Bill Text: NY A03669 | 2021-2022 | General Assembly | Amended
Bill Title: Relates to the modernization of affordable housing financing authorities.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2022-06-01 - reported referred to rules [A03669 Detail]
Download: New_York-2021-A03669-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 3669--A 2021-2022 Regular Sessions IN ASSEMBLY January 28, 2021 ___________ Introduced by M. of A. CYMBROWITZ, EPSTEIN -- read once and referred to the Committee on Housing -- reported and referred to the Committee on Ways and Means -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the general municipal law, the local finance law, and the private housing finance law, in relation to the modernization of affordable housing financing authorities; and to repeal certain provisions of the private housing finance law relating thereto The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraphs a, c and g of subdivision 1 of section 696-a of 2 the general municipal law, as amended by chapter 320 of the laws of 3 1999, are amended to read as follows: 4 a. Notwithstanding the provisions of any general, special or local 5 law, an agency is hereby authorized to make or contract to make grants 6 or loans to the owner of any property that is part of an urban develop- 7 ment action area project for the purpose of (i) rehabilitation of an 8 existing private or multiple dwelling, (ii) providing site improvements 9 within the urban development action area in which the urban development 10 action area project is located, including, but not limited to, water and 11 sewer facilities, sidewalks, landscaping, parks and open space, social, 12 recreational, communal and other non-residential facilities and the 13 outfitting thereof, the curing of problems caused by abnormal site 14 conditions, excavation and construction of footings and foundations and 15 other improvements associated with the provision of infrastructure, or 16 (iii) providing for other costs of construction for the development of 17 private and multiple dwelling housing accommodations. 18 c. Any loan made in accordance with this section shall be secured by a 19 note and mortgage upon the property, or any portion of such property, 20 improved or, in the case of a condominium, a note and mortgage upon each 21 of the housing accommodations aided by such loan, or in the case of a EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06664-09-2A. 3669--A 2 1 cooperative housing corporation, a note and mortgage upon the economic 2 interest in such corporation of each tenant-shareholder aided by such 3 loan, or upon the property, or any portion of such property, improved, 4 or upon both such economic interest or property; provided, however, that 5 all or part of any such loan may be unsecured if necessary to satisfy 6 the requirements of any participating lender. Such loan shall be repaid 7 over such period as the agency shall determine. 8 g. For purposes of this section, (i) the term "mortgage" shall include 9 any pledge or assignment of shares or assignment of a proprietary lease 10 in a cooperative housing corporation where such pledge or assignment is 11 intended as security for the performance of an obligation and which 12 imposes a lien on or affects title to such shares or such proprietary 13 lease; and (ii) the term "owner" shall mean an individual, partnership, 14 corporation or other entity, including a non-profit company, a mutual 15 company, or a housing development fund company, having record or benefi- 16 cial title in fee simple to real property or the lessee thereof under a 17 lease having a term of at least forty-nine years. 18 § 2. Section 696-a of the general municipal law, as amended by chapter 19 465 of the laws of 1993, is amended to read as follows: 20 § 696-a. Loans. Notwithstanding the provisions of any general, special 21 or local law, an agency is hereby authorized to make or contract to make 22 grants or loans[: (i)] to the owner of any property that is part of an 23 urban development action area project for the purpose of: (i) rehabili- 24 tation of an existing private or multiple dwelling, (ii) [for the25purpose of] providing site improvements within the urban development 26 action area in which the urban development action area project is 27 located, including, but not limited to, water and sewer facilities, 28 sidewalks, landscaping, parks and open space, social, recreational, 29 communal and other non-residential facilities and the outfitting there- 30 of, the curing of problems caused by abnormal site conditions, exca- 31 vation and construction of footings and foundations and other improve- 32 ments associated with the provision of infrastructure, or (iii) [for the33purpose of] providing for other costs of construction for the develop- 34 ment of private and multiple dwelling housing accommodations. In the 35 case of a grant made under this section for the rehabilitation of an 36 existing multiple dwelling intended to be converted to a condominium or 37 cooperative form of ownership or for the development of one to four unit 38 housing accommodations or a condominium or cooperative housing corpo- 39 ration, such grant shall require a regulatory agreement with the agency 40 limiting profits. Any loan made in accordance with this section shall be 41 secured by a note and mortgage upon the property, or any portion of such 42 property, improved or, in the case of a condominium, a note and mortgage 43 upon each of the housing accommodations aided by such loan, or in the 44 case of a cooperative housing corporation, a note and mortgage upon the 45 economic interest in such corporation of each tenant-shareholder aided 46 by such loan, or upon the property, or any portion of such property, 47 improved, or upon both such economic interest or property; provided, 48 however, that all or part of any such loan may be unsecured if necessary 49 to satisfy the requirements of any participating lender. Such loan 50 shall be repaid over such period as the agency shall determine. In the 51 case of a loan for rehabilitation of an existing multiple dwelling 52 intended to be converted to a condominium or cooperative form of owner- 53 ship or a loan for the provision of infrastructure or for the provision 54 of other costs of construction for the development of one to four unit 55 housing accommodations or a condominium or cooperative housing corpo- 56 ration, such note and mortgage may provide that the loan shall automat-A. 3669--A 3 1 ically be reduced to zero over a period of owner-occupancy of the hous- 2 ing accommodations assisted by such loan. In the case of a grant or loan 3 made under this section for the purpose of providing rental housing for 4 persons of low income as defined in section two of the private housing 5 finance law, such loan or grant shall require a regulatory agreement 6 with the agency limiting profits and rentals charged. In the case of a 7 loan made under this section for the purpose of providing rental housing 8 for persons of low income as defined in section two of the private hous- 9 ing finance law, such note and mortgage may provide that the loan shall 10 automatically be reduced to zero over a period of up to thirty years of 11 compliance by the owner with a regulatory agreement with the agency 12 limiting profits and rentals charged. The repayment of any loan made in 13 accordance with this section shall be made in such manner as may be 14 provided in such note and mortgage in connection with such loan, and may 15 authorize the owner, with the consent of the agency, to prepay the prin- 16 cipal of the loan subject to such terms and conditions as therein 17 provided. Such note and mortgage may contain such other terms and condi- 18 tions not inconsistent with the provisions of this article as the agency 19 may deem necessary or desirable to carrying out the purposes and 20 provisions of this article including, but not limited to, provisions 21 concerning the repayment of the loan, the interest, if any, thereon, and 22 other charges in connection therewith. For purposes of this section, (1) 23 the term "mortgage" shall include any pledge or assignment of shares or 24 assignment of a proprietary lease in a cooperative housing corporation 25 where such pledge or assignment is intended as security for the perform- 26 ance of an obligation and which imposes a lien on or affects title to 27 such shares or such proprietary lease; and (2) the term "owner" shall 28 mean an individual, partnership, corporation or other entity, including 29 a non-profit company, a mutual company, or a housing development fund 30 company, having record or beneficial title in fee simple to real proper- 31 ty or the lessee thereof under a lease having a term of at least forty- 32 nine years. 33 § 3. The general municipal law is amended by adding a new section 34 696-e to read as follows: 35 § 696-e. Servicing. An agency may make provision for the performance 36 of loan or grant servicing functions, including but not limited to func- 37 tions related to lending or providing a grant for construction, as may 38 generally be performed by an institutional lender. Such agency may act 39 in such capacity or appoint or consent to the appointment of a financial 40 institution or other qualified entity, as determined by such agency, to 41 act in such capacity on behalf of such agency. Such agency is authorized 42 to pay a reasonable and customary fee to such financial institution or 43 other qualified entity for the performance of such services. 44 § 4. Subdivision 41 of paragraph a of section 11.00 of the local 45 finance law, as amended by chapter 400 of the laws of 1994, is amended 46 to read as follows: 47 41. Housing. The effectuating of any of the purposes of the public 48 housing law, other than making loans to limited profit housing companies 49 pursuant to article two of the private housing finance law, and other 50 than making loans to owners of existing multiple dwellings, fifty years; 51 bonds issued by a housing authority pursuant to section forty-one of the 52 public housing law and guaranteed by a municipality pursuant to section 53 ninety-five of the public housing law, five years, in addition to the 54 foregoing period of fifty years, for the temporary financing of a 55 project prior to the permanent financing thereof; evidences of indebt- 56 edness issued to the state pursuant to paragraph c of section 20.00 ofA. 3669--A 4 1 this chapter, three years, in addition to the foregoing period of fifty 2 years for the temporary financing of a project prior to the permanent 3 financing thereof; loans to limited profit housing companies pursuant to 4 article two of the private housing finance law, fifty-five years; loans 5 or grants to owners of existing private or multiple dwellings, non-resi- 6 dential property, or vacant land pursuant to the provisions of article 7 eight, article eight-A, article eight-B, article eleven or article 8 fifteen of the private housing finance law, or loans for the 9 construction of multiple dwellings pursuant to article eleven of the 10 private housing finance law, or loans or grants for the pre-development 11 costs or construction of private or multiple dwellings pursuant to arti- 12 cle twenty-two of the private housing finance law, thirty years. 