Bill Text: NY S02985 | 2023-2024 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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 4-0)
Status: (Passed) 2023-10-23 - SIGNED CHAP.535 [S02985 Detail]
Download: New_York-2023-S02985-Amended.html
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 4-0)
Status: (Passed) 2023-10-23 - SIGNED CHAP.535 [S02985 Detail]
Download: New_York-2023-S02985-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 2985--B 2023-2024 Regular Sessions IN SENATE January 26, 2023 ___________ Introduced by Sens. KAVANAGH, CLEARE, FERNANDEZ, SEPULVEDA -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- 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 EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07187-04-3S. 2985--B 2 1 improvements associated with the provision of infrastructure, or (iii) 2 providing for other costs of construction for the development of private 3 and multiple dwelling housing accommodations. 4 c. Any loan made in accordance with this section shall be secured by a 5 note and mortgage upon the property improved, other than any such prop- 6 erty title to which is held by the municipality or, in the case of a 7 condominium, a note and mortgage upon each of the [housing accommo-8dations] condominium units aided by such loan, or in the case of a coop- 9 erative housing corporation, a note and mortgage upon the economic 10 interest in such corporation of each tenant-shareholder aided by such 11 loan, or upon the property improved, other than any such property title 12 to which is held by the municipality, or upon both such economic inter- 13 est or property; provided, however, that all or part of any such loan 14 may be unsecured if necessary to satisfy the requirements of any partic- 15 ipating lender, and, provided further, that the lien created by the note 16 and mortgage may be recorded in an equal or subordinate position, or 17 subsequently made equal or subordinate, to a lien recorded by any 18 participating lender against such property. Such loan shall be repaid 19 over such period as the agency shall determine. 20 g. For purposes of this [section] article, (i) the term "mortgage" 21 shall include any pledge or assignment of shares or assignment of a 22 proprietary lease in a cooperative housing corporation where such pledge 23 or assignment is intended as security for the performance of an obli- 24 gation and which imposes a lien on or affects title to such shares or 25 such proprietary lease; and (ii) the term "owner" shall mean an individ- 26 ual, partnership, corporation or other entity, including a non-profit 27 company, a mutual company, or a housing development fund company, having 28 record or beneficial title in fee simple to real property or the lessee 29 thereof under a lease having a term of at least forty-nine years. 30 § 3. Section 696-a of the general municipal law, as amended by chapter 31 465 of the laws of 1993, is amended to read as follows: 32 § 696-a. Loans. Notwithstanding the provisions of any general, special 33 or local law, an agency is hereby authorized to make or contract to make 34 grants or loans[: (i)] to the owner of any property that is part of an 35 urban development action area project for the purpose of: (i) rehabili- 36 tation of an existing private or multiple dwelling or construction of a 37 new private or multiple dwelling, (ii) [for the purpose of] providing 38 site improvements, incidental or appurtenant to such rehabilitation or 39 such construction, within the urban development action area in which the 40 urban development action area project is located, including, but not 41 limited to, water and sewer facilities, sidewalks, landscaping, parks 42 and open space, social, recreational, communal and other non-residential 43 facilities and the outfitting thereof, the curing of problems caused by 44 abnormal site conditions, excavation and construction of footings and 45 foundations and other improvements associated with the provision of 46 infrastructure, or (iii) [for the purpose of] providing for other costs 47 of construction for the development of private and multiple dwelling 48 housing accommodations. In the case of a grant made under this section 49 for the rehabilitation of an existing multiple dwelling intended to be 50 converted to a condominium or cooperative form of ownership or for the 51 development of one to four unit housing accommodations or a condominium 52 or cooperative housing corporation, such grant shall require a regulato- 53 ry agreement with the agency limiting profits. Any loan made in accord- 54 ance with this section shall be secured by a note and mortgage upon the 55 property improved, other than any such property title to which is held 56 by the municipality, or, in the case of a condominium, a note and mort-S. 2985--B 3 1 gage upon each of the [housing accommodations] condominium units aided 2 by such loan, or in the case of a cooperative housing corporation, a 3 note and mortgage upon the economic interest in such corporation of each 4 tenant-shareholder aided