Amd 696-a, add 696-e & 696-f, Gen Muni L; amd 11.00, Loc Fin L; amd Priv Hous Fin L, generally; amd 1802, NYC
Chart
Enacts the "housing affordability, resiliency, and energy efficiency investment act"; relates to the modernization of affordable housing financing authorities that authorize financing for the construction and rehabilitation of affordable housing.
STATE OF NEW YORK
________________________________________________________________________
6655--A
2023-2024 Regular Sessions
IN ASSEMBLY
April 25, 2023
___________
Introduced by M. of A. L. ROSENTHAL -- read once and referred to the
Committee on Housing -- 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, the
private housing finance law, and the New York city charter, in
relation to enacting the "housing affordability, resiliency, and ener-
gy efficiency investment act of 2023"
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "housing affordability, resiliency, and energy efficiency investment
3 act of 2023".
4 § 2. Paragraphs a, c and g of subdivision 1 of section 696-a of the
5 general municipal law, as amended by chapter 320 of the laws of 1999,
6 are amended to read as follows:
7 a. Notwithstanding the provisions of any general, special or local
8 law, an agency is hereby authorized to make or contract to make grants
9 or loans to the owner of any property that is part of an urban develop-
10 ment action area project for the purpose of (i) rehabilitation of an
11 existing private or multiple dwelling or construction of a new private
12 or multiple dwelling, (ii) providing site improvements, incidental or
13 appurtenant to such rehabilitation or such construction, within the
14 urban development action area in which the urban development action area
15 project is located, including, but not limited to, water and sewer
16 facilities, sidewalks, landscaping, parks and open space, social, recre-
17 ational, communal and other non-residential facilities and the outfit-
18 ting thereof, the curing of problems caused by abnormal site conditions,
19 excavation and construction of footings and foundations and other
20 improvements associated with the provision of infrastructure, or (iii)
21 providing for other costs of construction for the development of private
22 and multiple dwelling housing accommodations.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10921-02-3
A. 6655--A 2
1 c. Any loan made in accordance with this section shall be secured by a
2 note and mortgage upon the property improved, other than any such prop-
3 erty title to which is held by the municipality or, in the case of a
4 condominium, a note and mortgage upon each of the [housing accommo-
5 dations] condominium units aided by such loan, or in the case of a coop-
6 erative housing corporation, a note and mortgage upon the economic
7 interest in such corporation of each tenant-shareholder aided by such
8 loan, or upon the property improved, other than any such property title
9 to which is held by the municipality, or upon both such economic inter-
10 est or property; provided, however, that all or part of any such loan
11 may be unsecured if necessary to satisfy the requirements of any partic-
12 ipating lender, and, provided further, that the lien created by the note
13 and mortgage may be recorded in an equal or subordinate position, or
14 subsequently made equal or subordinate, to a lien recorded by any
15 participating lender against such property. Such loan shall be repaid
16 over such period as the agency shall determine.
17 g. For purposes of this [section] article, (i) the term "mortgage"
18 shall include any pledge or assignment of shares or assignment of a
19 proprietary lease in a cooperative housing corporation where such pledge
20 or assignment is intended as security for the performance of an obli-
21 gation and which imposes a lien on or affects title to such shares or
22 such proprietary lease; and (ii) the term "owner" shall mean an individ-
23 ual, partnership, corporation or other entity, including a non-profit
24 company, a mutual company, or a housing development fund company, having
25 record or beneficial title in fee simple to real property or the lessee
26 thereof under a lease having a term of at least forty-nine years.
27 § 3. Section 696-a of the general municipal law, as amended by chapter
28 465 of the laws of 1993, is amended to read as follows:
29 § 696-a. Loans. Notwithstanding the provisions of any general, special
30 or local law, an agency is hereby authorized to make or contract to make
31 grants or loans[: (i)] to the owner of any property that is part of an
32 urban development action area project for the purpose of: (i) rehabili-
33 tation of an existing private or multiple dwelling or construction of a
34 new private or multiple dwelling, (ii) [for the purpose of] providing
35 site improvements, incidental or appurtenant to such rehabilitation or
36 such construction, within the urban development action area in which the
37 urban development action area project is located, including, but not
38 limited to, water and sewer facilities, sidewalks, landscaping, parks
39 and open space, social, recreational, communal and other non-residential
40 facilities and the outfitting thereof, the curing of problems caused by
41 abnormal site conditions, excavation and construction of footings and
42 foundations and other improvements associated with the provision of
43 infrastructure, or (iii) [for the purpose of] providing for other costs
44 of construction for the development of private and multiple dwelling
45 housing accommodations. In the case of a grant made under this section
46 for the rehabilitation of an existing multiple dwelling intended to be
47 converted to a condominium or cooperative form of ownership or for the
48 development of one to four unit housing accommodations or a condominium
49 or cooperative housing corporation, such grant shall require a regulato-
50 ry agreement with the agency limiting profits. Any loan made in accord-
51 ance with this section shall be secured by a note and mortgage upon the
52 property improved, other than any such property title to which is held
53 by the municipality, or, in the case of a condominium, a note and mort-
54 gage upon each of the [housing accommodations] condominium units aided
55 by such loan, or in the case of a cooperative housing corporation, a
56 note and mortgage upon the economic interest in such corporation of each
A. 6655--A 3
1 tenant-shareholder aided by such loan, or upon the property improved,
2 other than any such property title to which is held by the municipality,
3 or upon both such economic interest or property; provided, however, that
4 all or part of any such loan may be unsecured if necessary to satisfy
5 the requirements of any participating lender. Such loan shall be repaid
6 over such period as the agency shall determine. In the case of a loan
7 for rehabilitation of an existing multiple dwelling intended to be
8 converted to a condominium or cooperative form of ownership or a loan
9 for the provision of infrastructure or for the provision of other costs
10 of construction for the development of one to four unit housing accommo-
11 dations or a condominium or cooperative housing corporation, such note
12 and mortgage may provide that the loan shall automatically be reduced to
13 zero over a period of owner-occupancy of the housing accommodations
14 assisted by such loan. In the case of a grant or loan made under this
15 section for the purpose of providing rental housing for persons of low
16 income as defined in section two of the private housing finance law,
17 such loan or grant shall require a regulatory agreement with the agency
18 limiting profits and rentals charged. In the case of a loan made under
19 this section for the purpose of providing rental housing for persons of
20 low income as defined in section two of the private housing finance law,
21 such note and mortgage may provide that the loan shall automatically be
22 reduced to zero over a period of up to thirty years of compliance by the
23 owner with a regulatory agreement with the agency limiting profits and
24 rentals charged. The repayment of any loan made in accordance with this
25 section shall be made in such manner as may be provided in such note and
26 mortgage in connection with such loan, and may authorize the owner, with
27 the consent of the agency, to prepay the principal of the loan subject
28 to such terms and conditions as therein provided. Such note and mortgage
29 may contain such other terms and conditions not inconsistent with the
30 provisions of this article as the agency may deem necessary or desirable
31 to carrying out the purposes and provisions of this article including,
32 but not limited to, provisions concerning the repayment of the loan, the
33 interest, if any, thereon, and other charges in connection therewith.
34 For purposes of this [section] article, (1) the term "mortgage" shall
35 include any pledge or assignment of shares or assignment of a proprie-
36 tary lease in a cooperative housing corporation where such pledge or
37 assignment is intended as security for the performance of an obligation
38 and which imposes a lien on or affects title to such shares or such
39 proprietary lease; and (2) the term "owner" shall mean an individual,
40 partnership, corporation or other entity, including a non-profit compa-
41 ny, a mutual company, or a housing development fund company, having
42 record or beneficial title in fee simple to real property or the lessee
43 thereof under a lease having a term of at least forty-nine years.
44 § 4. The general municipal law is amended by adding two new sections
45 696-e and 696-f to read as follows:
46 § 696-e. Charges. A municipality, or an agency, making a loan or grant
47 pursuant to this article, may require the payment of charges by an owner
48 in consideration for the financing, regulation, supervision and audit of
49 such loan, or for regulation, supervision and audit of such grant. Such
50 charges shall be paid into the treasury of the municipality requiring
51 the charges and shall be paid and deposited in the general fund of any
52 such municipality.
53 § 696-f. Servicing. An agency may make provision in a note and loan
54 agreement or by separate agreement for the performance of loan or grant
55 servicing functions, including, but not limited to, functions related to
56 lending or providing a grant for construction, as may generally be
A. 6655--A 4
1 performed by an institutional lender. Such agency may act in such capac-
2 ity or appoint or consent to the appointment of a financial institution
3 or other qualified entity, as determined by such agency, to act in such
4 capacity on behalf of such agency. Such agency may pay a reasonable and
5 customary fee to such financial institution or other qualified entity
6 appointed by such agency, or to whose appointment such agency provided
7 consent, for the performance of such loan or grant servicing functions.
8 § 5. Subdivision 41 of paragraph a of section 11.00 of the local
9 finance law, as amended by chapter 400 of the laws of 1994, is amended
10 to read as follows:
11 41. Housing. The effectuating of any of the purposes of the public
12 housing law, other than making loans to limited profit housing companies
13 pursuant to article two of the private housing finance law, and other
14 than making loans to owners of existing multiple dwellings, fifty years;
15 bonds issued by a housing authority pursuant to section forty-one of the
16 public housing law and guaranteed by a municipality pursuant to section
17 ninety-five of the public housing law, five years, in addition to the
18 foregoing period of fifty years, for the temporary financing of a
19 project prior to the permanent financing thereof; evidences of indebt-
20 edness issued to the state pursuant to paragraph c of section 20.00 of
21 this chapter, three years, in addition to the foregoing period of fifty
22 years for the temporary financing of a project prior to the permanent
23 financing thereof; loans to limited profit housing companies pursuant to
24 article two of the private housing finance law, fifty-five years; loans
25 or grants to owners of existing private or multiple dwellings, non-resi-
26 dential property, or vacant land pursuant to the provisions of article
27 eight, article eight-A, article eight-B, article eleven or article
28 fifteen of the private housing finance law, or loans for the
29 construction of multiple dwellings pursuant to article eleven of the
30 private housing finance law, or loans or grants for the pre-development
31 costs or construction of private or multiple dwellings pursuant to arti-
32 cle twenty-two of the private housing finance law, thirty years.
33 § 6. Section 2 of the private housing finance law is amended by adding
34 two new subdivisions 30 and 31 to read as follows:
35 30. "Climate resiliency improvements." Improvements for the purpose of
36 protecting land or any structures thereon from damage resulting from or
37 which may result from changes in climate, including, but not limited to,
38 extreme weather events, abnormal temperatures, and sea level rise, or of
39 reducing the impact of the operation of such structures on climate
40 change, including, but not limited to, improvements that reduce energy
41 consumption or promote the efficient use of natural resources.
