-interest bearing, non-amortizing thirty year loan] permanent loan
    42  with a term of thirty-five years,  provided  that  such  period  may  be
    43  extended  and  shall be repaid within thirty-five years, payable [at the
    44  end of its term, provided that such loan shall be also  payable  out  of
    45  profits  upon any sale or refinancing of the project prior to the end of
    46  such thirty year period] in such manner as may be provided in  the  note
    47  and  any  mortgage  in connection with such loan. Such note and mortgage
    48  may contain such terms and conditions as the agency may  deem  necessary
    49  or  desirable to effectuate the purposes and provisions of this article.
    50  The sponsor or any subsequent owner or owners of such  a  project  shall
    51  agree  to  rent  such units only to persons of [eligible] low income for
    52  such [thirty year] period [and shall agree that all] as the  agency  may
    53  determine.  All  such  units  shall  be  subject to the emergency tenant
    54  protection act of nineteen seventy-four and the rent  stabilization  law
    55  of nineteen hundred sixty-nine, as amended [for a period of thirty years
    56  after initial occupancy], unless converted to a cooperative or condomin-

        A. 3669--A                         22
 
     1  ium  pursuant  to subdivision [eight] seven of this section. [At the end
     2  of such period each unit shall continue to be subject to such law there-
     3  after until the first vacancy occurs at which time  the  unit  shall  be
     4  decontrolled.]  Initial rentals for all rental units shall be set by the
     5  agency.
     6    [7.] 6. If the eligible project is a  rental  project  annual  profits
     7  shall  be limited to an amount set by the agency for as long as the loan
     8  is outstanding. Excess  profits  shall  be  used  to  establish  project
     9  reserves, provide capital improvements or reduce the principal amount of
    10  the agency's loan, as determined by the agency.
    11    [8.]  7. If the eligible project is a rental project, no conversion to
    12  a cooperative or condominium shall be permitted for a period  of  twenty
    13  years  after initial occupancy, and unless (i) the agency's share of the
    14  loan is prepaid upon such conversion, (ii) the conversion shall be  done
    15  pursuant to section three hundred fifty-two-eeee of the general business
    16  law  as  a  non-eviction plan, and (iii) apartments occupied by non-pur-
    17  chasing tenants continue to be subject to the rent stabilization law  of
    18  nineteen hundred sixty-nine as amended, until the occurrence of a vacan-
    19  cy.
    20    [9.]  8. A loan made pursuant to this article shall be exempt from the
    21  mortgage recording taxes imposed by article eleven of the tax law.
    22    [10.] 9. Notwithstanding the provisions of  any  general,  special  or
    23  local  law  or  charter, the agency shall have power, without soliciting
    24  competing bids, to contract with any sponsor or to make provision  in  a
    25  loan  for  the  construction  or reconstruction of any site improvements
    26  located in the public right-of-way or on the  eligible  site  which  are
    27  necessary for the development of an eligible project. Such site improve-
    28  ments  may  include,  but  shall  not be limited to, streets, sidewalks,
    29  landscaping, parks and open space, social,  recreational,  communal  and
    30  other  non-residential  facilities  and the outfitting thereof, lighting
    31  fixtures, and water and sewer lines.
    32    [11.] 10. No loan shall be made pursuant to  the  provisions  of  this
    33  article unless the agency finds that: (a) the construction of the eligi-
    34  ble  project  does not directly displace current low and moderate income
    35  residents of the eligible  site;  (b)  the  eligible  project  leverages
    36  private  and other public investment, if any, so as to reduce the amount
    37  of assistance provided pursuant to this article to  the  minimal  amount
    38  which  is  necessary  for  construction of the eligible project; (c) the
    39  eligible project will be built by a private  developer/builder  who  has
    40  agreed  to limit its profit in accordance with a formula satisfactory to
    41  the agency; (d) the eligible project will provide assistance to an  area
    42  which  is  blighted  or deteriorated or has a blighting influence on the
    43  surrounding area, or is in danger of becoming a slum or a blighted  area
    44  because of neighborhood conditions indicating an inability or unwilling-
    45  ness of the private sector to cause the type of construction for which a
    46  loan  is  to  be  provided;  and (e) the eligible project will make home
    47  ownership or rental housing affordable to persons who  cannot  presently
    48  afford  the  housing available based upon the ordinary unaided operation
    49  of private enterprise.
    50    [12.] 11. a. The agency may  make  non-interest  bearing  advances  to
    51  sponsors  to  defray  the  pre-development costs of eligible projects in
    52  accordance with the provisions of this chapter.
    53    b. No such advances shall be made unless the agency  finds  that:  (i)
    54  the sponsor proposes to finance the eligible project in whole or in part
    55  by  a  loan  granted  pursuant  to  this article or that the project, if
    56  otherwise financed, will provide housing for persons or families of  low