by such loan, or upon the property improved, 5 other than any such property title to which is held by the municipality, 6 or upon both such economic interest or property; provided, however, that 7 all or part of any such loan may be unsecured if necessary to satisfy 8 the requirements of any participating lender. Such loan shall be repaid 9 over such period as the agency shall determine. In the case of a loan 10 for rehabilitation of an existing multiple dwelling intended to be 11 converted to a condominium or cooperative form of ownership or a loan 12 for the provision of infrastructure or for the provision of other costs 13 of construction for the development of one to four unit housing accommo- 14 dations or a condominium or cooperative housing corporation, such note 15 and mortgage may provide that the loan shall automatically be reduced to 16 zero over a period of owner-occupancy of the housing accommodations 17 assisted by such loan. In the case of a grant or loan made under this 18 section for the purpose of providing rental housing for persons of low 19 income as defined in section two of the private housing finance law, 20 such loan or grant shall require a regulatory agreement with the agency 21 limiting profits and rentals charged. In the case of a loan made under 22 this section for the purpose of providing rental housing for persons of 23 low income as defined in section two of the private housing finance law, 24 such note and mortgage may provide that the loan shall automatically be 25 reduced to zero over a period of up to thirty years of compliance by the 26 owner with a regulatory agreement with the agency limiting profits and 27 rentals charged. The repayment of any loan made in accordance with this 28 section shall be made in such manner as may be provided in such note and 29 mortgage in connection with such loan, and may authorize the owner, with 30 the consent of the agency, to prepay the principal of the loan subject 31 to such terms and conditions as therein provided. Such note and mortgage 32 may contain such other terms and conditions not inconsistent with the 33 provisions of this article as the agency may deem necessary or desirable 34 to carrying out the purposes and provisions of this article including, 35 but not limited to, provisions concerning the repayment of the loan, the 36 interest, if any, thereon, and other charges in connection therewith. 37 For purposes of this [section] article, (1) the term "mortgage" shall 38 include any pledge or assignment of shares or assignment of a proprie- 39 tary lease in a cooperative housing corporation where such pledge or 40 assignment is intended as security for the performance of an obligation 41 and which imposes a lien on or affects title to such shares or such 42 proprietary lease; and (2) the term "owner" shall mean an individual, 43 partnership, corporation or other entity, including a non-profit compa- 44 ny, a mutual company, or a housing development fund company, having 45 record or beneficial title in fee simple to real property or the lessee 46 thereof under a lease having a term of at least forty-nine years. 47 § 4. The general municipal law is amended by adding two new sections 48 696-e and 696-f to read as follows: 49 § 696-e. Charges. A municipality, or an agency, making a loan or grant 50 pursuant to this article, may require the payment of charges by an owner 51 in consideration for the financing, regulation, supervision and audit of 52 such loan, or for regulation, supervision and audit of such grant. Such 53 charges shall be paid into the treasury of the municipality requiring 54 the charges and shall be paid and deposited in the general fund of any 55 such municipality.S. 2985--B 4 1 § 696-f. Servicing. An agency may make provision in a note and loan 2 agreement or by separate agreement for the performance of loan or grant 3 servicing functions, including, but not limited to, functions related to 4 lending or providing a grant for construction, as may generally be 5 performed by an institutional lender. Such agency may act in such capac- 6 ity or appoint or consent to the appointment of a financial institution 7 or other qualified entity, as determined by such agency, to act in such 8 capacity on behalf of such agency. Such agency may pay a reasonable and 9 customary fee to such financial institution or other qualified entity 10 appointed by such agency, or to whose appointment such agency provided 11 consent, for the performance of such loan or grant servicing functions. 