13 § 5. Section 2 of the private housing finance law is amended by adding 14 a new subdivision 30 to read as follows: 15 30. "Climate resiliency improvements." Improvements for the purpose of 16 protecting land or any structures thereon from damage resulting from or 17 which may result from changes in climate, including, but not limited to, 18 extreme weather events, abnormal temperatures, and sea level rise, or of 19 reducing the impact of the operation of such structures on climate 20 change, including, but not limited to, improvements that reduce energy 21 consumption or promote the efficient use of natural resources. 22 § 6. Section 400 of the private housing finance law is amended to read 23 as follows: 24 § 400. Policy and purposes of article. It is hereby declared that 25 there exists in municipalities in this state a seriously inadequate 26 supply of safe and sanitary dwelling accommodations for persons and 27 families of low income; that such shortage constitutes an emergency and 28 a grave menace to the health, safety, morals, welfare and comfort of 29 citizens of this state; that there exists in such municipalities a large 30 number of multiple dwellings which are inadequate, unsafe or insanitary 31 by reason of the absence of proper heating facilities or by reason of 32 the necessity for elimination of conditions dangerous to human life or 33 detrimental to health, including nuisances as defined[,] in section 34 three hundred nine of the multiple dwelling law, or for other rehabili- 35 tation or improvement and which can be made adequate, safe and sanitary, 36 by the installation of proper heating facilities or by other rehabili- 37 tation, preservation or improvement or by the elimination of such condi- 38 tions; that such installation, rehabilitation, preservation or improve- 39 ment cannot readily be provided by the ordinary unaided operation of 40 private enterprise for occupancy by persons or families of low income 41 without public aid in the form of low interest loans or grants to owners 42 of such multiple dwellings for the purpose of such installation, reha- 43 bilitation, preservation or improvement; that the installation of proper 44 heating facilities in such multiple dwellings or other rehabilitation, 45 preservation or improvement thereof for occupancy by persons of low 46 income as defined in this article is a public use and a public purpose 47 for which public money may be loaned or granted; that such conditions 48 require the provisions hereinafter enacted; and the necessity in the 49 public interest for the provisions hereinafter enacted is hereby 50 declared as a matter of legislative determination. 51 § 7. Subdivision 3 of section 401 of the private housing finance law, 52 paragraph a as amended by chapter 44 of the laws of 1976, and paragraph 53 b as amended by chapter 904 of the laws of 1962, is amended to read as 54 follows: 55 3. a. The term "persons or families of low income" shall mean "persons 56 of low income" or "families of low income" as defined in section two ofA. 3669--A 5 1 this chapter[, whose probable aggregate annual income during the period2of occupancy does not exceed six times the rental (including the value3or cost to them of heat, light, water and cooking fuel) of dwelling4units occupied by such persons or families in existing multiple dwell-5ings aided by a loan pursuant to this article, except that in the case6of persons or families with three or more dependents, such ratio shall7not exceed seven to one, and except further that the income limitations8prescribed by this paragraph shall be subject to the provisions of9subdivision two of section four hundred three of this article.10In calculating annual income, social security payments and income11received from private pension funds by any person sixty-two years of age12or more shall be excluded up to a total maximum amount of seventy-five13dollars per month. The term "probable aggregate annual income" means the14annual income of the chief wage earner of the family, plus all other15income of other members of the family over the age of twenty-one years,16plus a proportion of income of gainfully employed members under the age17of twenty-one years, the proportion to be determined by the agency. The18agency may exclude a proportion of the income of other members of the19family over the age of twenty-one years for the purpose of determining20eligibility for commencement of occupancy or continued occupancy, or for21establishing rental of such family, or for all such purposes]. 22 b. Notwithstanding the provisions of paragraph a of this subdivision, 23 [and subject to the provisions of subdivision three of section four24hundred three of this article] the term "persons or families of low 25 income" shall also mean any person or family who, immediately prior to 26 the date on which a contract for a loan with respect to an existing 27 multiple dwelling is entered into pursuant to the provisions of this 28 article, occupies any dwelling unit in such multiple dwelling and who 29 continuously occupies such unit during and after completion of central 30 heating or other rehabilitation or improvement performed pursuant to 31 such contract provided, however, that any person or family required to 32 remove from any such dwelling unit because of such installation, reha- 33 bilitation or improvement shall, for the purpose of this section, be 34 deemed to have continuously occupied such unit and shall have preference 35 in re-entering such multiple dwelling upon completion of the aforesaid 36 work. 37 § 8. Subdivision 6 of section 401 of the private housing finance law, 38 as added by chapter 505 of the laws of 1973, is amended to read as 39 follows: 40 6. The term "owner" shall mean a person having record or beneficial 41 title in fee simple to real property or the lessee thereof under a lease 42 having an unexpired term of at least thirty years. 43 § 9. Subdivision 1 of section 402 of the private housing finance law, 44 as amended by chapter 808 of the laws of 1971, is amended and a new 45 subdivision 1-a is added to read as follows: 46 1. Notwithstanding the provisions of any general, special or local 47 law, a municipality, by such officer or agency as determined by its 48 local legislative body, is hereby authorized: 49 (a) to make or contract to make loans to the owners of existing multi- 50 ple dwellings within its territorial limits, subject to the limitations 51 in subdivision two of this section, in such amounts as may be required 52 for the installation of proper heating facilities, the incorporation of 53 climate resiliency improvements or elimination of conditions dangerous 54 to human life or detrimental to health, including nuisances as defined 55 in section three hundred nine of the multiple dwelling law, or other 56 rehabilitation, preservation or improvement of such multiple dwellings,A. 3669--A 6 1 and if such owner acquires the multiple dwelling for the purposes of 2 such rehabilitation, preservation or improvement or owns the multiple 3 dwelling subject to an outstanding indebtedness, such loans may be made 4 exclusively for or may include such amounts as may be required for the 5 cost of such acquisition or for the refinancing of such outstanding 6 indebtedness, and may make temporary loans or advances to such owners in 7 anticipation of the permanent municipal loans for such purposes[.]; and 8 (b) to make or contract to make grants to any owner described in para- 9 graph (a) of this subdivision, on the same terms as permitted under such 10 paragraph for a loan. 11 1-a. As used in this article, the term "loan" shall include any grant 12 made by a municipality pursuant to this section, provided, however, that 13 any provision of this article concerning the repayment or forgiveness 14 of, or security for, a loan shall not apply to any grant made pursuant 15 to this article. 16 § 10. Subdivisions 2-a, 2-b, and 2-c of section 402 of the private 17 housing finance law, subdivision 2-a as added by chapter 213 of the laws 18 of 1975, subdivision 2-b as amended by chapter 362 of the laws of 2000, 19 and subdivision 2-c as amended by chapter 101 of the laws of 1994, are 20 amended to read as follows: 21 2-a. [As used in this section the term "value" shall mean the "as is"22value of the multiple dwelling and the land upon which it is situated23prior to such installation, elimination, other rehabilitation or24improvement referred to in subdivision one of this section plus the25total of all costs of such installation, elimination, rehabilitation or26improvement including, but not limited to, the costs of any or all27undertakings necessary for the planning, financing, tenant relocation,28acquisition, construction, equipment and development in connection ther-29ewith.302-b.] (a) Each permanent loan shall be secured by a bond and mortgage 31 or note and mortgage upon the multiple dwelling, or any portion of such 32 multiple dwelling, and the land upon which it is situated[; where the33loan is made to an owner who is a lessee, such loan shall be secured by34a first lien on such property]. 