42 31. "Private lender." One or more banking organizations, foundations,
43 labor unions, credit unions, employers' associations, veterans' organ-
44 izations, colleges, universities, educational institutions, child care
45 institutions, hospitals, medical research institutes, insurance compa-
46 nies, trustees or fiduciaries, trustees of pensions and retirement funds
47 and systems, corporations, partnerships, individuals or other entities
48 or any combination of the foregoing, and shall include any public bene-
49 fit corporation and the United States of America and any of its agencies
50 and departments. As used in this definition, the terms "trustees" and
51 "fiduciaries" shall include any fiduciary or fiduciaries holding funds
52 for investment and the term "banking organizations" shall have the same
53 meaning as in subdivision eleven of section two of the banking law.
54 § 7. Section 400 of the private housing finance law is amended to read
55 as follows:
A. 6655--A 5
1 § 400. Policy and purposes of article. It is hereby declared that
2 there exists in municipalities in this state a seriously inadequate
3 supply of safe and sanitary dwelling accommodations for persons and
4 families of low income; that such shortage constitutes an emergency and
5 a grave menace to the health, safety, morals, welfare and comfort of
6 citizens of this state; that there exists in such municipalities a large
7 number of multiple dwellings which are inadequate, unsafe or insanitary
8 by reason of the absence of proper heating facilities or by reason of
9 the necessity for elimination of conditions dangerous to human life or
10 detrimental to health, including nuisances as defined[,] in section
11 three hundred nine of the multiple dwelling law, or for other rehabili-
12 tation or improvement and which can be made adequate, safe and sanitary,
13 by the installation of proper heating facilities or by other rehabili-
14 tation, preservation or improvement or by the elimination of such condi-
15 tions; that such installation, rehabilitation, preservation or improve-
16 ment cannot readily be provided by the ordinary unaided operation of
17 private enterprise for occupancy by persons or families of low income
18 without public aid in the form of low interest loans or grants to owners
19 of such multiple dwellings for the purpose of such installation, reha-
20 bilitation, preservation or improvement; that the installation of proper
21 heating facilities in such multiple dwellings or other rehabilitation,
22 preservation or improvement thereof for occupancy by persons of low
23 income as defined in this article is a public use and a public purpose
24 for which public money may be loaned or granted; that such conditions
25 require the provisions hereinafter enacted; and the necessity in the
26 public interest for the provisions hereinafter enacted is hereby
27 declared as a matter of legislative determination.
28 § 8. Subdivision 3 of section 401 of the private housing finance law,
29 paragraph a as amended by chapter 44 of the laws of 1976, and paragraph
30 b as amended by chapter 904 of the laws of 1962, is amended to read as
31 follows:
32 3. a. The term "persons or families of low income" shall mean "persons
33 of low income" or "families of low income" as defined in section two of
34 this chapter[, whose probable aggregate annual income during the period
35 of occupancy does not exceed six times the rental (including the value
36 or cost to them of heat, light, water and cooking fuel) of dwelling
37 units occupied by such persons or families in existing multiple dwell-
38 ings aided by a loan pursuant to this article, except that in the case
39 of persons or families with three or more dependents, such ratio shall
40 not exceed seven to one, and except further that the income limitations
41 prescribed by this paragraph shall be subject to the provisions of
42 subdivision two of section four hundred three of this article.
43 In calculating annual income, social security payments and income
44 received from private pension funds by any person sixty-two years of age
45 or more shall be excluded up to a total maximum amount of seventy-five
46 dollars per month. The term "probable aggregate annual income" means the
47 annual income of the chief wage earner of the family, plus all other
48 income of other members of the family over the age of twenty-one years,
49 plus a proportion of income of gainfully employed members under the age
50 of twenty-one years, the proportion to be determined by the agency. The
51 agency may exclude a proportion of the income of other members of the
52 family over the age of twenty-one years for the purpose of determining
53 eligibility for commencement of occupancy or continued occupancy, or for
54 establishing rental of such family, or for all such purposes].
55 b. Notwithstanding the provisions of paragraph a of this subdivision,
56 [and subject to the provisions of subdivision three of section four
A. 6655--A 6
1 hundred three of this article] the term "persons or families of low
2 income" shall also mean any person or family who, immediately prior to
3 the date on which a contract for a loan with respect to an existing
4 multiple dwelling is entered into pursuant to the provisions of this
5 article, occupies any dwelling unit in such multiple dwelling and who
6 continuously occupies such unit during and after completion of central
7 heating or other rehabilitation or improvement performed pursuant to
8 such contract provided, however, that any person or family required to
9 remove from any such dwelling unit because of such installation, reha-
10 bilitation or improvement shall, for the purpose of this section, be
11 deemed to have continuously occupied such unit and shall have preference
12 in re-entering such multiple dwelling upon completion of the aforesaid
13 work.
14 § 9. Subdivision 6 of section 401 of the private housing finance law,
15 as added by chapter 505 of the laws of 1973, is amended to read as
16 follows:
17 6. The term "owner" shall mean a person having record or beneficial
18 title in fee simple to real property or the lessee thereof under a lease
19 having an unexpired term of at least thirty years.
20 § 10. Subdivision 1 of section 402 of the private housing finance law,
21 as amended by chapter 808 of the laws of 1971, is amended and a new
22 subdivision 1-a is added to read as follows:
23 1. Notwithstanding the provisions of any general, special or local
24 law, a municipality, by such officer or agency as determined by its
25 local legislative body, is hereby authorized:
26 (a) to make or contract to make loans to the owners of existing multi-
27 ple dwellings within its territorial limits, subject to the limitations
28 in subdivision two of this section, in such amounts as may be required
29 for the installation of proper heating facilities, the incorporation of
30 climate resiliency improvements, or elimination of conditions dangerous
31 to human life or detrimental to health, including nuisances as defined
32 in section three hundred nine of the multiple dwelling law, or other
33 rehabilitation, preservation or improvement of such multiple dwellings,
34 and if such owner acquires the multiple dwelling for the purposes of
35 such rehabilitation, preservation or improvement or owns the multiple
36 dwelling subject to an outstanding indebtedness, such loans may be made
37 exclusively for or may include such amounts as may be required for the
38 cost of such acquisition or for the refinancing of such outstanding
39 indebtedness, and may make temporary loans or advances to such owners in
40 anticipation of the permanent municipal loans for such purposes[.]; and
41 (b) to make or contract to make grants to any owner described in para-
42 graph (a) of this subdivision, on the same terms as permitted under such
43 paragraph for a loan.
44 1-a. As used in this article, the term "loan" shall include any grant
45 made by a municipality pursuant to this article, provided, however, that
46 any provision of this article concerning the repayment or forgiveness
47 of, or security for, a loan shall not apply to any grant made pursuant
48 to this article.
49 § 11. Subdivisions 2-a, 2-b, 2-c and 4 of section 402 of the private
50 housing finance law, subdivision 2-a as added by chapter 213 of the laws
51 of 1975, subdivision 2-b as amended by chapter 362 of the laws of 2000,
52 and subdivision 2-c as amended by chapter 101 of the laws of 1994, are
53 amended to read as follows:
54 2-a. [As used in this section the term "value" shall mean the "as is"
55 value of the multiple dwelling and the land upon which it is situated
56 prior to such installation, elimination, other rehabilitation or
A. 6655--A 7
1 improvement referred to in subdivision one of this section plus the
2 total of all costs of such installation, elimination, rehabilitation or
3 improvement including, but not limited to, the costs of any or all
4 undertakings necessary for the planning, financing, tenant relocation,
5 acquisition, construction, equipment and development in connection ther-
6 ewith.
7 2-b.] (a) Each permanent loan shall be secured by a bond and mortgage
8 or note and mortgage upon the multiple dwelling and the land upon which
9 it is situated, provided that where the multiple dwelling is held in the
10 condominium form of ownership, such loan shall be secured by a bond and
11 mortgage or note and mortgage upon the condominium units rehabilitated
12 or improved with such loan; where the loan is made to an owner who is a
13 lessee, such loan shall be secured by [a first lien on such property] a
14 leasehold interest in such property.
15 (b) [The amount of any such loan shall not exceed the cost of the
16 installation of proper heating facilities, or elimination of conditions
17 dangerous to human life or detrimental to health, including nuisances as
18 defined in section three hundred nine of the multiple dwelling law, or
19 other rehabilitation or improvement provided that, if any portion of
20 such loan is used for the cost of acquisition of the land and the multi-
21 ple dwelling or for re-financing, the total amount of such loan shall
22 not exceed two times the cost of such installation, elimination of such
23 conditions, rehabilitation or improvement.
24 (c) The amount of any such loan, together with the amount of all prior
25 liens and encumbrances, shall not exceed, except in the case of a loan
26 made to a non-profit company, a mutual company, or a housing development
27 fund company, ninety per centum of the value of the property, after
28 completion of the installation of proper heating facilities, or elimi-
29 nation of such conditions or other rehabilitation or improvement, as
30 estimated by the agency, unless the agency makes a written determination
31 that the owner has insufficient resources to pay for the remaining ten
32 per centum of the value of the property, after completion of such
33 installation, elimination, or other rehabilitation or improvement, as
34 estimated by the agency, in which case such loan shall not exceed nine-
35 ty-five per centum of the value of the property, after completion of the
36 installation of proper heating facilities, or elimination of such condi-
37 tions or other rehabilitation or improvement, as estimated by the agen-
38 cy. The amount of any such loan, together with the amount of all prior
39 liens and encumbrances, made to a non-profit company, a mutual company,
40 or a housing development fund company shall not exceed the value of the
41 property after completion of such installation, elimination, or other
42 rehabilitation or improvement, as estimated by the agency provided that
43 when after completion of such installation, elimination or other reha-
44 bilitation or improvement, such project is, or is to be operated exclu-
45 sively for the benefit of persons or families who are entitled to occu-
46 pancy by reason of ownership of stock in the corporate owners, such loan
47 shall not exceed ninety-eight percentum of the value of the property,
48 after completion of such installation, elimination, or other rehabili-
49 tation or improvement, as estimated by the agency, unless the agency
50 makes a written determination that the owner has insufficient resources
51 to pay for the remaining two per centum of the value of the property,
52 after completion of such installation, elimination, or other rehabili-
53 tation or improvement, as estimated by the agency, in which case such
54 loan shall not exceed the value of the property, after completion of
55 such installation, elimination, or other rehabilitation or improvement,
56 as estimated by the agency.
A. 6655--A 8
1 (d)] Each such bond and mortgage or note and mortgage shall be repaid
2 over or within a period of [thirty] forty years, provided that such
3 period may be extended as the agency may determine necessary to ensure
4 the continued affordability or economic viability of the multiple dwell-
5 ing, in such manner as may be provided in such bond and mortgage or note
6 and mortgage and contract [but in no case to exceed the probable life of
7 the multiple dwelling which is hereby determined to be thirty years].
