Bill Text: NY A06655 | 2023-2024 | General Assembly | Amended
Bill Title: 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.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2023-06-20 - substituted by s2985c [A06655 Detail]
Download: New_York-2023-A06655-Amended.html
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. LBD10921-02-3A. 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-5dations] 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 eachA. 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 beA. 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 period35of occupancy does not exceed six times the rental (including the value36or cost to them of heat, light, water and cooking fuel) of dwelling37units occupied by such persons or families in existing multiple dwell-38ings aided by a loan pursuant to this article, except that in the case39of persons or families with three or more dependents, such ratio shall40not exceed seven to one, and except further that the income limitations41prescribed by this paragraph shall be subject to the provisions of42subdivision two of section four hundred three of this article.43In calculating annual income, social security payments and income44received from private pension funds by any person sixty-two years of age45or more shall be excluded up to a total maximum amount of seventy-five46dollars per month. The term "probable aggregate annual income" means the47annual income of the chief wage earner of the family, plus all other48income of other members of the family over the age of twenty-one years,49plus a proportion of income of gainfully employed members under the age50of twenty-one years, the proportion to be determined by the agency. The51agency may exclude a proportion of the income of other members of the52family over the age of twenty-one years for the purpose of determining53eligibility for commencement of occupancy or continued occupancy, or for54establishing 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 fourA. 6655--A 6 1hundred 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"55value of the multiple dwelling and the land upon which it is situated56prior to such installation, elimination, other rehabilitation orA. 6655--A 7 1improvement referred to in subdivision one of this section plus the2total of all costs of such installation, elimination, rehabilitation or3improvement including, but not limited to, the costs of any or all4undertakings necessary for the planning, financing, tenant relocation,5acquisition, construction, equipment and development in connection ther-6ewith.72-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 the16installation of proper heating facilities, or elimination of conditions17dangerous to human life or detrimental to health, including nuisances as18defined in section three hundred nine of the multiple dwelling law, or19other rehabilitation or improvement provided that, if any portion of20such loan is used for the cost of acquisition of the land and the multi-21ple dwelling or for re-financing, the total amount of such loan shall22not exceed two times the cost of such installation, elimination of such23conditions, rehabilitation or improvement.24(c) The amount of any such loan, together with the amount of all prior25liens and encumbrances, shall not exceed, except in the case of a loan26made to a non-profit company, a mutual company, or a housing development27fund company, ninety per centum of the value of the property, after28completion of the installation of proper heating facilities, or elimi-29nation of such conditions or other rehabilitation or improvement, as30estimated by the agency, unless the agency makes a written determination31that the owner has insufficient resources to pay for the remaining ten32per centum of the value of the property, after completion of such33installation, elimination, or other rehabilitation or improvement, as34estimated by the agency, in which case such loan shall not exceed nine-35ty-five per centum of the value of the property, after completion of the36installation of proper heating facilities, or elimination of such condi-37tions or other rehabilitation or improvement, as estimated by the agen-38cy. The amount of any such loan, together with the amount of all prior39liens and encumbrances, made to a non-profit company, a mutual company,40or a housing development fund company shall not exceed the value of the41property after completion of such installation, elimination, or other42rehabilitation or improvement, as estimated by the agency provided that43when after completion of such installation, elimination or other reha-44bilitation or improvement, such project is, or is to be operated exclu-45sively for the benefit of persons or families who are entitled to occu-46pancy by reason of ownership of stock in the corporate owners, such loan47shall not exceed ninety-eight percentum of the value of the property,48after completion of such installation, elimination, or other rehabili-49tation or improvement, as estimated by the agency, unless the agency50makes a written determination that the owner has insufficient resources51to pay for the remaining two per centum of the value of the property,52after completion of such installation, elimination, or other rehabili-53tation or improvement, as estimated by the agency, in which case such54loan shall not exceed the value of the property, after completion of55such installation, elimination, or other rehabilitation or improvement,56as 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 of7the 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 made15prior to January first, nineteen hundred seventy-eight may, in the16discretion of the agency, be extended to a term up to forty-five years.17The agency may modify the rate and time of payment of interest on the18original loan and the rate and time of amortization of principal in such19manner as required to secure payment of the loan within the extended20term], 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 the42housing rehabilitation fund and shall be used to pay for the expenses of43the municipality in administering and carrying out the provisions of44this 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 the52provisions of paragraph a of subdivision three of section four hundred53one of this article, but not included within the provisions of paragraph54b of such subdivision three, begins occupancy of any dwelling unit in55any multiple dwelling aided by a loan pursuant to this article, and56during the period while such dwelling unit is subject to a maximum rentA. 6655--A 9 1prescribed pursuant to this article, the income of such person or family2increases so as to exceed the applicable maximum prescribed by such3paragraph a by more than fifty per centum, such person shall be subject4to removal from such dwelling with the approval of the agency.53. a. In the event that on the date on which a contract for a loan is6made with respect to a multiple dwelling aided by a loan pursuant to7this article, any person or family occupying a dwelling unit in such8multiple dwelling and included within the provisions of paragraph b of9subdivision three of section four hundred one of this article, has a10probable aggregate annual income, as determined in accordance with the11provisions of paragraph a of such subdivision three, which exceeds the12income limits specified in such paragraph a by more than fifty per cent,13such person or family shall be subject to removal from such dwelling14unit with the approval of the agency upon the expiration of a period of15two years after the date on which such contract is entered into.16b. In the event that at any time within a period of two years after17any such contract is entered into, the income of any such person or18family increases so as to exceed the income limits