35 (b) [The amount of any such loan shall not exceed the cost of the36installation of proper heating facilities, or elimination of conditions37dangerous to human life or detrimental to health, including nuisances as38defined in section three hundred nine of the multiple dwelling law, or39other rehabilitation or improvement provided that, if any portion of40such loan is used for the cost of acquisition of the land and the multi-41ple dwelling or for re-financing, the total amount of such loan shall42not exceed two times the cost of such installation, elimination of such43conditions, rehabilitation or improvement.44(c) The amount of any such loan, together with the amount of all prior45liens and encumbrances, shall not exceed, except in the case of a loan46made to a non-profit company, a mutual company, or a housing development47fund company, ninety per centum of the value of the property, after48completion of the installation of proper heating facilities, or elimi-49nation of such conditions or other rehabilitation or improvement, as50estimated by the agency, unless the agency makes a written determination51that the owner has insufficient resources to pay for the remaining ten52per centum of the value of the property, after completion of such53installation, elimination, or other rehabilitation or improvement, as54estimated by the agency, in which case such loan shall not exceed nine-55ty-five per centum of the value of the property, after completion of the56installation of proper heating facilities, or elimination of such condi-A. 3669--A 7 1tions or other rehabilitation or improvement, as estimated by the agen-2cy. The amount of any such loan, together with the amount of all prior3liens and encumbrances, made to a non-profit company, a mutual company,4or a housing development fund company shall not exceed the value of the5property after completion of such installation, elimination, or other6rehabilitation or improvement, as estimated by the agency provided that7when after completion of such installation, elimination or other reha-8bilitation or improvement, such project is, or is to be operated exclu-9sively for the benefit of persons or families who are entitled to occu-10pancy by reason of ownership of stock in the corporate owners, such loan11shall not exceed ninety-eight percentum of the value of the property,12after completion of such installation, elimination, or other rehabili-13tation or improvement, as estimated by the agency, unless the agency14makes a written determination that the owner has insufficient resources15to pay for the remaining two per centum of the value of the property,16after completion of such installation, elimination, or other rehabili-17tation or improvement, as estimated by the agency, in which case such18loan shall not exceed the value of the property, after completion of19such installation, elimination, or other rehabilitation or improvement,20as estimated by the agency.21(d)] Each such bond and mortgage or note and mortgage shall be repaid 22 over or within a period of [thirty] thirty-five years, provided that 23 such period may be extended and shall be repaid within thirty-five 24 years, in such manner as may be provided in such bond and mortgage or 25 note and mortgage and contract [but in no case to exceed the probable26life of the multiple dwelling which is hereby determined to be thirty27years]. Such bond and mortgage or note and mortgage and the contract in 28 connection with such permanent and temporary loans may contain such 29 other terms and provisions not inconsistent with the provisions of this 30 article as the local legislative body or the agency may deem necessary 31 or desirable to secure repayment of the loan, the interest thereon and 32 other charges in connection therewith and to carry out the purposes and 33 provisions of this article[; notwithstanding the foregoing, a loan made34prior to January first, nineteen hundred seventy-eight may, in the35discretion of the agency, be extended to a term up to forty-five years.36The agency may modify the rate and time of payment of interest on the37original loan and the rate and time of amortization of principal in such38manner as required to secure payment of the loan within the extended39term]. 40 [2-c.] 2-b. If a loan pursuant to this article is made to a non-profit 41 company or a housing development fund company which agrees to provide 42 housing accommodations exclusively for persons and families of low 43 income, at least thirty percent of whom are referred to it by the muni- 44 cipality and have prior to their initial occupancy in such accommo- 45 dations resided in emergency shelter facilities operated by or on behalf 46 of the municipality, the agency may provide that the note and mortgage 47 shall automatically be reduced to zero in five equal annual decrements 48 commencing on the tenth year after the initial occupancy date, provided 49 that such accommodations have been owned and operated in a manner 50 consistent with an agreement with the municipality contained in such 51 note and mortgage to provide housing for such persons. 52 § 11. Subdivisions 2, 3, 4 and 5 of section 403 of the private housing 53 finance law, subdivision 2, paragraphs a, b and c of subdivision 3 and 54 subdivision 4 as amended by chapter 904 of the laws of 1962, are amended 55 to read as follows:A. 3669--A 8 1 2. [In the event that after any person or family included within the2provisions of paragraph a of subdivision three of section four hundred3one of this article, but not included within the provisions of paragraph4b of such subdivision three, begins occupancy of any dwelling unit in5any multiple dwelling aided by a loan pursuant to this article, and6during the period while such dwelling unit is subject to a maximum rent7prescribed pursuant to this article, the income of such person or family8increases so as to exceed the applicable maximum prescribed by such9paragraph a by more than fifty per centum, such person shall be subject10to removal from such dwelling with the approval of the agency.113. a. In the event that on the date on which a contract for a loan is12made with respect to a multiple dwelling aided by a loan pursuant to13this article, any person or family occupying a dwelling unit in such14multiple dwelling and included within the provisions of paragraph b of15subdivision three of section four hundred one of this article, has a16probable aggregate annual income, as determined in accordance with the17provisions of paragraph a of such subdivision three, which exceeds the18income limits specified in such paragraph a by more than fifty per cent,19such person or family shall be subject to removal from such dwelling20unit with the approval of the agency upon the expiration of a period of21two years after the date on which such contract is entered into.22b. In the event that at any time within a period of two years after23any such contract is entered into, the income of any such person or24family increases so as to exceed the income limits specified in such25paragraph a by more than fifty per cent, such person or family shall be26subject to removal from such dwelling unit with the approval of the27agency upon the expiration of such period of two years.28c. If, at any time subsequent to the expiration of a period of two29years after any such contract is entered into, and during the period30while the dwelling unit occupied by any such person or family is subject31to a maximum rent prescribed pursuant to this article, the income of32such person or family increases so as to exceed the income limits speci-33fied in such paragraph a by more than fifty per cent, such person or34family shall be subject to removal from such dwelling unit with the35approval of the agency.364.] Any person or family in occupancy[, whether included within the37provisions of paragraph a or paragraph b of subdivision three of section38four hundred one of this article, whose income exceeds the maximum39prescribed by the provisions of such paragraph a with respect to the40time of beginning of occupancy, shall] whose income precludes the inclu- 41 sion of such person or family within the definition provided in para- 42 graph a of subdivision three of section four hundred one of this article 43 may be required to pay a rental surcharge in accordance with a schedule 44 of surcharges to be promulgated by the agency. In determining imposi- 45 tion of any such surcharge, the agency shall consider factors such as 46 the net operating income and debt service coverage ratio of the property 47 aided by a loan pursuant to this article. Rental surcharges collected 48 pursuant to this section shall be paid by the owner to the municipality 49 which has granted such owner tax exemption or tax abatement pursuant to 50 any law authorizing the granting of same, as reimbursement to such muni- 51 cipality therefor. In the event that such tax exemption and tax abate- 52 ment have not been granted, or in the event that a sum equal to the 53 total amount of tax exemption and tax abatement granted to the owner has 54 been paid to the municipality, the excess, if any, of surcharges shall 55 be paid to the municipality in reduction of the loan.A. 3669--A 9 1 [5. Any person or family whose removal is required by any provision of2this article shall be subject to removal by summary proceedings.] 3 § 12. The opening paragraph of subdivision 1 of section 404 of the 4 private housing finance law, as added by chapter 904 of the laws of 5 1962, is amended to read as follows: 6 No such loan shall be made by a municipality to an owner of an exist- 7 ing multiple dwelling unless the owner of such multiple dwelling [and8all persons holding a lien prior to that of the municipality] shall 9 covenant in writing that so long as any part of such loan remains 10 unpaid, any exemption and abatement from taxation on the property 11 resulting from the installations, alterations or improvements made with 12 such loan remains in effect or for a period of at least ten years from 13 the occupancy date, whichever is the later: 14 § 13. Section 450 of the private housing finance law, as amended by 15 chapter 273 of the laws of 1975, is amended to read as follows: 16 § 450. Policy and purposes of article. It is hereby declared that 17 there exists in municipalities in this state a seriously inadequate 18 supply of safe and sanitary dwelling accommodations; that such shortage 19 constitutes an emergency and a grave menace to the health, safety, 20 morals, welfare and comfort of citizens of this state; that existing 21 conditions of deterioration of housing marked by noncompliance with the 22 multiple dwelling law or local housing codes threaten a further decrease 23 in such supply; that rehabilitation and improvement of dwellings to 24 prolong the useful life of such dwellings may be necessary to arrest 25 such conditions of deterioration; that the elimination of such condi- 26 tions by rehabilitation or other improvement cannot readily be provided 27 by the ordinary unaided operation of private enterprise without public 28 aid in the form of low interest loans or grants to owners of such multi- 29 ple dwellings; that such rehabilitation or other improvement of such 30 dwellings to bring them into conformance with the multiple dwelling law 31 and local housing codes is a public use, a public purpose and a city 32 purpose for which public money may be loaned or granted by a munici- 33 pality and for which indebtedness may be contracted by a municipality; 34 that such conditions require the provisions hereinafter enacted, and the 35 necessity in the public interest for the provisions hereinafter enacted 36 is hereby declared as a matter of legislative determination. 37 § 14. Subdivisions 2 and 3 of section 451 of the private housing 38 finance law, subdivision 2 as amended by chapter 705 of the laws of 1976 39 and subdivision 3 as amended by chapter 269 of the laws of 1985, are 40 amended to read as follows: 41 2. "Occupancy by persons of low income." Occupancy by [persons paying42rentals or carrying charges not in excess of the average rentals or43carrying charges prevailing in local projects of municipally-aided44limited-profit housing companies aided under article two of this chap-45ter, the occupancy of which commenced on or after May eighteenth, nine-46teen hundred seventy] "persons of low income" or "families of low 47 income," as such terms are defined in section two of this chapter. 