8 Such bond and mortgage or note and mortgage and the contract in
9 connection with such permanent and temporary loans may contain such
10 other terms and provisions not inconsistent with the provisions of this
11 article as the local legislative body or the agency may deem necessary
12 or desirable to secure repayment of the loan, the interest thereon and
13 other charges in connection therewith and to carry out the purposes and
14 provisions of this article[; notwithstanding the foregoing, a loan made
15 prior to January first, nineteen hundred seventy-eight may, in the
16 discretion of the agency, be extended to a term up to forty-five years.
17 The agency may modify the rate and time of payment of interest on the
18 original loan and the rate and time of amortization of principal in such
19 manner as required to secure payment of the loan within the extended
20 term], including, but not limited to, providing that the lien created by
21 such bond and mortgage or note and mortgage, and, if applicable, any
22 regulatory agreement executed by the owner and the agency or restrictive
23 covenant approved by such agency, may be recorded in an equal or subor-
24 dinate position, or subsequently made equal or subordinate, to a lien
25 recorded by any private lender against such multiple dwelling.
26 [2-c.] 2-b. If a loan pursuant to this article is made to a non-profit
27 company or a housing development fund company which agrees to provide
28 housing accommodations exclusively for persons and families of low
29 income, at least thirty percent of whom are referred to it by the muni-
30 cipality and have prior to their initial occupancy in such accommo-
31 dations resided in emergency shelter facilities operated by or on behalf
32 of the municipality, the agency may provide that the note and mortgage
33 shall automatically be reduced to zero in five equal annual decrements
34 commencing on the tenth year after the initial occupancy date, provided
35 that such accommodations have been owned and operated in a manner
36 consistent with an agreement with the municipality contained in such
37 note and mortgage to provide housing for such persons.
38 4. The agency may [charge the] require the payment of charges by an
39 owner of such multiple dwelling [reasonable fees] in consideration for
40 the financing, regulation, supervision and audit of such loan. Such fees
41 shall be [kept by the municipality in a separate fund to be known as the
42 housing rehabilitation fund and shall be used to pay for the expenses of
43 the municipality in administering and carrying out the provisions of
44 this article] paid into the treasury of the municipality requiring the
45 charges and shall be paid and deposited in the general fund of any such
46 municipality.
47 § 12. Subdivisions 2, 3, 4 and 5 of section 403 of the private housing
48 finance law, subdivision 2, paragraphs a, b and c of subdivision 3 and
49 subdivision 4 as amended by chapter 904 of the laws of 1962, are amended
50 to read as follows:
51 2. [In the event that after any person or family included within the
52 provisions of paragraph a of subdivision three of section four hundred
53 one of this article, but not included within the provisions of paragraph
54 b of such subdivision three, begins occupancy of any dwelling unit in
55 any multiple dwelling aided by a loan pursuant to this article, and
56 during the period while such dwelling unit is subject to a maximum rent
A. 6655--A 9
1 prescribed pursuant to this article, the income of such person or family
2 increases so as to exceed the applicable maximum prescribed by such
3 paragraph a by more than fifty per centum, such person shall be subject
4 to removal from such dwelling with the approval of the agency.
5 3. a. In the event that on the date on which a contract for a loan is
6 made with respect to a multiple dwelling aided by a loan pursuant to
7 this article, any person or family occupying a dwelling unit in such
8 multiple dwelling and included within the provisions of paragraph b of
9 subdivision three of section four hundred one of this article, has a
10 probable aggregate annual income, as determined in accordance with the
11 provisions of paragraph a of such subdivision three, which exceeds the
12 income limits specified in such paragraph a by more than fifty per cent,
13 such person or family shall be subject to removal from such dwelling
14 unit with the approval of the agency upon the expiration of a period of
15 two years after the date on which such contract is entered into.
16 b. In the event that at any time within a period of two years after
17 any such contract is entered into, the income of any such person or
18 family increases so as to exceed the income limits specified in such
19 paragraph a by more than fifty per cent, such person or family shall be
20 subject to removal from such dwelling unit with the approval of the
21 agency upon the expiration of such period of two years.
22 c. If, at any time subsequent to the expiration of a period of two
23 years after any such contract is entered into, and during the period
24 while the dwelling unit occupied by any such person or family is subject
25 to a maximum rent prescribed pursuant to this article, the income of
26 such person or family increases so as to exceed the income limits speci-
27 fied in such paragraph a by more than fifty per cent, such person or
28 family shall be subject to removal from such dwelling unit with the
29 approval of the agency.
30 4.] Any person or family in occupancy[, whether included within the
31 provisions of paragraph a or paragraph b of subdivision three of section
32 four hundred one of this article, whose income exceeds the maximum
33 prescribed by the provisions of such paragraph a with respect to the
34 time of beginning of occupancy, shall] whose income precludes the inclu-
35 sion of such person or family within the definition provided in para-
36 graph a of subdivision three of section four hundred one of this article
37 may be required to pay a rental surcharge in accordance with a schedule
38 of surcharges to be promulgated by the agency. In determining imposi-
39 tion of any such surcharge, the agency shall consider factors such as
40 the net operating income and debt service coverage ratio of the property
41 aided by a loan pursuant to this article. Rental surcharges collected
42 pursuant to this section shall be paid by the owner to the municipality
43 which has granted such owner tax exemption or tax abatement pursuant to
44 any law authorizing the granting of same, as reimbursement to such muni-
45 cipality therefor. In the event that such tax exemption and tax abate-
46 ment have not been granted, or in the event that a sum equal to the
47 total amount of tax exemption and tax abatement granted to the owner has
48 been paid to the municipality, the excess, if any, of surcharges shall
49 be paid to the municipality in reduction of the loan.
50 [5. Any person or family whose removal is required by any provision of
51 this article shall be subject to removal by summary proceedings.]
52 § 13. The opening paragraph of subdivision 1 of section 404 of the
53 private housing finance law, as added by chapter 904 of the laws of
54 1962, is amended to read as follows:
55 No such loan shall be made by a municipality to an owner of an exist-
56 ing multiple dwelling unless the owner of such multiple dwelling [and
A. 6655--A 10
1 all persons holding a lien prior to that of the municipality] shall
2 covenant in writing that so long as any part of such loan remains
3 unpaid, any exemption and abatement from taxation on the property
4 resulting from the installations, alterations or improvements made with
5 such loan remains in effect or for a period of at least ten years from
6 the occupancy date, whichever is the later:
7 § 14. Section 450 of the private housing finance law, as amended by
8 chapter 273 of the laws of 1975, is amended to read as follows:
9 § 450. Policy and purposes of article. It is hereby declared that
10 there exists in municipalities in this state a seriously inadequate
11 supply of safe and sanitary dwelling accommodations; that such shortage
12 constitutes an emergency and a grave menace to the health, safety,
13 morals, welfare and comfort of citizens of this state; that existing
14 conditions of deterioration of housing marked by noncompliance with the
15 multiple dwelling law or local housing codes threaten a further decrease
16 in such supply; that rehabilitation and improvement of dwellings to
17 prolong the useful life of such dwellings may be necessary to arrest
18 such conditions of deterioration; that the elimination of such condi-
19 tions by rehabilitation or other improvement cannot readily be provided
20 by the ordinary unaided operation of private enterprise without public
21 aid in the form of low interest loans or grants to owners of such multi-
22 ple dwellings; that such rehabilitation or other improvement of such
23 dwellings to bring them into conformance with the multiple dwelling law
24 and local housing codes is a public use, a public purpose and a city
25 purpose for which public money may be loaned or granted by a munici-
26 pality and for which indebtedness may be contracted by a municipality;
27 that such conditions require the provisions hereinafter enacted, and the
28 necessity in the public interest for the provisions hereinafter enacted
29 is hereby declared as a matter of legislative determination.
30 § 15. Subdivisions 2 and 3 of section 451 of the private housing
31 finance law, subdivision 2 as amended by chapter 705 of the laws of 1976
32 and subdivision 3 as amended by chapter 269 of the laws of 1985, are
33 amended to read as follows:
34 2. "Occupancy by persons of low income." Occupancy by [persons paying
35 rentals or carrying charges not in excess of the average rentals or
36 carrying charges prevailing in local projects of municipally-aided
37 limited-profit housing companies aided under article two of this chap-
38 ter, the occupancy of which commenced on or after May eighteenth, nine-
39 teen hundred seventy] "persons of low income" or "families of low
40 income," as such terms are defined in section two of this chapter.
41 3. "Owner." An individual, partnership, corporation or other entity,
42 including a non-profit company, a mutual company, or a housing develop-
43 ment fund company, which holds record or beneficial title in fee simple
44 to the multiple dwelling and the real property upon which it is situate
45 or the lessee thereof under a lease the unexpired term of which shall be
46 not less than the term of the loan to be made under this article.
47 § 16. Subdivision 1 of section 452 of the private housing finance law,
48 as amended by chapter 923 of the laws of 1983, is amended and a new
49 subdivision 1-a is added to read as follows:
50 1. Notwithstanding the provisions of any general, special or local
51 law, a municipality is hereby authorized:
52 (a) to make or contract to make loans to the owners of existing multi-
53 ple dwellings within its territorial limits, subject to the limitations
54 in subdivision two of this section, for the elimination of any substand-
55 ard or insanitary condition or conditions in violation of the multiple
56 dwelling law or local housing code, for the incorporation of climate
A. 6655--A 11
1 resiliency improvements or for such replacement and rehabilitation of
2 the heating, plumbing, electrical and related systems or other improve-
3 ments as shall be reasonably necessary to prolong the useful life of
4 such dwellings, and may make temporary loans to such owners in antic-
5 ipation of the permanent municipal loans for such purposes; and
6 (b) to make or contract to make grants to any owner described in
7 paragraph (a) of this subdivision, on the same terms as permitted under
8 such paragraph for a loan.
9 1-a. As used in this article, the term "loan" shall include any grant
10 made by a municipality pursuant to this article, provided, however, that
11 provisions of this article concerning the repayment or forgiveness of,
12 or security for, a loan shall not apply to any grant made pursuant to
13 this article.