        A. 3669--A                         23

     1  income,  and that such project is otherwise consistent with the purposes
     2  of this article; (ii) the project site is suitable, there is a need  for
     3  the  housing  type  proposed in the area to be served and the project is
     4  feasible;  and  (iii) it is reasonable to anticipate that financing will
     5  be obtained and the agency makes a finding to that effect.
     6    c. No such advances may be made  to  a  sponsor  unless  such  sponsor
     7  enters  into an agreement with the agency which provides that such spon-
     8  sor shall be regulated with respect to  rents,  profits,  dividends  and
     9  disposition  of  its  property  or  franchise,  in  accordance  with the
    10  provisions of this article.
    11    d. An advance granted pursuant to this section shall be used  only  to
    12  defray  the  pre-development costs of eligible projects. For purposes of
    13  this subdivision, the term  pre-development  costs  shall  include,  but
    14  shall  not  be  limited to: the reasonable and necessary costs for plan-
    15  ning, site preparation, developing architectural drawings and conducting
    16  engineering and environmental studies, but shall not include acquisition
    17  of  land  or  buildings,  drainage  and  landscaping  of  vacant   land,
    18  construction of new buildings or the reconstruction or rehabilitation of
    19  existing buildings.
    20    e.  Each  such  advance  shall  be repaid in full to the agency by the
    21  sponsor. Such repayment shall be made upon receipt by the sponsor or its
    22  successor in interest of the proceeds of its  mortgage  or  construction
    23  loan  for the eligible project, unless the agency extends the period for
    24  the repayment of such advances. In no event shall the time of  repayment
    25  be  extended  to  a  date  later than the date of final advance of funds
    26  pursuant to such mortgage or  construction  loan.  Notwithstanding  this
    27  paragraph,  the  agency may reduce such advance to zero over a period of
    28  continued compliance with the agency's agreement with the sponsor pursu-
    29  ant to paragraph c of this subdivision if the agency has made a  written
    30  determination  that  such  reduction  would  be  necessary to ensure the
    31  continued affordability or economic viability of the  eligible  project.
    32  Such written determination shall document the basis upon which the agen-
    33  cy's  non-interest  bearing  advance  was determined eligible for evapo-
    34  ration.
    35    f. If the agency, in its discretion, determines at any time that mort-
    36  gage or construction financing for  the  eligible  project  may  not  be
    37  obtained,  then all advances made to the sponsor pursuant to this subdi-
    38  vision shall become immediately due and payable upon the demand  of  the
    39  agency.
    40    [13.]  12.  If  the  eligible project is a rental project, the bond or
    41  note and mortgage or bonds or notes or mortgages issued by  the  sponsor
    42  of  any eligible project to secure a participation loan may provide that
    43  the city's portion of such loan shall be reduced to zero  commencing  on
    44  the fifteenth year after the execution of such bond or note and mortgage
    45  or  bonds  or  notes  or mortgages, provided that, as of the date of any
    46  such reduction, the eligible project has been and continues to be  owned
    47  and operated in a manner consistent with a regulatory agreement with the
    48  city.  Notwithstanding  such  provision as contained in the bond or note
    49  and mortgage or bonds or notes or mortgages, the loan shall  be  reduced
    50  to  zero  only if, prior to or simultaneously with delivery of such bond
    51  or note and mortgage or bonds or notes or mortgages, the agency  made  a
    52  written  determination  that such reduction would be necessary to ensure
    53  the continued  affordability  or  economic  viability  of  the  eligible
    54  project.  Such written determination shall document the basis upon which
    55  the loan was determined to be eligible for evaporation.

        A. 3669--A                         24
 
     1    § 34. This act shall take effect immediately, provided, however,  that
     2  the  amendments to subdivision 1 of section 696-a of the general munici-
     3  pal law made by section one of this act shall be subject to the  expira-
     4  tion  and reversion of such subdivision pursuant to section 2 of chapter
     5  613  of the laws of 1996, as amended, when upon such date the provisions
     6  of section two of this act shall take effect.
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