48 3. "Owner." An individual, partnership, corporation or other entity, 49 including a non-profit company, a mutual company, or a housing develop- 50 ment fund company, which holds record or beneficial title in fee simple 51 to the multiple dwelling and the real property upon which it is situate 52 or the lessee thereof under a lease the unexpired term of which shall be 53 not less than the term of the loan to be made under this article. 54 § 15. Subdivision 1 of section 452 of the private housing finance law, 55 as amended by chapter 923 of the laws of 1983, is amended and a new 56 subdivision 1-a is added to read as follows:A. 3669--A 10 1 1. Notwithstanding the provisions of any general, special or local 2 law, a municipality is hereby authorized: 3 (a) to make or contract to make loans to the owners of existing multi- 4 ple dwellings within its territorial limits, subject to the limitations 5 in subdivision two of this section, for the elimination of any substand- 6 ard or insanitary condition or conditions in violation of the multiple 7 dwelling law or local housing code, for the incorporation of climate 8 resiliency improvements or for such replacement and rehabilitation of 9 the heating, plumbing, electrical and related systems or other improve- 10 ments as shall be reasonably necessary to prolong the useful life of 11 such dwellings, and may make temporary loans to such owners in antic- 12 ipation of the permanent municipal loans for such purposes; and 13 (b) to make or contract to make grants to any owner described in 14 paragraph (a) of this subdivision, on the same terms as permitted under 15 such paragraph for a loan. 16 1-a. As used in this article, the term "loan" shall include any grant 17 made by a municipality pursuant to this section, provided, however, that 18 provisions of this article concerning the repayment or forgiveness of, 19 or security for, a loan shall not apply to any grant made pursuant to 20 this article. 21 § 16. Subdivision 2 of section 452 of the private housing finance law, 22 as amended by chapter 408 of the laws of 2009, is amended to read as 23 follows: 24 2. Each loan shall be evidenced by a note executed by the owner of the 25 existing multiple dwelling. The supervising agency in its discretion may 26 require one or more of the shareholders of a corporate owner to co-sign 27 such note or to otherwise guarantee or pledge security for the repayment 28 of the loan. [The amount of any such loan shall not exceed the sum of29thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of30eliminating such substandard or insanitary condition or conditions, or31effecting such rehabilitation or improvement, whichever is less.] Each 32 such note shall be repaid within a period [of the probable life of the33existing multiple dwelling which is hereby determined to be thirty34years, or such shorter period as the supervising agency shall determine] 35 of thirty-five years, provided that such period may be extended and 36 shall be repaid within thirty-five years. The repayment shall be made 37 in such manner as may be provided in such note and contract, if any, in 38 connection with such loan and may authorize such owner, with the consent 39 of the supervising agency, to prepay the principal of the loan subject 40 to such terms and conditions as therein provided. Such note and contract 41 may contain such other terms and provisions not inconsistent with the 42 provisions of this article as the local legislative body or supervising 43 agency may deem necessary or desirable to secure repayment of the loan, 44 the interest thereon and other charges in connection therewith and to 45 carry out the purposes and provisions of this article, including but not 46 limited to provisions ensuring availability of rents for such repayment. 47 § 17. Section 453 of the private housing finance law, as added by 48 chapter 924 of the laws of 1970, paragraphs (c) and (d) as amended and 49 paragraph (e) of subdivision 1 as added by chapter 273 of the laws of 50 1975, is amended to read as follows: 51 § 453. Conditions precedent to making such loans. [1.] No such loan 52 shall be made by a municipality to an owner of an existing multiple 53 dwelling unless the owner of such multiple dwelling shall covenant in 54 writing that so long as any part of such loan shall remain unpaid or 55 for a period of at least ten years from the date of the loan, whichever 56 is later:A. 3669--A 11 1 [(a)] 1. Each dwelling unit in such multiple dwelling shall be avail- 2 able solely for occupancy by persons of low income; 3 [(b)] 2. No person who lives in such multiple dwelling at the time the 4 loan is made shall be required to move because of the rehabilitation or 5 improvement financed thereby, except that a temporary relocation may be 6 required in connection with such rehabilitation or improvement; 7 [(c)] 3. All persons operating or managing such multiple dwelling will 8 permit the duly authorized officers, employees, agents or inspectors of 9 the municipality to enter in or upon and inspect such multiple dwelling 10 at all reasonable hours; [and11(d)] 4. The municipality by such duly authorized representatives as 12 aforesaid shall have full power to investigate into and order the owner 13 of such multiple dwelling to furnish such reports and information as it 14 may require concerning such rehabilitation or improvement and shall have 15 full power to audit the books of said owner with respect to such 16 matters; and 17 [(e)] 5. The owner will submit to the supervising agency annually a 18 statement of the income and expenses of such multiple dwelling, in such 19 form as shall be approved by such agency. 20 [2. No such loan shall be made by a municipality unless such owner21executed an affidavit that he was unable to obtain financing for such22rehabilitation or improvement because of the neighborhood, the age of23the building, or other factors indicating an inability of the private24sector unaided to cause such rehabilitation or improvement to be made.] 25 § 18. The article heading of article 8-B of the private housing 26 finance law, as added by chapter 786 of the laws of 1987, is amended to 27 read as follows: 28 LOANS TO [OWNER-OCCUPANTS] OWNERS OF ONE TO FOUR UNIT 29 PRIVATE AND MULTIPLE DWELLINGS 30 § 19. Section 470 of the private housing finance law, as amended by 31 chapter 200 of the laws of 1997, is amended to read as follows: 32 § 470. Policy and purposes of article. It is hereby declared and found 33 that there exists in municipalities within the state substandard and 34 unsanitary areas and neighborhoods containing deteriorated [owner-occu-35pied] one to four unit private and multiple dwellings, and that the 36 rehabilitation or preservation of such dwellings is necessary in order 37 to aid in the prevention and elimination of slums and blight in such 38 areas and neighborhoods. 39 It further is found that there exists in such municipalities a seri- 40 ously inadequate supply of safe and sanitary [owner-occupied] one to 41 four unit private and multiple dwellings, particularly for persons of 42 low and moderate income, that existing non-compliance with local housing 43 codes and with the multiple dwelling law and the multiple residence law 44 threatens to decrease such supply, and that the rehabilitation, preser- 45 vation and improvement of such dwellings is necessary to arrest such 46 conditions of deterioration. 47 It further is found that the elimination of such conditions by reha- 48 bilitation or other improvements cannot be readily provided without 49 public aid in the form of low interest loans or grants to [low and50moderate income owner-occupants] owners of such one to four unit dwell- 51 ings. 52 The rehabilitation, preservation or other improvements of such dwell- 53 ings [owned and occupied by low and moderate income persons or fami-54lies,] is hereby declared a public purpose and a municipal purpose for 55 which public monies may be loaned or granted.A. 3669--A 12 1 In order, further, to promote the preservation and rehabilitation of 2 such dwellings, it is hereby declared that additional provisions should 3 be made to provide public monies for interest reduction subsidies for 4 private loans made by private investors for such rehabilitation. 5 The necessity in the public interest for the provisions of this arti- 6 cle is hereby declared as a matter of legislative determination. 7 § 20. Subdivisions 6 and 9 of section 471 of the private housing 8 finance law are REPEALED and subdivisions 7, 8, 10, 11, and 12 are 9 renumbered 6, 7, 8, 9 and 10. 10 § 21. Subdivision 7 of section 471 of the private housing finance law, 11 as amended by chapter 200 of the laws of 1997, and as renumbered by 12 section twenty of this act, is amended to read as follows: 13 7. "Owner" shall mean an individual or individuals, a partnership, a 14 corporation or other entity, including but not limited to a trust, or a 15 joint tenancy, tenancy in common or tenancy by the entirety holding 16 record or beneficial title in fee simple to an existing private or 17 multiple dwelling and the real property upon which it is situated, or 18 the lessee thereof under a lease having an unexpired term of at least 19 thirty years. "Owner" shall be deemed to also include a cooperative 20 corporation or a condominium association. 21 § 22. Section 472 of the private housing finance law, as added by 22 chapter 786 of the laws of 1987, subdivision 1 as amended by chapter 479 23 of the laws of 2005, subdivision 2 as amended by chapter 408 of the laws 24 of 2009, subdivision 3 as amended by chapter 84 of the laws of 2001, and 25 subdivision 7 as added by chapter 705 of the laws of 1991, is amended to 26 read as follows: 27 § 472. Loans to [owner-occupants] owners. 1. Notwithstanding the 28 provisions of any general, special or local law, a municipality, acting 29 through an agency, is authorized: 30 (a) to make, or contract to make, loans to [low and moderate income31owner-occupants] owners of one to four unit existing private or multiple 32 dwellings within its territorial limits, subject to the limitation of 33 subdivisions two through seven of this section, in such amounts as shall 34 be required for the rehabilitation, improvement or acquisition of such 35 dwellings[,] provided, [however, that such loans shall not exceed sixty36thousand dollars per dwelling unit. Such] that any such rehabilitation 37 or improvement may include climate resiliency improvements. Such loans 38 may also be made exclusively for or include the refinancing of the 39 outstanding indebtedness of such dwellings, and the municipality may 40 make temporary loans or advances to such [owner-occupants] owners in 41 anticipation of permanent loans for such purposes; and 42 (b) to make or contract to make grants to any owner described in para- 43 graph (a) of this subdivision, on the same terms as permitted under such 44 paragraph for a loan. 45 1-a. As used in this article, the term "loan" shall include any grant 46 made by a municipality pursuant to this section, provided, however, that 47 provisions of this article concerning the repayment or forgiveness of, 48 or security for, a loan shall not apply to any grant made pursuant to 49 this article. 