14 § 17. Subdivisions 2 and 5 of section 452 of the private housing
15 finance law, subdivision 2 as amended by chapter 408 of the laws of 2009
16 and subdivision 5 as amended by chapter 273 of the laws of 1975, are
17 amended to read as follows:
18 2. Each loan shall be evidenced by a note executed by the owner of the
19 existing multiple dwelling. The supervising agency in its discretion may
20 require one or more of the shareholders of a corporate owner to co-sign
21 such note or to otherwise guarantee or pledge security for the repayment
22 of the loan. [The amount of any such loan shall not exceed the sum of
23 thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of
24 eliminating such substandard or insanitary condition or conditions, or
25 effecting such rehabilitation or improvement, whichever is less.] Each
26 such note shall be repaid within a period [of the probable life of the
27 existing multiple dwelling which is hereby determined to be thirty
28 years, or such shorter period as the supervising agency shall determine]
29 of forty years, provided that such period may be extended as the super-
30 vising agency may determine necessary to ensure the continued afforda-
31 bility or economic viability of the existing multiple dwelling. The
32 repayment shall be made in such manner as may be provided in such note
33 and contract, if any, in connection with such loan and may authorize
34 such owner, with the consent of the supervising agency, to prepay the
35 principal of the loan subject to such terms and conditions as therein
36 provided. Such note and contract may contain such other terms and
37 provisions not inconsistent with the provisions of this article as the
38 local legislative body or supervising agency may deem necessary or
39 desirable to secure repayment of the loan, the interest thereon and
40 other charges in connection therewith and to carry out the purposes and
41 provisions of this article, including but not limited to provisions
42 ensuring availability of rents for such repayment and provisions permit-
43 ting the lien created by such note and mortgage, and, if applicable, a
44 regulatory agreement executed by such owner and supervising agency, be
45 recorded in an equal and subordinate position, or subsequently made
46 equal or subordinate, to a lien recorded by any private lender against
47 such multiple dwelling.
48 5. The supervising agency may [charge] require the payment of charges
49 by the owner of such existing multiple dwelling [reasonable fees] in
50 consideration for the financing, regulation, supervision and audit of
51 such loan. Such [fees] charges shall be [kept by the municipality in a
52 separate fund to be known as the article VIII-A housing rehabilitation
53 fund and shall be used to help meet the expenses of the municipality in
54 administering and carrying out the provisions of this article] paid into
55 the treasury of the municipality requiring the charges and shall be paid
56 and deposited in the general fund of any such municipality.
A. 6655--A 12
1 § 18. Section 453 of the private housing finance law, as added by
2 chapter 924 of the laws of 1970, paragraphs (c) and (d) as amended and
3 paragraph (e) of subdivision 1 as added by chapter 273 of the laws of
4 1975, is amended to read as follows:
5 § 453. Conditions precedent to making such loans. [1.] No such loan
6 shall be made by a municipality to an owner of an existing multiple
7 dwelling unless the owner of such multiple dwelling shall covenant in
8 writing that so long as any part of such loan shall remain unpaid or
9 for a period of at least ten years from the date of the loan, whichever
10 is later:
11 [(a)] 1. Each dwelling unit in such multiple dwelling shall be avail-
12 able solely for occupancy by persons of low income;
13 [(b)] 2. No person who lives in such multiple dwelling at the time the
14 loan is made shall be required to move because of the rehabilitation or
15 improvement financed thereby, except that a temporary relocation may be
16 required in connection with such rehabilitation or improvement;
17 [(c)] 3. All persons operating or managing such multiple dwelling will
18 permit the duly authorized officers, employees, agents or inspectors of
19 the municipality to enter in or upon and inspect such multiple dwelling
20 at all reasonable hours; [and
21 (d)] 4. The municipality by such duly authorized representatives as
22 aforesaid shall have full power to investigate into and order the owner
23 of such multiple dwelling to furnish such reports and information as it
24 may require concerning such rehabilitation or improvement and shall have
25 full power to audit the books of said owner with respect to such
26 matters; and
27 [(e)] 5. The owner will submit to the supervising agency annually a
28 statement of the income and expenses of such multiple dwelling, in such
29 form as shall be approved by such agency.
30 [2. No such loan shall be made by a municipality unless such owner
31 executed an affidavit that he was unable to obtain financing for such
32 rehabilitation or improvement because of the neighborhood, the age of
33 the building, or other factors indicating an inability of the private
34 sector unaided to cause such rehabilitation or improvement to be made.]
35 § 19. The article heading of article 8-B of the private housing
36 finance law, as added by chapter 786 of the laws of 1987, is amended to
37 read as follows:
38 LOANS TO [OWNER-OCCUPANTS] OWNERS OF ONE TO FOUR UNIT
39 PRIVATE AND MULTIPLE DWELLINGS
40 § 20. Section 470 of the private housing finance law, as amended by
41 chapter 200 of the laws of 1997, is amended to read as follows:
42 § 470. Policy and purposes of article. It is hereby declared and found
43 that there exists in municipalities within the state substandard and
44 unsanitary areas and neighborhoods containing deteriorated [owner-occu-
45 pied] one to four unit private and multiple dwellings, and that the
46 rehabilitation or preservation of such dwellings is necessary in order
47 to aid in the prevention and elimination of slums and blight in such
48 areas and neighborhoods.
49 It further is found that there exists in such municipalities a seri-
50 ously inadequate supply of safe and sanitary [owner-occupied] one to
51 four unit private and multiple dwellings, particularly for persons of
52 low and moderate income, that existing non-compliance with local housing
53 codes and with the multiple dwelling law and the multiple residence law
54 threatens to decrease such supply, and that the rehabilitation, preser-
55 vation and improvement of such dwellings is necessary to arrest such
56 conditions of deterioration.
A. 6655--A 13
1 It further is found that the elimination of such conditions by reha-
2 bilitation or other improvements in one to four unit private and multi-
3 ple dwellings cannot be readily provided without public aid in the form
4 of low interest loans or grants to [low and moderate income owner-occu-
5 pants] owners of such one to four unit dwellings.
6 The rehabilitation, preservation or other [improvements] improvement
7 of such private and multiple dwellings [owned and occupied by low and
8 moderate income persons or families,] is hereby declared a public
9 purpose and a municipal purpose for which public monies may be loaned or
10 granted.
11 In order, further, to promote the preservation and rehabilitation of
12 such dwellings, it is hereby declared that additional provisions should
13 be made to provide public monies for interest reduction subsidies for
14 private loans made by private investors for such rehabilitation.
15 The necessity in the public interest for the provisions of this arti-
16 cle is hereby declared as a matter of legislative determination.
17 § 21. Subdivisions 8 and 9 of section 471 of the private housing
18 finance law, as amended by chapter 200 of the laws of 1997, are amended
19 to read as follows:
20 8. "Owner" shall mean an individual or individuals, a partnership,
21 [or] a corporation or other entity, including but not limited to, a
22 trust, a joint tenancy, tenancy in common or tenancy by the entirety
23 holding record or beneficial title in fee simple to an existing private
24 or multiple dwelling and the real property upon which it is situated, or
25 the lessee thereof under a lease having an unexpired term of at least
26 thirty years. "Owner" shall be deemed to also include a cooperative
27 corporation or a condominium association.
28 9. ["Owner-occupant" shall mean an owner who occupies at least one of
29 the units in a one to four unit dwelling as his or her principal resi-
30 dence. In the case of a partnership, joint tenancy, tenancy in common or
31 tenancy by the entirety, at least one partner or tenant must be an
32 owner-occupant. In the case of a cooperative or condominium a majority
33 of the units must be owner-occupied. The term "owner-occupant" shall
34 include an owner of a vacant one to four unit dwelling who demonstrates
35 an intention to move into one of the units after the rehabilitation of
36 the property] Reserved.
37 § 22. Section 472 of the private housing finance law, as added by
38 chapter 786 of the laws of 1987, subdivision 1 as amended by chapter 479
39 of the laws of 2005, subdivision 2 as amended by chapter 408 of the laws
40 of 2009, subdivision 3 as amended by chapter 84 of the laws of 2001, and
41 subdivision 7 as added by chapter 705 of the laws of 1991, is amended to
42 read as follows:
43 § 472. Loans to [owner-occupants] owners. 1. Notwithstanding the
44 provisions of any general, special or local law, a municipality, acting
45 through an agency, is authorized:
46 (a) to make, or contract to make, loans to [low and moderate income
47 owner-occupants] owners of one to four unit existing private or multiple
48 dwellings within its territorial limits, subject to the limitation of
49 subdivisions two through seven of this section, in such amounts as shall
50 be required for the rehabilitation, improvement or acquisition of such
51 dwellings[,] provided, [however, that such loans shall not exceed sixty
52 thousand dollars per dwelling unit. Such] that any such rehabilitation
53 or improvement may include climate resiliency improvements. Such loans
54 may also be made exclusively for or include the refinancing of the
55 outstanding indebtedness of such dwellings, and the municipality may
A. 6655--A 14
1 make temporary loans or advances to such [owner-occupants] owners in
2 anticipation of permanent loans for such purposes; and
3 (b) to make or contract to make grants to any owner described in para-
4 graph (a) of this subdivision, on the same terms as permitted under such
5 paragraph for a loan.
6 1-a. As used in this article, the term "loan" shall include any grant
7 made by a municipality pursuant to this article, provided, however, that
8 provisions of this article concerning the repayment or forgiveness of,
9 or security for, a loan shall not apply to any grant made pursuant to
10 this article.
11 2. Each loan shall be evidenced by a note executed by the [owner-occu-
12 pant] owner of the existing dwelling. Repayment of each such note shall
13 be within a period of [the probable life of the existing dwelling which
14 is hereby determined to be thirty years, or such shorter period as the
15 agency shall determine] forty years, provided that such period may be
16 extended as the agency may determine necessary to ensure the continued
17 affordability or economic viability of the existing dwelling. The
18 repayment shall be made in such manner as may be provided in such note
19 and contract, if any, in connection with such loan, and may authorize
20 such [owner-occupant] owner, with the consent of the agency, to prepay
21 the principal of the loan subject to such terms and conditions as there-
22 in provided. In order to make any such loan affordable to the [owner-oc-
23 cupant] owner, the agency may provide in such note and contract that all
24 of the outstanding principal of said loan may be self-liquidated over a
25 [fifteen year] period of [owner-occupancy] not less than fifteen years
26 of continuous compliance by the owner with a regulatory agreement or
27 other restrictive covenant with or approved by the agency and upon the
28 satisfaction of any additional conditions specified therein. Such note
29 and contract may contain such other terms and provisions not inconsist-
30 ent with the provisions of this article as the agency may deem necessary
31 or desirable to secure repayment of the loan, the interest thereon, if
32 any, and other charges in connection therewith, and to carry out the
33 purposes and provisions of this article, including, but not limited to,
34 providing that the lien created by the note and mortgage, and, if appli-
35 cable, any regulatory agreement executed by such owner and agency, or
36 restrictive covenant approved by such agency, may be recorded in an
37 equal or subordinate position, or subsequently made equal or subordi-
38 nate, to a lien recorded by any private lender against such existing
39 dwelling.