specified in such19paragraph a by more than fifty per cent, such person or family shall be20subject to removal from such dwelling unit with the approval of the21agency upon the expiration of such period of two years.22c. If, at any time subsequent to the expiration of a period of two23years after any such contract is entered into, and during the period24while the dwelling unit occupied by any such person or family is subject25to a maximum rent prescribed pursuant to this article, the income of26such person or family increases so as to exceed the income limits speci-27fied in such paragraph a by more than fifty per cent, such person or28family shall be subject to removal from such dwelling unit with the29approval of the agency.304.] Any person or family in occupancy[, whether included within the31provisions of paragraph a or paragraph b of subdivision three of section32four hundred one of this article, whose income exceeds the maximum33prescribed by the provisions of such paragraph a with respect to the34time 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 of51this 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 [andA. 6655--A 10 1all 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 paying35rentals or carrying charges not in excess of the average rentals or36carrying charges prevailing in local projects of municipally-aided37limited-profit housing companies aided under article two of this chap-38ter, the occupancy of which commenced on or after May eighteenth, nine-39teen 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 climateA. 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 of23thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of24eliminating such substandard or insanitary condition or conditions, or25effecting such rehabilitation or improvement, whichever is less.] Each 26 such note shall be repaid within a period [of the probable life of the27existing multiple dwelling which is hereby determined to be thirty28years, 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 a52separate fund to be known as the article VIII-A housing rehabilitation53fund and shall be used to help meet the expenses of the municipality in54administering 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; [and21(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 owner31executed an affidavit that he was unable to obtain financing for such32rehabilitation or improvement because of the neighborhood, the age of33the building, or other factors indicating an inability of the private34sector 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-45pied] 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-5pants] 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 and8moderate 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 of29the units in a one to four unit dwelling as his or her principal resi-30dence. In the case of a partnership, joint tenancy, tenancy in common or31tenancy by the entirety, at least one partner or tenant must be an32owner-occupant. In the case of a cooperative or condominium a majority33of the units must be owner-occupied. The term "owner-occupant" shall34include an owner of a vacant one to four unit dwelling who demonstrates35an intention to move into one of the units after the rehabilitation of36the 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 income47owner-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 sixty52thousand 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 mayA. 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-12pant] owner of the existing dwelling. Repayment of each such note shall 13 be within a period of [the probable life of the existing dwelling which14is hereby determined to be thirty years, or such shorter period as the15agency 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-23cupant] 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 that20the portion of the loan funded by the agency shall not exceed an amount21equal 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 approvedA. 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 and42moderate 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 accordanceA. 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 corporationA. 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 forA. 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 to10section three hundred twelve of the housing act of nineteen hundred11sixty-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 not41exceed the cost of the rehabilitation, conversion or construction, plus42the costs of any or all undertakings necessary for the planning, financ-43ing, acquisition, satisfaction of tax liens and other municipal liens44and encumbrances, construction, equipment and development in connection45therewith, provided that, if any portion of such loan is used for the46cost of acquisition or for refinancing, the amount of a municipality's47portion of such loan shall not exceed one and one-half times the cost of48rehabilitation, conversion or construction.49(c) The amount of any such loan, together with the amount of all prior50liens and encumbrances, shall not exceed, except in the case of a loan51made to a non-profit company, a mutual company, or a housing development52fund company, ninety per centum of value unless the agency makes a writ-53ten determination that the owner has insufficient resources to pay for54the remaining ten per centum of value, in which case such loan shall not55exceed ninety-five per centum of value. The amount of any such loan,56together with the amount of all prior liens and encumbrances, made to aA. 6655--A 23 1non-profit company, a mutual company, or a housing development fund2company shall not exceed value, provided that when after completion of3such rehabilitation, conversion or construction, such multiple dwelling4is, or is to be operated, exclusively for the benefit of persons and5families who are entitled to occupancy by reason of ownership of stock6in the corporate owners, such loan shall not exceed ninety-eight per7centum of value unless the agency makes a written determination that the8owner has insufficient resources to pay for the remaining two per centum9of 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 shall16the term of such loan exceed the probable life of the multiple dwelling17which 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 costs37for planning, financing, acquisition of land or buildings and38construction of new buildings or the reconstruction, rehabilitation,39repair or remodeling of existing buildings and the costs of necessary40site 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 an28amount equal to sixty percent of the actual total development cost of an29eligible 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 an45eligible site such portion shall in no event exceed fifteen percent of46the total amount of such loan or the appraised value of the site, which-47ever is the lesser.484.] 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-2cy 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 the29end of its term, provided that such loan shall be also payable out of30profits upon any sale or refinancing of the project prior to the end of31such 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 years41after initial occupancy], unless converted to a cooperative or condomin- 42 ium pursuant to subdivision [eight] seven of this section. [At the end43of such period each unit shall continue to be subject to such law there-44after until the first vacancy occurs at which time the unit shall be45decontrolled.] 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 businessA. 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 special50account 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 613A. 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.