50 2. Each loan shall be evidenced by a note executed by the [owner-occu-51pant] owner of the existing dwelling. Repayment of each such note shall 52 be within a period of [the probable life of the existing dwelling which53is hereby determined to be thirty years, or such shorter period as the54agency shall determine] thirty-five years, provided that such period may 55 be extended and shall be repaid within thirty-five years. The repayment 56 shall be made in such manner as may be provided in such note andA. 3669--A 13 1 contract, if any, in connection with such loan, and may authorize such 2 [owner-occupant] owner, with the consent of the agency, to prepay the 3 principal of the loan subject to such terms and conditions as therein 4 provided. In order to make any such loan affordable to the [owner-occu-5pant] owner, the agency may provide in such note and contract that all 6 of the outstanding principal of said loan may be self-liquidated over a 7 [fifteen year] period of [owner-occupancy] not less than fifteen years 8 of continuous compliance by the owner with a regulatory agreement or 9 other restrictive covenant with or approved by the agency and upon the 10 satisfaction of any additional conditions specified therein. Such note 11 and contract may contain such other terms and provisions not inconsist- 12 ent with the provisions of this article as the agency may deem necessary 13 or desirable to secure repayment of the loan, the interest thereon, if 14 any, and other charges in connection therewith, and to carry out the 15 purposes and provisions of this article. 16 3. The agency in its discretion may require that the [owner-occupant] 17 owner execute, acknowledge and deliver a uniform commercial code financ- 18 ing statement for the real property improvement to be in such form as 19 the agency shall specify and in accordance with the requirements of 20 section 9--502 of the uniform commercial code of the state of New York. 21 Said financing statement shall be filed or recorded without charge in 22 accordance with the provisions of paragraph one of subsection (a) of 23 section 9--501 of the uniform commercial code, and from the date of such 24 filing the municipality shall have a lien against said real property 25 improvement for the amount advanced or so much thereof as remains unpaid 26 together with the interest thereon. Upon payment of all sums advanced by 27 the municipality and interest thereon, and upon demand of the then 28 record owner of the real property, the agency shall deliver a copy of 29 the financing statement with an endorsement thereon that the lien is 30 satisfied. Upon filing of such copy in the office where the financing 31 statement was filed and upon payment of the proper fee therefor, the 32 lien of such financing statement shall be discharged. 33 4. The agency may require the [owner-occupant] owner to execute a 34 mortgage as security for a loan in lieu of or in addition to a financing 35 statement as provided in subdivision three of this section. Such mort- 36 gage shall contain such terms and provisions not inconsistent with the 37 provisions of this article as the agency shall deem necessary or desira- 38 ble to secure repayment of the loan. 39 5. Loans may be made with respect to a one to four unit private or 40 multiple dwelling encumbered by mortgages, provided no mortgage is in 41 default, except if such default shall be remedied by the proposed reha- 42 bilitation or improvement. 43 6. The agency may charge the [owner-occupant] owner of such existing 44 private or multiple dwelling reasonable fees for administration, financ- 45 ing, regulation, supervision and audit. 46 7. In making a loan under this article, an agency shall have the power 47 to participate in a loan made by any private investor[, provided that48the portion of the loan funded by the agency shall not exceed an amount49equal to seventy-five percent of the total loan.] The agency may enter 50 into an agreement with a private investor to deposit funds with such 51 private investor to cover the agency's participation in loans to 52 [owner-occupants] owners of one to four unit existing private and multi- 53 ple dwellings with such funds advanced by such private investor to 54 [owner-occupants] owners of existing dwellings. The portion of the loan 55 funded by the agency may be equal to or subordinate in lien to the 56 portion of the loan funded by the private investor and the note andA. 3669--A 14 1 contract may contain such terms with respect to interest rate, if any, 2 and time of payment of principal and interest as determined by the agen- 3 cy. The agency may make provision, either in the mortgage or mortgages 4 or by separate agreement, for the performance by the private investor of 5 such services as are generally performed by a banking institution which 6 itself holds a mortgage, including, without limitation, construction 7 loan advances, construction supervision, initiation of foreclosure 8 proceedings, procurement of insurance, and all other matters in 9 connection with the financing, supervision, regulation and audit of any 10 such loan. In order to make the loan affordable to the [owner-occupant] 11 owner, the agency may provide an interest reduction subsidy pursuant to 12 section four hundred seventy-five of this article, or may provide that 13 all or part of the agency's portion of the outstanding principal of any 14 such participation loan may be self-liquidated over a fifteen year peri- 15 od of [owner-occupancy] not less than fifteen years of continuous 16 compliance by the owner with a regulatory agreement or other restrictive 17 covenant with or approved by the agency and upon the satisfaction of any 18 additional conditions specified therein. 19 § 23. Subdivisions 1 and 2 of section 473 of the private housing 20 finance law, as added by chapter 786 of the laws of 1987, are amended to 21 read as follows: 22 1. No such loan shall be made to an [owner-occupant] owner of an 23 existing private or multiple dwelling unless the [owner-occupant] owner 24 of such private or multiple dwelling shall covenant in writing that so 25 long as any part of such loan shall remain unpaid or for a period of at 26 least ten years from the date of the loan, whichever is later: (i) the 27 [owner-occupant] owner or managing agent or operator of such dwelling 28 shall permit the duly authorized officers, employees, agents or inspec- 29 tors of the agency to enter in or upon and inspect such private or 30 multiple dwelling at all reasonable hours; (ii) the agency by such duly 31 authorized representatives as aforesaid shall have full power to inves- 32 tigate into and order the [owner-occupant] owner of such dwelling to 33 furnish such reports and information as it may require concerning such 34 rehabilitation or improvement and shall have full power to audit the 35 books of said owner with respect to such matters; and (iii) if the prop- 36 erty to be rehabilitated is a multiple dwelling, the [owner-occupant] 37 owner will submit to the agency annually a statement of income and 38 expenses of such dwelling, in such form as shall be approved by the 39 agency. 40 2. A municipality shall neither make nor participate in a loan to an 41 [owner-occupant] owner of an existing private or multiple dwelling 42 pursuant to this article unless the agency finds that the area in which 43 such dwelling is situated is a blighted, deteriorated or deteriorating 44 area or has a blighting influence on the surrounding area, or is in 45 danger of becoming a slum or a blighted area because of the existence of 46 substandard, unsanitary, deteriorating or deteriorated conditions, an 47 aged housing stock, or other factors indicating an inability of the 48 private sector to cause such rehabilitation to be made. 49 § 24. Subdivision 2 of section 474 of the private housing finance 50 law, as added by chapter 786 of the laws of 1987, is amended to read as 51 follows: 52 2. The agency is authorized to make provision in the note and loan 53 agreement or by separate agreement for the servicing of such loans by a 54 loan servicing company or other qualified entity, as determined by the 55 agency, and such services may include, but not be limited to, the 56 collection of the debt services on such loans and the establishment,A. 3669--A 15 1 administration, and distribution of an escrow account for the payment of 2 the [owner-occupant's] owner's real estate taxes, sewer and water rents 3 and fire insurance. 4 § 25. Section 475 of the private housing finance law, as added by 5 chapter 786 of the laws of 1987, is amended to read as follows: 6 § 475. Interest reduction subsidies. Notwithstanding the provisions of 7 any general, special or local law, a municipality, acting through an 8 agency, is authorized to provide, or contract to provide, interest 9 reduction subsidies for loans made by private investors to [low and10moderate income owner-occupants] owners of one to four unit existing 11 private or multiple dwellings within its territorial limits, if such 12 [owner-occupants] owners would have been eligible under the provisions 13 of this article for a loan made by the municipality pursuant to this 14 article. 15 § 26. The private housing finance law is amended by adding two new 16 sections 610 and 611 to read as follows: 17 § 610. Rent stabilization and regulatory agreements. 1. Notwithstand- 18 ing any other provision of law, including the provisions of, or any 19 regulation promulgated pursuant to, the emergency tenant protection act 20 of nineteen seventy-four or the rent stabilization law of nineteen 21 hundred sixty-nine, the state division of housing and community renewal, 22 when supervising housing accommodations under provisions of law other 23 than the emergency tenant protection act of nineteen seventy-four or the 24 rent stabilization law of nineteen hundred sixty-nine, the New York city 25 department of housing preservation and development, the New York state 26 urban development corporation, the New York state housing finance agen- 27 cy, the New York state housing trust fund, and the New York city housing 28 development corporation, or such other state or municipal agency, poli- 29 tical subdivision, public benefit corporation, or instrumentality as 30 the state division of housing and community renewal shall identify, may, 31 by agreement with an owner of a multiple dwelling, subject any housing 32 accommodation in such multiple dwelling to the emergency tenant 33 protection act of nineteen seventy-four or the rent stabilization law of 34 nineteen hundred sixty-nine, or both, if applicable to the municipality. 