40 3. The agency in its discretion may require that the [owner-occupant]
41 owner execute, acknowledge and deliver a uniform commercial code financ-
42 ing statement for the real property improvement to be in such form as
43 the agency shall specify and in accordance with the requirements of
44 section 9--502 of the uniform commercial code of the state of New York.
45 Said financing statement shall be filed or recorded without charge in
46 accordance with the provisions of paragraph one of subsection (a) of
47 section 9--501 of the uniform commercial code, and from the date of such
48 filing the municipality shall have a lien against said real property
49 improvement for the amount advanced or so much thereof as remains unpaid
50 together with the interest thereon. Upon payment of all sums advanced by
51 the municipality and interest thereon, and upon demand of the then
52 record owner of the real property, the agency shall deliver a copy of
53 the financing statement with an endorsement thereon that the lien is
54 satisfied. Upon filing of such copy in the office where the financing
55 statement was filed and upon payment of the proper fee therefor, the
56 lien of such financing statement shall be discharged.
A. 6655--A 15
1 4. The agency may require the [owner-occupant] owner to execute a
2 mortgage as security for a loan in lieu of or in addition to a financing
3 statement as provided in subdivision three of this section. Such mort-
4 gage shall contain such terms and provisions not inconsistent with the
5 provisions of this article as the agency shall deem necessary or desira-
6 ble to secure repayment of the loan.
7 5. Loans may be made with respect to a one to four unit private or
8 multiple dwelling encumbered by mortgages, provided no mortgage is in
9 default, except if such default shall be remedied by the proposed reha-
10 bilitation or improvement.
11 6. The agency may [charge] require the [owner-occupant] payment of
12 charges by the owner of such existing private or multiple dwelling
13 [reasonable fees] in consideration for [administration,] the financing,
14 regulation, supervision and audit of such loan. Such charges shall be
15 paid into the treasury of the municipality requiring the charges and
16 shall be paid and deposited in the general fund of any such munici-
17 pality.
18 7. In making a loan under this article, an agency shall have the power
19 to participate in a loan made by any private investor[, provided that
20 the portion of the loan funded by the agency shall not exceed an amount
21 equal to seventy-five percent of the total loan.] The agency may enter
22 into an agreement with a private investor to deposit funds with such
23 private investor to cover the agency's participation in loans to
24 [owner-occupants] owners of one to four unit existing private and multi-
25 ple dwellings with such funds advanced by such private investor to
26 [owner-occupants] owners of existing dwellings. The portion of the loan
27 funded by the agency may be equal to or subordinate in lien to the
28 portion of the loan funded by the private investor and the note and
29 contract may contain such terms with respect to interest rate, if any,
30 and time of payment of principal and interest as determined by the agen-
31 cy. The agency may make provision, either in the mortgage or mortgages
32 or by separate agreement, for the performance by the private investor of
33 such services as are generally performed by a banking institution which
34 itself holds a mortgage, including, without limitation, construction
35 loan advances, construction supervision, initiation of foreclosure
36 proceedings, procurement of insurance, and all other matters in
37 connection with the financing, supervision, regulation and audit of any
38 such loan. In order to make the loan affordable to the [owner-occupant]
39 owner, the agency may provide an interest reduction subsidy pursuant to
40 section four hundred seventy-five of this article, or may provide that
41 all or part of the agency's portion of the outstanding principal of any
42 such participation loan may be self-liquidated over a [fifteen year]
43 period of [owner-occupancy] not less than fifteen years of continuous
44 compliance by the owner with a regulatory agreement or other restrictive
45 covenant with or approved by the agency and upon the satisfaction of any
46 additional conditions specified therein.
47 § 23. Subdivisions 1 and 2 of section 473 of the private housing
48 finance law, as added by chapter 786 of the laws of 1987, are amended to
49 read as follows:
50 1. No such loan shall be made to an [owner-occupant] owner of an
51 existing private or multiple dwelling unless the [owner-occupant] owner
52 of such private or multiple dwelling shall covenant in writing that so
53 long as any part of such loan shall remain unpaid or any requirement
54 imposed as a condition for making such loan that survives the repayment
55 of such loan, including, but not limited to, in a regulatory agreement
56 executed by such owner and the agency or a restrictive covenant approved
A. 6655--A 16
1 by such agency, remains in effect: (i) the [owner-occupant] owner or
2 managing agent or operator of such dwelling shall permit the duly
3 authorized officers, employees, agents or inspectors of the agency to
4 enter in or upon and inspect such private or multiple dwelling at all
5 reasonable hours; (ii) the agency by such duly authorized represen-
6 tatives as aforesaid shall have full power to investigate into and order
7 the [owner-occupant] owner of such dwelling to furnish such reports and
8 information as it may require concerning such rehabilitation or improve-
9 ment and shall have full power to audit the books of said owner with
10 respect to such matters; and (iii) if the property to be rehabilitated
11 is a multiple dwelling, the [owner-occupant] owner will submit to the
12 agency annually a statement of income and expenses of such dwelling, in
13 such form as shall be approved by the agency.
14 2. A municipality shall neither make nor participate in a loan to an
15 [owner-occupant] owner of an existing private or multiple dwelling
16 pursuant to this article unless the agency finds that (i) the area in
17 which such dwelling is situated is a blighted, deteriorated or deteri-
18 orating area or has a blighting influence on the surrounding area, or is
19 in danger of becoming a slum or a blighted area because of the existence
20 of substandard, unsanitary, deteriorating or deteriorated conditions, an
21 aged housing stock, or other factors indicating an inability of the
22 private sector to cause such rehabilitation to be made; or (ii) the
23 owner of such private or multiple dwelling is a person or family of low
24 income.
25 § 24. Subdivision 2 of section 474 of the private housing finance law,
26 as added by chapter 786 of the laws of 1987, is amended to read as
27 follows:
28 2. The agency is authorized to make provision in the note and loan
29 agreement or by separate agreement for the servicing of such loans by a
30 loan servicing company or other qualified entity, as determined by the
31 agency, and such services may include, but not be limited to, the
32 collection of the debt services on such loans and the establishment,
33 administration, and distribution of an escrow account for the payment of
34 the [owner-occupant's] owner's real estate taxes, sewer and water rents
35 and fire insurance.
36 § 25. Section 475 of the private housing finance law, as added by
37 chapter 786 of the laws of 1987, is amended to read as follows:
38 § 475. Interest reduction subsidies. Notwithstanding the provisions of
39 any general, special or local law, a municipality, acting through an
40 agency, is authorized to provide, or contract to provide, interest
41 reduction subsidies for loans made by private investors to [low and
42 moderate income owner-occupants] owners of one to four unit existing
43 private or multiple dwellings within its territorial limits, if such
44 [owner-occupants] owners would have been eligible under the provisions
45 of this article for a loan made by the municipality pursuant to this
46 article.
47 § 26. Subdivision 1 of section 576-c of the private housing finance
48 law, as amended by section 1 of chapter 254 of the laws of 1998, is
49 amended to read as follows:
50 1. In addition to the powers granted to municipalities pursuant to
51 this article, a municipality, acting by its supervising agency, may make
52 loans for the purposes of acquisition, rehabilitation or construction of
53 dwelling accommodations to a non-profit housing development fund compa-
54 ny, a wholly-owned subsidiary of such company, a partnership the
55 controlling interest of which is held by such company and which has
56 agreed to limit profits or rate of return of investors in accordance
A. 6655--A 17
1 with a formula established or approved by the company, or a private
2 developer which has agreed to limit profits or rate of return of inves-
3 tors in accordance with a formula established or approved by the compa-
4 ny, which agrees to provide housing accommodations exclusively for
5 persons and families of low income, at least thirty percent of whom are
6 referred to it by a municipality and have prior to their initial occu-
7 pancy in such accommodations resided in emergency shelter facilities
8 operated by or on behalf of the municipality or who are otherwise in
9 need of emergency shelter as determined by the municipality, providing,
10 however, that in the case of a building acquired by such a company,
11 subsidiary, partnership, or developer the obligation to provide housing
12 accommodations for such persons shall be applicable only to dwelling
13 accommodations which are or become vacant after the date of acquisition.
14 Such loans may be made for such period of time and pursuant to such
15 terms and conditions as may be required by the municipality, including,
16 but not limited to, terms and conditions providing that the lien created
17 by the note and mortgage, and, if applicable, any regulatory agreement
18 executed by the owner and such municipality or restrictive covenant
19 approved by a supervising agency, may be recorded in an equal or subor-
20 dinate position, or subsequently made equal or subordinate, to a lien
21 recorded by any private lender against the dwelling aided by the loan
22 made pursuant to this article, and the supervising agency of such muni-
23 cipality may provide that the amount of the note and mortgage shall
24 automatically be reduced to zero in five equal decrements commencing on
25 the tenth year after the initial occupancy date, provided that, as of
26 the date of such reduction, such accommodations have been and continue
27 to be owned and operated in a manner consistent with an agreement with
28 the municipality contained in such note and mortgage to provide housing
29 for such persons. Notwithstanding such provision as contained in the
30 note and mortgage, the loan shall be reduced to zero only if, prior to
31 or simultaneously with delivery of such note and mortgage, the supervis-
32 ing agency made a written determination that such reduction would be
33 necessary to ensure the continued affordability or economic viability of
34 such housing project. Such written determination shall document the
35 basis upon which the loan was determined to be eligible for evaporation.
36 § 27. Section 576-c of the private housing finance law, as amended by
37 section 2 of chapter 254 of the laws of 1998, is amended to read as
38 follows:
39 § 576-c. Loans to housing development companies by a municipality. In
40 addition to the powers granted to municipalities pursuant to this arti-
41 cle, a municipality, acting by its supervising agency, may make loans
42 for the purposes of acquisition, rehabilitation or construction of
43 dwelling accommodations to a non-profit housing development fund compa-
44 ny, a wholly-owned subsidiary of such company, a partnership the
45 controlling interest of which is held by such company and which has
46 agreed to limit profits or rate of return of investors in accordance
47 with a formula established or approved by the company, or a private
48 developer which has agreed to limit profits or rate of return of inves-
49 tors in accordance with a formula established or approved by the compa-
50 ny, which agrees to provide housing accommodations exclusively for
51 persons and families of low income, at least thirty percent of whom are
52 referred to it by a municipality and have prior to their initial occu-
53 pancy in such accommodations resided in emergency shelter facilities
54 operated by or on behalf of the municipality or who are otherwise in
55 need of emergency shelter as determined by the municipality, providing,
56 however, that in the case of a building acquired by such a company,
A. 6655--A 18
1 subsidiary, partnership, or developer the obligation to provide housing
2 accommodations for such persons shall be applicable only to dwelling
3 accommodations which are or become vacant after the date of acquisition.