35 The requirements of such agreement shall supplement any requirements 36 imposed on such housing accommodation pursuant to any other provisions 37 of law. 38 2. Any agreement between a state or municipal agency, political subdi- 39 vision, public benefit corporation, or instrumentality described in 40 subdivision one of this section and an owner of a multiple dwelling that 41 contains provisions that are consistent with subdivision one of this 42 section and that is in effect as of the effective date of this section 43 is and will remain valid and enforceable. 44 § 611. Compliance monitoring. 1. Any supervising agency and any public 45 benefit corporation created pursuant to this chapter shall have the 46 power to: (a) subpoena, require the attendance of and examine and take 47 testimony under oath of such persons as it deems necessary to monitor, 48 and enforce compliance with, a note, mortgage, other financing agree- 49 ment, regulatory agreement, deed, land disposition agreement, or other 50 restrictive covenant with or approved by such agency or corporation and 51 entered into in connection with an action taken pursuant to this chap- 52 ter, the general municipal law, the real property tax law, or the New 53 York city zoning resolution; and (b) subpoena and require the production 54 of books, accounts, papers, documents and other evidence related to such 55 monitoring and enforcement.A. 3669--A 16 1 2. Any person who has been issued a subpoena, or any other require- 2 ment to testify or produce books and records, pursuant to subdivision 3 one of this section, shall be required to comply with such subpoena or 4 other requirement within a reasonable period of time established by the 5 supervising agency or public benefit corporation that issued such 6 subpoena. Each day in which a person fails to comply with such subpoena, 7 or with any other such requirement to testify or produce books and 8 records, shall constitute a separate violation of this section. The 9 civil penalty for each such violation shall be not more than two hundred 10 fifty dollars, provided that such penalty shall not apply to any period 11 during which such subpoena or other requirement to testify or produce 12 books and records is the subject of a pending judicial proceeding 13 commenced prior to the expiration of the period of time established by 14 such supervising agency or public benefit corporation for compliance 15 with such subpoena or other requirement to testify or produce books and 16 records. 17 3. Any such supervising agency or public benefit corporation may 18 promulgate rules and regulations to carry out the provisions of this 19 section. 20 § 27. Section 800 of the private housing finance law, as amended by 21 chapter 456 of the laws of 2003, is amended to read as follows: 22 § 800. Policy and purposes of article. It is hereby declared and found 23 that there exists in municipalities in this state substandard and insan- 24 itary areas and neighborhoods characterized by undermaintained and dete- 25 riorating housing accommodations and under-utilized non-residential 26 buildings and under-utilized vacant land. It is further found that there 27 exists in such municipalities a diminishing and seriously inadequate 28 supply of safe and sanitary dwelling accommodations, particularly for 29 persons of low income; that the loss of housing accommodations is caused 30 by the inability of the ordinary unaided operations of private enter- 31 prise to make loans for rehabilitation or construction purposes or for 32 conversion which accelerates the process of deterioration and abandon- 33 ment, turning active and viable neighborhoods into slums and blighted 34 areas; and that the prevention of deterioration and loss through aban- 35 donment can only be achieved by the elimination of conditions which are 36 unsafe or detrimental to health, the replacement of antiquated heating, 37 plumbing, and electrical systems and, where necessary, the overall reha- 38 bilitation of certain housing accommodations, the construction of new 39 housing accommodations on vacant land and the conversion of under-uti- 40 lized non-residential property to residential use, and that the unavail- 41 ability of funds for the conversion of under-utilized property to resi- 42 dential use, for the preservation and rehabilitation of housing 43 accommodations and for the construction of new housing accommodations on 44 vacant land constitutes a threat to the health, safety and well-being of 45 the persons who occupy them and denies to others the possibility of 46 living in safe and sanitary housing accommodations. 47 In order to promote the preservation and rehabilitation of such hous- 48 ing accommodations, the creation of new housing accommodations by the 49 conversion of under-utilized non-residential property into multiple 50 dwellings and the construction of new housing accommodations on vacant 51 land in such areas and to encourage the investment of private capital in 52 such areas, provision should be made for a municipality to attract 53 private investment for such purposes by utilizing funds, which are 54 available from the federal government through specific or discretionary 55 grants, or are available from other financing sources, for joint partic- 56 ipation loans with private investors, or loans or grants by the munici-A. 3669--A 17 1 pality, to effect the required construction, rehabilitation or conver- 2 sion. 3 The necessity in the public interest for the provisions hereinafter 4 enacted is hereby declared as a matter of legislative determination. 5 § 28. Subdivision 5 of section 801 of the private housing finance law, 6 as amended by chapter 456 of the laws of 2003, is amended to read as 7 follows: 8 5. "Owner" shall mean an individual, partnership, corporation or other 9 entity, including a non-profit company, a mutual company, or a housing 10 development fund company, which holds record or beneficial title in fee 11 simple to the existing multiple dwelling to be rehabilitated or the 12 non-residential property to be converted into a multiple dwelling and 13 the real property upon which it is situate or to vacant land upon which 14 the new multiple dwelling is to be constructed, or is the lessee of any 15 such real property having an unexpired term of at least thirty years. 16 § 29. Section 801 of the private housing finance law is amended by 17 adding a new subdivision 5-a to read as follows: 18 5-a. "Participation loan" and the municipality's "participation" in, 19 "portion" of, or "investment" in a loan, or words of similar meaning, 20 shall mean any loan or grant made by the municipality or the New York 21 city housing development corporation pursuant to this article either 22 with or without a private investor, provided, however, that provisions 23 of this article concerning the repayment or forgiveness of, or security 24 for, a loan shall not apply to any grant made pursuant to this article. 25 § 30. Subdivision 6 of section 801 of the private housing finance law, 26 as amended by chapter 456 of the laws of 2003, is amended to read as 27 follows: 28 6. "Private investor" shall mean one or more banking organizations, 29 foundations, labor unions, credit unions, employers' associations, 30 veterans' organizations, colleges, universities, educational insti- 31 tutions, child care institutions, hospitals, medical research insti- 32 tutes, insurance companies, trustees or fiduciaries, trustees of pension 33 and retirement funds and systems, corporations, partnerships, individ- 34 uals or other entities or any combination of the foregoing, and shall 35 include the United States of America and the state of New York and any 36 [of its agencies acting as a lender under the loan program pursuant to37section three hundred twelve of the housing act of nineteen hundred38sixty-four and any amendments thereto or any similar program] agency, 39 office or public benefit corporation thereof. As used in this subdivi- 40 sion, the terms "trustees" and "fiduciaries" shall include any fiduciary 41 or fiduciaries holding funds for investment, and the term "banking 42 organizations" shall have the same meaning as in subdivision eleven of 43 section two of the banking law. 44 § 31. Subdivisions 1, 3 and 4 of section 802 of the private housing 45 finance law, subdivisions 1 and 3 as amended by chapter 456 of the laws 46 of 2003 and subdivision 4 as added by chapter 822 of the laws of 1976, 47 are amended to read as follows: 48 1. (a) Notwithstanding the provisions of any general, special or local 49 law, one or more private investors and a municipality, acting through 50 its agency, shall have the power to participate and invest in making 51 loans to the owners of existing multiple dwellings or to the owners of 52 non-residential property or to the owners of vacant land subject to the 53 limitations of subdivisions two through seven of this section, in such 54 amounts as shall be required for (i) the rehabilitation of such existing 55 multiple dwellings or for the conversion of such non-residential proper- 56 ty or for the construction of a new multiple dwelling on such vacantA. 3669--A 18 1 land, provided that such rehabilitation, conversion or construction may 2 include climate resiliency improvements, and if any such owner acquires 3 the existing multiple dwelling or the non-residential property or the 4 vacant land for the purpose of such rehabilitation, conversion or 5 construction or owns the existing multiple dwelling or the non-residen- 6 tial property or the vacant land subject to an outstanding indebtedness, 7 such loans may be made exclusively for or may include such amounts as 8 may be required for the cost of such acquisition or for the refinancing 9 of such outstanding indebtedness, (ii) providing site improvements 10 located on the property on which such existing multiple dwellings are 11 located or on such non-residential property or vacant land or in a 12 public right-of-way, including, but not limited to, water and sewer 13 facilities, sidewalks, landscaping, parks and open space, social, recre- 14 ational, communal and other non-residential facilities and the outfit- 15 ting thereof, the curing of problems caused by abnormal site conditions, 16 excavation and construction of footings and foundations and other 17 improvements associated with the provision of infrastructure for housing 18 accommodations, or (iii) providing for other costs of developing housing 19 accommodations, and such private investors and a municipality may joint- 20 ly participate or invest in the making of temporary loans or advances to 21 such owners in anticipation of the permanent participation loans for 22 such purposes. 23 (b) Notwithstanding the provisions of any general, special or local 24 law, and in addition to the power to make or contract to make partic- 25 ipation loans granted by paragraph (a) of this subdivision, the munici- 26 pality, acting through its agency, and the New York city housing devel- 27 opment corporation shall each have the power to make or contract to make 28 loans or grants to any owner described in paragraph (a) of this subdivi- 29 sion without the participation of a private investor, on the same terms 30 as permitted under such paragraph for a participation loan. 31 3. [(a)] Each participation loan shall be secured by a bond or note 32 and single participating mortgage or by separate bonds or notes and 33 mortgages upon any portion or all of the existing multiple dwelling or 34 the non-residential property and the land upon which it is situated or 35 in the case of the construction of a new multiple dwelling, upon any 36 portion or all of the vacant land and the multiple dwelling to be 37 constructed, provided that each such loan shall be made upon such terms 38 and conditions as may be approved by the agency, including but not 39 limited to provisions that [(i)] (a) priority may be given to the 40 payment of the principal of and interest on that portion of the mortgage 41 indebtedness attributable to participation in the loan by one or more 42 private investors, [(ii)] (b) the interest of the municipality created 43 as a result of making such a mortgage loan may be subordinated to the 44 interest that one or more of such private investors may have upon such 45 participation, [(iii)] (c) the interest of each upon such participation 46 need not be of equal priority as to lien nor be equal as to interest 47 rate, time or rate of amortization of principal or time of payment of 48 interest, or otherwise, [(iv)] (d) the bond or note and mortgage may 49 provide that the municipality's portion of a participation loan made to 50 an owner shall be reduced to zero commencing in the fifteenth year after 51 the execution of the bond or note and mortgage, provided that, as of the 52 date of any such reduction, such multiple dwelling has been and contin- 53 ues to be owned and operated in a manner consistent with a regulatory 54 agreement with the municipality. Notwithstanding such provision as 55 contained in the bond or note and mortgage, the municipality's portion 56 of the loan shall be reduced to zero only if, prior to or simultaneouslyA. 3669--A 19 1 with delivery of such bond or note and mortgage, the agency made a writ- 2 ten determination that such reduction would be necessary to ensure the 3 continued affordability or economic viability of the multiple dwelling. 4 Such written determination shall document the basis upon which the loan 5 was determined to be eligible for evaporation. 6 [(b) The aggregate amount of each such participation loan shall not7exceed the cost of the rehabilitation, conversion or construction, plus8the costs of any or all undertakings necessary for the planning, financ-9ing, acquisition, satisfaction of tax liens and other municipal liens10and encumbrances, construction, equipment and development in connection11therewith, provided that, if any portion of such loan is used for the12cost of acquisition or for refinancing, the amount of a municipality's13portion of such loan shall not exceed one and one-half times the cost of14rehabilitation, conversion or construction.15(c) The amount of any such loan, together with the amount of all prior16liens and encumbrances, shall not exceed, except in the case of a loan17made to a non-profit company, a mutual company, or a housing development18fund company, ninety per centum of value unless the agency makes a writ-19ten determination that the owner has insufficient resources to pay for20the remaining ten per centum of value, in which case such loan shall not21exceed ninety-five per centum of value. The amount of any such loan,22together with the amount of all prior liens and encumbrances, made to a23non-profit company, a mutual company, or a housing development fund24company shall not exceed value, provided that when after completion of25such rehabilitation, conversion or construction, such multiple dwelling26is, or is to be operated, exclusively for the benefit of persons and27families who are entitled to occupancy by reason of ownership of stock28in the corporate owners, such loan shall not exceed ninety-eight per29centum of value unless the agency makes a written determination that the30owner has insufficient resources to pay for the remaining two per centum31of value, in which case such loan shall not exceed value.] 32 4. Each such bond or note and mortgage or bonds or notes and mortgages 33 shall be repaid over or within a period of [thirty] thirty-five years, 34 provided that such period may be extended and shall be repaid within 35 thirty-five years, in such manner as may be provided in such bond or 36 note and mortgage or bonds or notes and mortgages [but in no case shall37the term of such loan exceed the probable life of the multiple dwelling38which is hereby determined to be thirty years]. Such bond or note and 39 mortgage or bonds or notes and mortgages and any contract in connection 40 with such permanent and temporary loans may contain such other terms and 41 provisions not inconsistent with the provisions of this article as the 42 local legislative body or the agency may deem necessary or desirable to 43 secure repayment of the loan, the interest thereon and other charges in 44 connection therewith and to carry out the purposes and provisions of 45 this article. 46 § 32. Subdivisions 2, 3 and 6 of section 1151 of the private housing 47 finance law, subdivision 2 as amended by chapter 567 of the laws of 1993 48 and subdivisions 3 and 6 as added by chapter 639 of the laws of 1989, 49 are amended to read as follows: 50 2. "Eligible project" shall mean a project intended to construct new 51 housing accommodations on an eligible site by new construction or 52 substantial rehabilitation, provided that such new construction or 53 substantial rehabilitation may include climate resiliency improvements. 54 An eligible project shall serve the needs of persons of low income, 55 including privately-owned one to four family dwellings, condominiums and 56 cooperatives, and rental projects.A. 3669--A 20 1 3. ["Development costs" shall mean the reasonable and necessary costs2for planning, financing, acquisition of land or buildings and3construction of new buildings or the reconstruction, rehabilitation,4repair or remodeling of existing buildings and the costs of necessary5site improvements] "Participation loan" and the city's "participation" 6 in, "portion" of, or "investment" in a loan, or words of similar mean- 7 ing, shall mean any loan or grant made by the agency pursuant to this 8 article either with or without a private lender, provided, however, that 9 provisions of this article concerning the repayment or forgiveness of, 10 or security for, a loan shall not apply to any grant. 11 6. "Loan" shall mean a [first] mortgage loan made by a private lender 12 in participation with the city of New York to a sponsor for the purpose 13 of construction of an eligible project including a loan in which the 14 portion of the loan funded by the agency is represented by a separate 15 note and mortgage. 16 § 33. Section 1152 of the private housing finance law, as added by 17 chapter 639 of the laws of 1989, subdivision 4 as amended and subdivi- 18 sion 13 as added by chapter 241 of the laws of 1998, subdivision 12 as 19 added by chapter 400 of the laws of 1994, and paragraph e of subdivision 20 12 as amended by chapter 118 of the laws of 2003, is amended to read as 21 follows: 22 § 1152. Affordable housing development loans. 1. (a) Notwithstanding 23 the provisions of any general, special or local law, one or more private 24 lenders and the city of New York, acting through the agency shall have 25 the power to participate and invest in making loans to sponsors for the 26 construction of eligible projects. Such loans may be made exclusively 27 for or may include such amounts as may be required for site acquisition 28 or the refinancing of eligible projects. Each such participation loan 29 shall be secured by a bond or note and single participating mortgage or 30 by separate bonds or notes and mortgages upon all or any portion of the 31 eligible project. Such bond or note and mortgage or bonds or notes or 32 mortgages may contain such other terms and provisions not inconsistent 33 with the provisions of this article as the agency may deem necessary or 34 desirable. 35 (b) Notwithstanding the provisions of any general, special or local 36 law, and in addition to the power to make or contract to make partic- 37 ipation loans granted by paragraph (a) of this subdivision, the city of 38 New York, acting through the agency, shall have the power to make or 39 contract to make loans or grants to any owner described in paragraph (a) 40 of this subdivision without the participation of a private lender, on 41 the same terms as permitted under such paragraph for a participation 42 loan. 43 2. [The portion of such loan funded by the agency shall not exceed an44amount equal to sixty percent of the actual total development cost of an45eligible project.] The agency may enter into an agreement with a private 46 lender to deposit its share of a loan with the private lender to be 47 advanced by the private lender. The portion of the loan funded by the 48 agency may be equal to or subordinate in lien to the portion of the loan 49 funded by the private lender and may contain such terms with respect to 50 interest rate, if any, rate of amortization of principal, if any, and 51 time of payment of interest and principal as determined by the agency. 52 The agency may make provision either in the mortgage or mortgages or by 53 separate agreement for the performance by the private lender of such 54 services as are generally performed by a banking institution which 55 itself holds a mortgage, including, without limitation, construction 56 loan advances, construction supervision, initiation of foreclosureA. 3669--A 21 1 proceedings, procurement of insurance, and all other matters in 2 connection with the financing, supervision, regulation and audit of any 3 such loan to any such eligible project. 