4 Such loans may be made for such period of time and pursuant to such
5 terms and conditions as may be required by the municipality, including,
6 but not limited to, terms and conditions providing that the lien created
7 by the note and mortgage, and, as applicable, any regulatory agreement
8 executed by the owner and such municipality, may be recorded in an equal
9 or subordinate position, or subsequently made equal or subordinate, to
10 the lien recorded by any private lender against the dwelling aided by
11 the loan made pursuant to this article, and the supervising agency of
12 such municipality may provide that the amount of the note and mortgage
13 shall automatically be reduced to zero in five equal decrements commenc-
14 ing on the tenth year after the initial occupancy date, provided that,
15 as of the date of such reduction, such accommodations have been and
16 [continues] continue to be owned and operated in a manner consistent
17 with an agreement with the municipality contained in such note and mort-
18 gage to provide housing for such persons. Notwithstanding such
19 provision as contained in the note and mortgage, the loan shall be
20 reduced to zero only if, prior to or simultaneously with delivery of
21 such note and mortgage, the supervising agency made a written determi-
22 nation that such reduction would be necessary to ensure the continued
23 affordability or economic viability of such housing project. Such writ-
24 ten determination shall document the basis upon which the loan was
25 determined to be eligible for evaporation.
26 § 28. The private housing finance law is amended by adding four new
27 sections 611, 612, 613 and 614 to read as follows:
28 § 611. Rent stabilization and regulatory agreements. 1. Notwithstand-
29 ing any other provision of law, including the provisions of, or any
30 regulation promulgated pursuant to, the emergency tenant protection act
31 of nineteen seventy-four or the rent stabilization law of nineteen
32 hundred sixty-nine, the state division of housing and community renewal,
33 when supervising housing accommodations under provisions of law other
34 than the emergency tenant protection act of nineteen seventy-four or the
35 rent stabilization law of nineteen hundred sixty-nine, the New York city
36 department of housing preservation and development, the New York state
37 urban development corporation, the New York state housing finance agen-
38 cy, the New York state housing trust fund, and the New York city housing
39 development corporation, or such other state or municipal agency, poli-
40 tical subdivision, public benefit corporation, or instrumentality as
41 the state division of housing and community renewal shall identify, may,
42 by agreement with an owner of a multiple dwelling, subject any housing
43 accommodation in such multiple dwelling to the emergency tenant
44 protection act of nineteen seventy-four or the rent stabilization law of
45 nineteen hundred sixty-nine, or both, if applicable to the municipality.
46 The requirements of such agreement shall supplement any requirements
47 imposed on such housing accommodation pursuant to any other provisions
48 of law.
49 2. Any agreement between a state or municipal agency, political subdi-
50 vision, public benefit corporation, or instrumentality described in
51 subdivision one of this section and an owner of a multiple dwelling that
52 contains provisions that are consistent with subdivision one of this
53 section and that is in effect as of the effective date of this section
54 is and will remain valid and enforceable.
55 § 612. Compliance monitoring. 1. Any supervising agency and any corpo-
56 rate governmental agency that constitutes a public benefit corporation
A. 6655--A 19
1 created pursuant to this chapter shall have the power to: (a) subpoena,
2 require the attendance of and examine and take testimony under oath of
3 such persons as it deems necessary to monitor, and enforce compliance
4 with, a note, mortgage, other financing agreement, regulatory agreement,
5 deed, land disposition agreement, or restrictive covenant with or
6 approved by such agency or corporation and entered into in connection
7 with an action taken pursuant to this chapter, the general municipal
8 law, the real property tax law, or the New York city zoning resolution;
9 and (b) subpoena and require the production of books, accounts, papers,
10 documents and other evidence related to such monitoring and enforcement.
11 2. Any person who has been issued a subpoena, or any other require-
12 ment to testify or produce books and records, pursuant to subdivision
13 one of this section, shall be required to comply with such subpoena or
14 other requirement within a reasonable period of time established by the
15 supervising agency or public benefit corporation that issued such
16 subpoena. Each day in which a person fails to comply with such subpoena,
17 or with any other such requirement to testify or produce books and
18 records, shall constitute a separate violation of this section. The
19 civil penalty for each such violation shall be not more than two hundred
20 fifty dollars, provided that such penalty shall not apply to any period
21 during which such subpoena or other requirement to testify or produce
22 books and records is the subject of a pending judicial proceeding
23 commenced prior to the expiration of the period of time established by
24 such supervising agency or public benefit corporation for compliance
25 with such subpoena or other requirement to testify or produce books and
26 records.
27 3. Any such supervising agency or public benefit corporation may
28 promulgate rules and regulations to carry out the provisions of this
29 section.
30 § 613. Charges. A municipality, or a supervising agency thereunder,
31 may require the payment of charges by an owner in consideration for
32 financing, regulation, supervision and audit of loans and grants made
33 pursuant to the provisions of this chapter. Such charges shall be paid
34 into the treasury of the municipality requiring the charges and shall be
35 paid and deposited in the general fund of any such municipality.
36 § 614. Servicing loans. An agency may make provision in a note and
37 loan agreement or by separate agreement for the performance of loan or
38 grant servicing functions, including, but not limited to, functions
39 related to lending or providing a grant for construction, as may gener-
40 ally be performed by an institutional lender. Such agency may act in
41 such capacity or appoint or consent to the appointment of a financial
42 institution or other qualified entity, as determined by such agency, to
43 act in such capacity on behalf of such agency. Such agency may pay a
44 reasonable and customary fee to such financial institution or other
45 qualified entity appointed by such agency, or to whose appointment such
46 agency provided consent, for the performance of such loan or grant
47 servicing functions.
48 § 29. Section 800 of the private housing finance law, as amended by
49 chapter 456 of the laws of 2003, is amended to read as follows:
50 § 800. Policy and purposes of article. It is hereby declared and found
51 that there exists in municipalities in this state substandard and insan-
52 itary areas and neighborhoods characterized by undermaintained and dete-
53 riorating housing accommodations and under-utilized non-residential
54 buildings and under-utilized vacant land. It is further found that there
55 exists in such municipalities a diminishing and seriously inadequate
56 supply of safe and sanitary dwelling accommodations, particularly for
A. 6655--A 20
1 persons of low income; that the loss of housing accommodations is caused
2 by the inability of the ordinary unaided operations of private enter-
3 prise to make loans for rehabilitation or construction purposes or for
4 conversion which accelerates the process of deterioration and abandon-
5 ment, turning active and viable neighborhoods into slums and blighted
6 areas; and that the prevention of deterioration and loss through aban-
7 donment can only be achieved by the elimination of conditions which are
8 unsafe or detrimental to health, the replacement of antiquated heating,
9 plumbing, and electrical systems and, where necessary, the overall reha-
10 bilitation of certain housing accommodations, the construction of new
11 housing accommodations on vacant land and the conversion of under-uti-
12 lized non-residential property to residential use, and that the unavail-
13 ability of funds for the conversion of under-utilized property to resi-
14 dential use, for the preservation and rehabilitation of housing
15 accommodations and for the construction of new housing accommodations on
16 vacant land constitutes a threat to the health, safety and well-being of
17 the persons who occupy them and denies to others the possibility of
18 living in safe and sanitary housing accommodations.
19 In order to promote the preservation and rehabilitation of such hous-
20 ing accommodations, the creation of new housing accommodations by the
21 conversion of under-utilized non-residential property into multiple
22 dwellings and the construction of new housing accommodations on vacant
23 land in such areas and to encourage the investment of private capital in
24 such areas, provision should be made for a municipality to attract
25 private investment for such purposes by utilizing funds, which are
26 available from the federal government through specific or discretionary
27 grants, or are available from other financing sources, for joint partic-
28 ipation loans with private investors, or loans or grants by the munici-
29 pality, to effect the required construction, rehabilitation or conver-
30 sion.
31 The necessity in the public interest for the provisions hereinafter
32 enacted is hereby declared as a matter of legislative determination.
33 § 30. Subdivision 5 of section 801 of the private housing finance law,
34 as amended by chapter 456 of the laws of 2003, is amended to read as
35 follows:
36 5. "Owner" shall mean an individual, partnership, corporation or other
37 entity, including a non-profit company, a mutual company, or a housing
38 development fund company, which holds record or beneficial title in fee
39 simple to the existing multiple dwelling to be rehabilitated or the
40 non-residential property to be converted into a multiple dwelling and
41 the real property upon which it is situate or to vacant land upon which
42 the new multiple dwelling is to be constructed, or is the lessee of any
43 such real property having an unexpired term of at least thirty years.
44 § 31. Section 801 of the private housing finance law is amended by
45 adding a new subdivision 5-a to read as follows:
46 5-a. "Participation loan" and the municipality's "participation" in,
47 "portion" of, or "investment" in a loan, or words of similar meaning,
48 shall mean any loan or grant made by the municipality or the New York
49 city housing development corporation pursuant to this article either
50 with or without a private investor, provided, however, that provisions
51 of this article concerning the repayment or forgiveness of, or security
52 for, a loan shall not apply to any grant made pursuant to this article.
53 § 32. Subdivision 6 of section 801 of the private housing finance law,
54 as amended by chapter 456 of the laws of 2003, is amended to read as
55 follows:
A. 6655--A 21
1 6. "Private investor" shall mean one or more banking organizations,
2 foundations, labor unions, credit unions, employers' associations,
3 veterans' organizations, colleges, universities, educational insti-
4 tutions, child care institutions, hospitals, medical research insti-
5 tutes, insurance companies, trustees or fiduciaries, trustees of pension
6 and retirement funds and systems, corporations, partnerships, individ-
7 uals or other entities or any combination of the foregoing, and shall
8 include the United States of America and the state of New York and any
9 [of its agencies acting as a lender under the loan program pursuant to
10 section three hundred twelve of the housing act of nineteen hundred
11 sixty-four and any amendments thereto or any similar program] agency,
12 office or public benefit corporation thereof. As used in this subdivi-
13 sion, the terms "trustees" and "fiduciaries" shall include any fiduciary
14 or fiduciaries holding funds for investment, and the term "banking
15 organizations" shall have the same meaning as in subdivision eleven of
16 section two of the banking law.