4 3. [If a portion of the loan is to be utilized for acquisition of an5eligible site such portion shall in no event exceed fifteen percent of6the total amount of such loan or the appraised value of the site, which-7ever is the lesser.84.] If the eligible project is to consist of one to four unit dwelling 9 accommodations or cooperative or condominium units, the agency's share 10 of the loan may be converted after completion of construction into mort- 11 gages on such dwelling accommodations or condominium units or financing 12 statements filed with respect to such cooperative shares, provided such 13 units or such cooperative shares are purchased by persons of [eligible] 14 low income. Such mortgages and any blanket mortgage that the agency 15 retains on any portion of, or on all of, the eligible project may 16 provide that [they] such mortgages and such blanket mortgage will auto- 17 matically be reduced to zero over a period of continuous [owner-occupan-18cy of the housing accommodations assisted by such loan] compliance by 19 the mortgagee with a regulatory agreement or other restrictive covenant 20 with or approved by the agency and upon the satisfaction of any addi- 21 tional conditions specified therein. Notwithstanding such provision as 22 contained in such mortgage, the loan shall be reduced to zero only if, 23 prior to or simultaneously with delivery of such mortgage, the agency 24 made a written determination that such reduction would be necessary to 25 ensure the continued affordability or economic viability of the eligible 26 project. Such written determination shall document the basis upon which 27 the loan was determined to be eligible for evaporation. Such period of 28 continuous [owner-occupancy] compliance with such regulatory agreement 29 or other restrictive covenant shall not be less than fifteen years. 30 [5.] 4. If the eligible project is to consist of one to four unit 31 dwelling accommodations or cooperative or condominium units, the agency 32 shall require that the dwelling units be offered only to bona fide 33 purchasers who intend to occupy a unit as their principal place of resi- 34 dence; provided, however, that in the case of two to four unit dwelling 35 accommodations the bona fide purchaser may occupy only a single unit as 36 a principal place of residence. If the purchaser ceases to occupy the 37 unit as a principal place of residence, the agency may provide for 38 recapture of all or a portion of the agency's share of the loan. 39 [6.] 5. If the eligible project is a rental project, the agency's 40 share of the loan may be converted after completion of construction into 41 a [non-interest bearing, non-amortizing thirty year loan] permanent loan 42 with a term of thirty-five years, provided that such period may be 43 extended and shall be repaid within thirty-five years, payable [at the44end of its term, provided that such loan shall be also payable out of45profits upon any sale or refinancing of the project prior to the end of46such thirty year period] in such manner as may be provided in the note 47 and any mortgage in connection with such loan. Such note and mortgage 48 may contain such terms and conditions as the agency may deem necessary 49 or desirable to effectuate the purposes and provisions of this article. 50 The sponsor or any subsequent owner or owners of such a project shall 51 agree to rent such units only to persons of [eligible] low income for 52 such [thirty year] period [and shall agree that all] as the agency may 53 determine. All such units shall be subject to the emergency tenant 54 protection act of nineteen seventy-four and the rent stabilization law 55 of nineteen hundred sixty-nine, as amended [for a period of thirty years56after initial occupancy], unless converted to a cooperative or condomin-A. 3669--A 22 1 ium pursuant to subdivision [eight] seven of this section. [At the end2of such period each unit shall continue to be subject to such law there-3after until the first vacancy occurs at which time the unit shall be4decontrolled.] Initial rentals for all rental units shall be set by the 5 agency. 6 [7.] 6. If the eligible project is a rental project annual profits 7 shall be limited to an amount set by the agency for as long as the loan 8 is outstanding. Excess profits shall be used to establish project 9 reserves, provide capital improvements or reduce the principal amount of 10 the agency's loan, as determined by the agency. 11 [8.] 7. If the eligible project is a rental project, no conversion to 12 a cooperative or condominium shall be permitted for a period of twenty 13 years after initial occupancy, and unless (i) the agency's share of the 14 loan is prepaid upon such conversion, (ii) the conversion shall be done 15 pursuant to section three hundred fifty-two-eeee of the general business 16 law as a non-eviction plan, and (iii) apartments occupied by non-pur- 17 chasing tenants continue to be subject to the rent stabilization law of 18 nineteen hundred sixty-nine as amended, until the occurrence of a vacan- 19 cy. 20 [9.] 8. A loan made pursuant to this article shall be exempt from the 21 mortgage recording taxes imposed by article eleven of the tax law. 22 [10.] 9. Notwithstanding the provisions of any general, special or 23 local law or charter, the agency shall have power, without soliciting 24 competing bids, to contract with any sponsor or to make provision in a 25 loan for the construction or reconstruction of any site improvements 26 located in the public right-of-way or on the eligible site which are 27 necessary for the development of an eligible project. Such site improve- 28 ments may include, but shall not be limited to, streets, sidewalks, 29 landscaping, parks and open space, social, recreational, communal and 30 other non-residential facilities and the outfitting thereof, lighting 31 fixtures, and water and sewer lines. 32 [11.] 10. No loan shall be made pursuant to the provisions of this 33 article unless the agency finds that: (a) the construction of the eligi- 34 ble project does not directly displace current low and moderate income 35 residents of the eligible site; (b) the eligible project leverages 36 private and other public investment, if any, so as to reduce the amount 37 of assistance provided pursuant to this article to the minimal amount 38 which is necessary for construction of the eligible project; (c) the 39 eligible project will be built by a private developer/builder who has 40 agreed to limit its profit in accordance with a formula satisfactory to 41 the agency; (d) the eligible project will provide assistance to an area 42 which is blighted or deteriorated or has a blighting influence on the 43 surrounding area, or is in danger of becoming a slum or a blighted area 44 because of neighborhood conditions indicating an inability or unwilling- 45 ness of the private sector to cause the type of construction for which a 46 loan is to be provided; and (e) the eligible project will make home 47 ownership or rental housing affordable to persons who cannot presently 48 afford the housing available based upon the ordinary unaided operation 49 of private enterprise. 50 [12.] 11. a. The agency may make non-interest bearing advances to 51 sponsors to defray the pre-development costs of eligible projects in 52 accordance with the provisions of this chapter. 53 b. No such advances shall be made unless the agency finds that: (i) 54 the sponsor proposes to finance the eligible project in whole or in part 55 by a loan granted pursuant to this article or that the project, if 56 otherwise financed, will provide housing for persons or families of lowA. 3669--A 23 1 income, and that such project is otherwise consistent with the purposes 2 of this article; (ii) the project site is suitable, there is a need for 3 the housing type proposed in the area to be served and the project is 4 feasible; and (iii) it is reasonable to anticipate that financing will 5 be obtained and the agency makes a finding to that effect. 6 c. No such advances may be made to a sponsor unless such sponsor 7 enters into an agreement with the agency which provides that such spon- 8 sor shall be regulated with respect to rents, profits, dividends and 9 disposition of its property or franchise, in accordance with the 10 provisions of this article. 11 d. An advance granted pursuant to this section shall be used only to 12 defray the pre-development costs of eligible projects. For purposes of 13 this subdivision, the term pre-development costs shall include, but 14 shall not be limited to: the reasonable and necessary costs for plan- 15 ning, site preparation, developing architectural drawings and conducting 16 engineering and environmental studies, but shall not include acquisition 17 of land or buildings, drainage and landscaping of vacant land, 18 construction of new buildings or the reconstruction or rehabilitation of 19 existing buildings. 20 e. Each such advance shall be repaid in full to the agency by the 21 sponsor. Such repayment shall be made upon receipt by the sponsor or its 22 successor in interest of the proceeds of its mortgage or construction 23 loan for the eligible project, unless the agency extends the period for 24 the repayment of such advances. In no event shall the time of repayment 25 be extended to a date later than the date of final advance of funds 26 pursuant to such mortgage or construction loan. Notwithstanding this 27 paragraph, the agency may reduce such advance to zero over a period of 28 continued compliance with the agency's agreement with the sponsor pursu- 29 ant to paragraph c of this subdivision if the agency has made a written 30 determination that such reduction would be necessary to ensure the 31 continued affordability or economic viability of the eligible project. 32 Such written determination shall document the basis upon which the agen- 33 cy's non-interest bearing advance was determined eligible for evapo- 34 ration. 35 f. If the agency, in its discretion, determines at any time that mort- 36 gage or construction financing for the eligible project may not be 37 obtained, then all advances made to the sponsor pursuant to this subdi- 38 vision shall become immediately due and payable upon the demand of the 39 agency. 40 [13.] 12. If the eligible project is a rental project, the bond or 41 note and mortgage or bonds or notes or mortgages issued by the sponsor 42 of any eligible project to secure a participation loan may provide that 43 the city's portion of such loan shall be reduced to zero commencing on 44 the fifteenth year after the execution of such bond or note and mortgage 45 or bonds or notes or mortgages, provided that, as of the date of any 46 such reduction, the eligible project has been and continues to be owned 47 and operated in a manner consistent with a regulatory agreement with the 48 city. Notwithstanding such provision as contained in the bond or note 49 and mortgage or bonds or notes or mortgages, the loan shall be reduced 50 to zero only if, prior to or simultaneously with delivery of such bond 51 or note and mortgage or bonds or notes or mortgages, the agency made a 52 written determination that such reduction would be necessary to ensure 53 the continued affordability or economic viability of the eligible 54 project. Such written determination shall document the basis upon which 55 the loan was determined to be eligible for evaporation.A. 3669--A 24 1 § 34. This act shall take effect immediately, provided, however, that 2 the amendments to subdivision 1 of section 696-a of the general munici- 3 pal law made by section one of this act shall be subject to the expira- 4 tion and reversion of such subdivision pursuant to section 2 of chapter 5 613 of the laws of 1996, as amended, when upon such date the provisions 6 of section two of this act shall take effect.