17 § 33. Subdivisions 1, 3 and 4 of section 802 of the private housing
18 finance law, subdivisions 1 and 3 as amended by chapter 456 of the laws
19 of 2003 and subdivision 4 as added by chapter 822 of the laws of 1976,
20 are amended to read as follows:
21 1. (a) Notwithstanding the provisions of any general, special or local
22 law, one or more private investors and a municipality, acting through
23 its agency, shall have the power to participate and invest in making
24 loans to the owners of existing multiple dwellings or to the owners of
25 non-residential property or to the owners of vacant land subject to the
26 limitations of subdivisions two through seven of this section, in such
27 amounts as shall be required for (i) the rehabilitation of such existing
28 multiple dwellings or for the conversion of such non-residential proper-
29 ty or for the construction of [a] new multiple [dwelling] dwellings on
30 such vacant land, provided that such rehabilitation, conversion or
31 construction may include climate resiliency improvements, and if any
32 such owner acquires the existing multiple dwelling or the non-residen-
33 tial property or the vacant land for the purpose of such rehabilitation,
34 conversion or construction or owns the existing multiple dwelling or the
35 non-residential property or the vacant land subject to an outstanding
36 indebtedness, such loans may be made exclusively for or may include such
37 amounts as may be required for the cost of such acquisition or for the
38 refinancing of such outstanding indebtedness, (ii) providing site
39 improvements located on the property on which such existing multiple
40 dwellings are located or on such non-residential property or vacant land
41 or in a public right-of-way, incidental or appurtenant to such rehabili-
42 tation, conversion or construction, including, but not limited to, water
43 and sewer facilities, sidewalks, landscaping, parks and open space,
44 social, recreational, communal and other non-residential facilities and
45 the outfitting thereof, the curing of problems caused by abnormal site
46 conditions, excavation and construction of footings and foundations and
47 other improvements associated with the provision of infrastructure for
48 housing accommodations, or (iii) providing for other costs of developing
49 housing accommodations, and such private investors and a municipality
50 may jointly participate or invest in the making of temporary loans or
51 advances to such owners in anticipation of the permanent participation
52 loans for such purposes.
53 (b) Notwithstanding the provisions of any general, special or local
54 law, and in addition to the power to make or contract to make partic-
55 ipation loans granted by paragraph (a) of this subdivision, the munici-
56 pality, acting through its agency, and the New York city housing devel-
A. 6655--A 22
1 opment corporation shall each have the power to make or contract to make
2 loans or grants to any owner described in paragraph (a) of this subdivi-
3 sion without the participation of a private investor, on the same terms
4 as permitted under such paragraph for a participation loan.
5 3. [(a)] Each participation loan shall be secured by a bond or note
6 and single participating mortgage or by separate bonds or notes and
7 mortgages upon the existing multiple dwelling or the non-residential
8 property and the land upon which it is situated or, in the case of the
9 construction of a new multiple dwelling, upon the vacant land and the
10 multiple dwelling to be constructed, or, in the case of a multiple
11 dwelling held in the condominium form of ownership, a note and mortgage
12 upon the condominium units rehabilitated with such participation loan,
13 provided that a participation loan to an owner who is a lessee shall be
14 secured by a leasehold interest in such property, and provided, further,
15 that each such loan shall be made upon such terms and conditions as may
16 be approved by the agency, including but not limited to, provisions that
17 [(i)] (a) priority may be given to the payment of the principal of and
18 interest on that portion of the mortgage indebtedness attributable to
19 participation in the loan by one or more private investors, [(ii)] (b)
20 the interest of the municipality created as a result of making such a
21 mortgage loan may be subordinated to the interest that one or more of
22 such private investors may have upon such participation, [(iii)] (c) the
23 interest of each upon such participation need not be of equal priority
24 as to lien nor be equal as to interest rate, time or rate of amorti-
25 zation of principal or time of payment of interest, or otherwise, [(iv)]
26 (d) the bond or note and mortgage may provide that the municipality's
27 portion of a participation loan made to an owner shall be reduced to
28 zero commencing in the fifteenth year after the execution of the bond or
29 note and mortgage, provided that, as of the date of any such reduction,
30 such multiple dwelling has been and continues to be owned and operated
31 in a manner consistent with a regulatory agreement with the munici-
32 pality. Notwithstanding such provision as contained in the bond or note
33 and mortgage, the municipality's portion of the loan shall be reduced to
34 zero only if, prior to or simultaneously with delivery of such bond or
35 note and mortgage, the agency made a written determination that such
36 reduction would be necessary to ensure the continued affordability or
37 economic viability of the multiple dwelling. Such written determination
38 shall document the basis upon which the loan was determined to be eligi-
39 ble for evaporation.
40 [(b) The aggregate amount of each such participation loan shall not
41 exceed the cost of the rehabilitation, conversion or construction, plus
42 the costs of any or all undertakings necessary for the planning, financ-
43 ing, acquisition, satisfaction of tax liens and other municipal liens
44 and encumbrances, construction, equipment and development in connection
45 therewith, provided that, if any portion of such loan is used for the
46 cost of acquisition or for refinancing, the amount of a municipality's
47 portion of such loan shall not exceed one and one-half times the cost of
48 rehabilitation, conversion or construction.
49 (c) The amount of any such loan, together with the amount of all prior
50 liens and encumbrances, shall not exceed, except in the case of a loan
51 made to a non-profit company, a mutual company, or a housing development
52 fund company, ninety per centum of value unless the agency makes a writ-
53 ten determination that the owner has insufficient resources to pay for
54 the remaining ten per centum of value, in which case such loan shall not
55 exceed ninety-five per centum of value. The amount of any such loan,
56 together with the amount of all prior liens and encumbrances, made to a
A. 6655--A 23
1 non-profit company, a mutual company, or a housing development fund
2 company shall not exceed value, provided that when after completion of
3 such rehabilitation, conversion or construction, such multiple dwelling
4 is, or is to be operated, exclusively for the benefit of persons and
5 families who are entitled to occupancy by reason of ownership of stock
6 in the corporate owners, such loan shall not exceed ninety-eight per
7 centum of value unless the agency makes a written determination that the
8 owner has insufficient resources to pay for the remaining two per centum
9 of value, in which case such loan shall not exceed value.]
10 4. Each such bond or note and mortgage or bonds or notes and mortgages
11 shall be repaid over or within a period of [thirty] forty years,
12 provided that such period may be extended as the agency may determine
13 necessary to ensure the continued affordability or economic viability of
14 the multiple dwelling, in such manner as may be provided in such bond or
15 note and mortgage or bonds or notes and mortgages [but in no case shall
16 the term of such loan exceed the probable life of the multiple dwelling
17 which is hereby determined to be thirty years]. Such bond or note and
18 mortgage or bonds or notes and mortgages and any contract in connection
19 with such permanent and temporary loans may contain such other terms and
20 provisions not inconsistent with the provisions of this article as the
21 local legislative body or the agency may deem necessary or desirable to
22 secure repayment of the loan, the interest thereon and other charges in
23 connection therewith and to carry out the purposes and provisions of
24 this article.
25 § 34. Subdivisions 2, 3 and 6 of section 1151 of the private housing
26 finance law, subdivision 2 as amended by chapter 567 of the laws of 1993
27 and subdivisions 3 and 6 as added by chapter 639 of the laws of 1989,
28 are amended to read as follows:
29 2. "Eligible project" shall mean a project intended to construct new
30 housing accommodations on an eligible site by new construction or
31 substantial rehabilitation, provided that such new construction or
32 substantial rehabilitation may include climate resiliency improvements.
33 An eligible project shall serve the needs of persons of low income,
34 including privately-owned one to four family dwellings, condominiums and
35 cooperatives, and rental projects.
36 3. ["Development costs" shall mean the reasonable and necessary costs
37 for planning, financing, acquisition of land or buildings and
38 construction of new buildings or the reconstruction, rehabilitation,
39 repair or remodeling of existing buildings and the costs of necessary
40 site improvements] "Participation loan" and the city's "participation"
41 in, "portion" of, or "investment" in a loan, or words of similar mean-
42 ing, shall mean any loan or grant made by the agency pursuant to this
43 article either with or without a private lender, provided, however, that
44 provisions of this article concerning the repayment or forgiveness of,
45 or security for, a loan shall not apply to any grant.
46 6. "Loan" shall mean a [first] mortgage loan made by a private lender
47 in participation with the city of New York to a sponsor for the purpose
48 of construction of an eligible project including a loan in which the
49 portion of the loan funded by the agency is represented by a separate
50 note and mortgage.
51 § 35. Section 1152 of the private housing finance law, as added by
52 chapter 639 of the laws of 1989, subdivision 4 as amended and subdivi-
53 sion 13 as added by chapter 241 of the laws of 1998, subdivision 12 as
54 added by chapter 400 of the laws of 1994 and paragraph e of subdivision
55 12 as amended by chapter 118 of the laws of 2003, is amended to read as
56 follows:
A. 6655--A 24
1 § 1152. Affordable housing development loans. 1. (a) Notwithstanding
2 the provisions of any general, special or local law, one or more private
3 lenders and the city of New York, acting through the agency, shall have
4 the power to participate and invest in making loans to sponsors for the
5 construction of eligible projects. Such loans may be made exclusively
6 for or may include such amounts as may be required for site acquisition
7 or the refinancing of eligible projects. Each such participation loan
8 shall be secured by a bond or note and single participating mortgage or
9 by separate bonds or notes and mortgages upon the eligible project. Such
10 bond or note and mortgage or bonds or notes or mortgages may contain
11 such other terms and provisions not inconsistent with the provisions of
12 this article as the agency may deem necessary or desirable, including,
13 but not limited to, terms providing that the lien created by such note
14 and mortgage, and, if applicable, any regulatory agreement executed by
15 the sponsor and such agency or restrictive covenant approved by such
16 agency, may be recorded in an equal or subordinate position, or subse-
17 quently made equal or subordinate, to the lien created by any private
18 lender against such eligible project.
19 (b) Notwithstanding the provisions of any general, special or local
20 law, and in addition to the power to make or contract to make partic-
21 ipation loans granted by paragraph (a) of this subdivision, the city of
22 New York, acting through the agency, shall have the power to make or
23 contract to make loans or grants to any owner described in paragraph (a)
24 of this subdivision without the participation of a private lender, on
25 the same terms as permitted under such paragraph for a participation
26 loan.
27 2. [The portion of such loan funded by the agency shall not exceed an
28 amount equal to sixty percent of the actual total development cost of an
29 eligible project.] The agency may enter into an agreement with a private
30 lender to deposit its share of a loan with the private lender to be
31 advanced by the private lender. The portion of the loan funded by the
32 agency may be equal to or subordinate in lien to the portion of the loan
33 funded by the private lender and may contain such terms with respect to
34 interest rate, if any, rate of amortization of principal, if any, and
35 time of payment of interest and principal as determined by the agency.
36 The agency may make provision either in the mortgage or mortgages or by
37 separate agreement for the performance by the private lender of such
38 services as are generally performed by a banking institution which
39 itself holds a mortgage, including, without limitation, construction
40 loan advances, construction supervision, initiation of foreclosure
41 proceedings, procurement of insurance, and all other matters in
42 connection with the financing, supervision, regulation and audit of any
43 such loan to any such eligible project.
44 3. [If a portion of the loan is to be utilized for acquisition of an
45 eligible site such portion shall in no event exceed fifteen percent of
46 the total amount of such loan or the appraised value of the site, which-
47 ever is the lesser.
48 4.] If the eligible project is to consist of one to four unit dwelling
49 accommodations or cooperative or condominium units, the agency's share
50 of the loan may be converted after completion of construction into mort-
51 gages on such dwelling accommodations or condominium units or financing
52 statements filed with respect to such cooperative shares, provided such
53 units or such cooperative shares are purchased by persons of [eligible]
54 low income. Such mortgages and any blanket mortgage that the agency
55 retains on any portion of, or on all of, the eligible project may
56 provide that [they] such mortgages and such blanket mortgage will auto-
A. 6655--A 25
1 matically be reduced to zero over a period of continuous [owner-occupan-
2 cy of the housing accommodations assisted by such loan] compliance by
3 the mortgagor with a regulatory agreement or restrictive covenant with
4 or approved by the agency and upon the satisfaction of any additional
5 conditions specified therein. Notwithstanding such provision as
6 contained in such mortgage, the loan shall be reduced to zero only if,
7 prior to or simultaneously with delivery of such mortgage, the agency
8 made a written determination that such reduction would be necessary to
9 ensure the continued affordability or economic viability of the eligible
10 project. Such written determination shall document the basis upon which
11 the loan was determined to be eligible for evaporation. Such period of
12 continuous [owner-occupancy] compliance with such regulatory agreement
13 or restrictive covenant shall not be less than fifteen years.
14 [5.] 4. If the eligible project is to consist of one to four unit
15 dwelling accommodations or cooperative or condominium units, the agency
16 shall require that the dwelling units be offered only to bona fide
17 purchasers who intend to occupy a unit as their principal place of resi-
18 dence; provided, however, that in the case of two to four unit dwelling
19 accommodations the bona fide purchaser may occupy only a single unit as
20 a principal place of residence. If the purchaser ceases to occupy the
21 unit as a principal place of residence, the agency may provide for
22 recapture of all or a portion of the agency's share of the loan.
23 [6.] 5. If the eligible project is a rental project, the agency's
24 share of the loan may be converted after completion of construction into
25 a [non-interest bearing, non-amortizing thirty year loan] permanent loan
26 with a term of forty years, provided that such period may be extended as
27 the agency may determine is necessary to ensure the continued afforda-
28 bility or economic viability of the eligible project, payable [at the
29 end of its term, provided that such loan shall be also payable out of
30 profits upon any sale or refinancing of the project prior to the end of
31 such thirty year period] in such manner as may be provided in the note
32 and any mortgage in connection with such loan. Such note and mortgage
33 may contain such terms and conditions as the agency may deem necessary
34 or desirable to effectuate the purposes and provisions of this article.
35 The sponsor or any subsequent owner or owners of such a project shall
36 agree to rent such units only to persons of [eligible] low income for
37 such [thirty year] period [and shall agree that all] as the agency may
38 determine. All such units shall be subject to the emergency tenant
39 protection act of nineteen seventy-four and the rent stabilization law
40 of nineteen hundred sixty-nine, as amended [for a period of thirty years
41 after initial occupancy], unless converted to a cooperative or condomin-
42 ium pursuant to subdivision [eight] seven of this section. [At the end
43 of such period each unit shall continue to be subject to such law there-
44 after until the first vacancy occurs at which time the unit shall be
45 decontrolled.] Initial rentals for all rental units shall be set by the
46 agency.
47 [7.] 6. If the eligible project is a rental project annual profits
48 shall be limited to an amount set by the agency for as long as the loan
49 is outstanding. Excess profits shall be used to establish project
50 reserves, provide capital improvements or reduce the principal amount of
51 the agency's loan, as determined by the agency.
52 [8.] 7. If the eligible project is a rental project, no conversion to
53 a cooperative or condominium shall be permitted for a period of twenty
54 years after initial occupancy, and unless (i) the agency's share of the
55 loan is prepaid upon such conversion, (ii) the conversion shall be done
56 pursuant to section three hundred fifty-two-eeee of the general business
A. 6655--A 26
1 law as a non-eviction plan, and (iii) apartments occupied by non-pur-
2 chasing tenants continue to be subject to the rent stabilization law of
3 nineteen hundred sixty-nine as amended, until the occurrence of a vacan-
4 cy.
5 [9.] 8. A loan made pursuant to this article shall be exempt from the
6 mortgage recording taxes imposed by article eleven of the tax law.
7 [10.] 9. Notwithstanding the provisions of any general, special or
8 local law or charter, the agency shall have power, without soliciting
9 competing bids, to contract with any sponsor or to make provision in a
10 loan for the construction or reconstruction of any site improvements
11 located in the public right-of-way or on the eligible site which are
12 necessary for the development of an eligible project. Such site improve-
13 ments may include, but shall not be limited to, streets, sidewalks,
14 landscaping, parks and open space, social, recreational, communal and
15 other non-residential facilities and the outfitting thereof, lighting
16 fixtures, and water and sewer lines, incidental or appurtenant to the
17 construction of such eligible projects.
18 [11.] 10. No loan shall be made pursuant to the provisions of this
19 article unless the agency finds that: (a) the construction of the eligi-
20 ble project does not directly displace current low and moderate income
21 residents of the eligible site; (b) the eligible project leverages
22 private and other public investment, if any, so as to reduce the amount
23 of assistance provided pursuant to this article to the minimal amount
24 which is necessary for construction of the eligible project; (c) the
25 eligible project will be built by a private developer/builder who has
26 agreed to limit its profit in accordance with a formula satisfactory to
27 the agency; (d) the eligible project will provide assistance to an area
28 which is blighted or deteriorated or has a blighting influence on the
29 surrounding area, or is in danger of becoming a slum or a blighted area
30 because of neighborhood conditions indicating an inability or unwilling-
31 ness of the private sector to cause the type of construction for which a
32 loan is to be provided; and (e) the eligible project will make home
33 ownership or rental housing affordable to persons who cannot presently
34 afford the housing available based upon the ordinary unaided operation
35 of private enterprise.
36 [12.] 11. a. The agency may make non-interest bearing advances to
37 sponsors to defray the pre-development costs of eligible projects in
38 accordance with the provisions of this chapter.
39 b. No such advances shall be made unless the agency finds that: (i)
40 the sponsor proposes to finance the eligible project in whole or in part
41 by a loan granted pursuant to this article or that the project, if
42 otherwise financed, will provide housing for persons or families of low
43 income, and that such project is otherwise consistent with the purposes
44 of this article; (ii) the project site is suitable, there is a need for
45 the housing type proposed in the area to be served and the project is
46 feasible; and (iii) it is reasonable to anticipate that financing will
47 be obtained and the agency makes a finding to that effect.
48 c. No such advances may be made to a sponsor unless such sponsor
49 enters into an agreement with the agency which provides that such spon-
50 sor shall be regulated with respect to rents, profits, dividends and
51 disposition of its property or franchise, in accordance with the
52 provisions of this article.
53 d. An advance granted pursuant to this section shall be used only to
54 defray the pre-development costs of eligible projects. For purposes of
55 this subdivision, the term pre-development costs shall include, but
56 shall not be limited to: the reasonable and necessary costs for plan-
A. 6655--A 27
1 ning, site preparation, developing architectural drawings and conducting
2 engineering and environmental studies, but shall not include acquisition
3 of land or buildings, drainage and landscaping of vacant land,
4 construction of new buildings or the reconstruction or rehabilitation of
5 existing buildings.
6 e. Each such advance shall be repaid in full to the agency by the
7 sponsor. Such repayment shall be made upon receipt by the sponsor or its
8 successor in interest of the proceeds of its mortgage or construction
9 loan for the eligible project, unless the agency extends the period for
10 the repayment of such advances. In no event shall the time of repayment
11 be extended to a date later than the date of final advance of funds
12 pursuant to such mortgage or construction loan. Notwithstanding this
13 paragraph, the agency may reduce such advance to zero over a period of
14 continued compliance with the agency's agreement with the sponsor pursu-
15 ant to paragraph c of this subdivision if the agency has made a written
16 determination that such reduction would be necessary to ensure the
17 continued affordability or economic viability of the eligible project.
18 Such written determination shall document the basis upon which the agen-
19 cy's non-interest bearing advance was determined eligible for evapo-
20 ration.
21 f. If the agency, in its discretion, determines at any time that mort-
22 gage or construction financing for the eligible project may not be
23 obtained, then all advances made to the sponsor pursuant to this subdi-
24 vision shall become immediately due and payable upon the demand of the
25 agency.
26 [13.] 12. If the eligible project is a rental project, the bond or
27 note and mortgage or bonds or notes or mortgages issued by the sponsor
28 of any eligible project to secure a participation loan may provide that
29 the city's portion of such loan shall be reduced to zero commencing on
30 the fifteenth year after the execution of such bond or note and mortgage
31 or bonds or notes or mortgages, provided that, as of the date of any
32 such reduction, the eligible project has been and continues to be owned
33 and operated in a manner consistent with a regulatory agreement with the
34 city. Notwithstanding such provision as contained in the bond or note
35 and mortgage or bonds or notes or mortgages, the loan shall be reduced
36 to zero only if, prior to or simultaneously with delivery of such bond
37 or note and mortgage or bonds or notes or mortgages, the agency made a
38 written determination that such reduction would be necessary to ensure
39 the continued affordability or economic viability of the eligible
40 project. Such written determination shall document the basis upon which
41 the loan was determined to be eligible for evaporation.
42 § 36. Paragraph (g) of subdivision 6 of section 1802 of the New York
43 city charter, as amended by vote of the people of the city of New York
44 at the general election held in November of 1989, is amended to read as
45 follows:
46 (g) [impose and collect] require the payment of charges [and fees] in
47 consideration for the financing, regulation, supervision and audit of
48 municipally-aided projects and loan programs administered by the commis-
49 sioner, which charges [and fees] shall be [set aside in a special
50 account for administrative expenses of the department] paid into the
51 treasury of the city and shall be paid and deposited in the general fund
52 of the city;
53 § 37. This act shall take effect immediately, provided that: (i) the
54 amendments to subdivision 1 of section 696-a of the general municipal
55 law made by section two of this act shall be subject to the expiration
56 and reversion of such subdivision pursuant to section 2 of chapter 613
A. 6655--A 28
1 of the laws of 1996, as amended, when upon such date the provisions of
2 section three of this act shall take effect; and (ii) the amendments to
3 subdivision 1 of section 576-c of the private housing finance law made
4 by section twenty-six of this act shall be subject to the expiration and
5 reversion of such subdivision pursuant to section 2 of chapter 84 of the
6 laws of 1993, as amended, when upon such date the provisions of section
7 twenty-seven of this act shall take effect.