12 § 5. Subdivision 41 of paragraph a of section 11.00 of the local 13 finance law, as amended by chapter 400 of the laws of 1994, is amended 14 to read as follows: 15 41. Housing. The effectuating of any of the purposes of the public 16 housing law, other than making loans to limited profit housing companies 17 pursuant to article two of the private housing finance law, and other 18 than making loans to owners of existing multiple dwellings, fifty years; 19 bonds issued by a housing authority pursuant to section forty-one of the 20 public housing law and guaranteed by a municipality pursuant to section 21 ninety-five of the public housing law, five years, in addition to the 22 foregoing period of fifty years, for the temporary financing of a 23 project prior to the permanent financing thereof; evidences of indebt- 24 edness issued to the state pursuant to paragraph c of section 20.00 of 25 this chapter, three years, in addition to the foregoing period of fifty 26 years for the temporary financing of a project prior to the permanent 27 financing thereof; loans to limited profit housing companies pursuant to 28 article two of the private housing finance law, fifty-five years; loans 29 or grants to owners of existing private or multiple dwellings, non-resi- 30 dential property, or vacant land pursuant to the provisions of article 31 eight, article eight-A, article eight-B, article eleven or article 32 fifteen of the private housing finance law, or loans for the 33 construction of multiple dwellings pursuant to article eleven of the 34 private housing finance law, or loans or grants for the pre-development 35 costs or construction of private or multiple dwellings pursuant to arti- 36 cle twenty-two of the private housing finance law, thirty years. 37 § 6. Section 2 of the private housing finance law is amended by adding 38 two new subdivisions 30 and 31 to read as follows: 39 30. "Climate resiliency improvements." Improvements for the purpose of 40 protecting land or any structures thereon from damage resulting from or 41 which may result from changes in climate, including, but not limited to, 42 extreme weather events, abnormal temperatures, and sea level rise, or of 43 reducing the impact of the operation of such structures on climate 44 change, including, but not limited to, improvements that reduce energy 45 consumption or promote the efficient use of natural resources. 46 31. "Private lender." One or more banking organizations, foundations, 47 labor unions, credit unions, employers' associations, veterans' organ- 48 izations, colleges, universities, educational institutions, child care 49 institutions, hospitals, medical research institutes, insurance compa- 50 nies, trustees or fiduciaries, trustees of pensions and retirement funds 51 and systems, corporations, partnerships, individuals or other entities 52 or any combination of the foregoing, and shall include any public bene- 53 fit corporation and the United States of America and any of its agencies 54 and departments. As used in this definition, the terms "trustees" and 55 "fiduciaries" shall include any fiduciary or fiduciaries holding fundsS. 2985--B 5 1 for investment and the term "banking organizations" shall have the same 2 meaning as in subdivision eleven of section two of the banking law. 3 § 7. Section 400 of the private housing finance law is amended to read 4 as follows: 5 § 400. Policy and purposes of article. It is hereby declared that 6 there exists in municipalities in this state a seriously inadequate 7 supply of safe and sanitary dwelling accommodations for persons and 8 families of low income; that such shortage constitutes an emergency and 9 a grave menace to the health, safety, morals, welfare and comfort of 10 citizens of this state; that there exists in such municipalities a large 11 number of multiple dwellings which are inadequate, unsafe or insanitary 12 by reason of the absence of proper heating facilities or by reason of 13 the necessity for elimination of conditions dangerous to human life or 14 detrimental to health, including nuisances as defined[,] in section 15 three hundred nine of the multiple dwelling law, or for other rehabili- 16 tation or improvement and which can be made adequate, safe and sanitary, 17 by the installation of proper heating facilities or by other rehabili- 18 tation, preservation or improvement or by the elimination of such condi- 19 tions; that such installation, rehabilitation, preservation or improve- 20 ment cannot readily be provided by the ordinary unaided operation of 21 private enterprise for occupancy by persons or families of low income 22 without public aid in the form of low interest loans or grants to owners 23 of such multiple dwellings for the purpose of such installation, reha- 24 bilitation, preservation or improvement; that the installation of proper 25 heating facilities in such multiple dwellings or other rehabilitation, 26 preservation or improvement thereof for occupancy by persons of low 27 income as defined in this article is a public use and a public purpose 28 for which public money may be loaned or granted; that such conditions 29 require the provisions hereinafter enacted; and the necessity in the 30 public interest for the provisions hereinafter enacted is hereby 31 declared as a matter of legislative determination. 32 § 8. Subdivision 3 of section 401 of the private housing finance law, 33 paragraph a as amended by chapter 44 of the laws of 1976, and paragraph 34 b as amended by chapter 904 of the laws of 1962, is amended to read as 35 follows: 36 3. a. The term "persons or families of low income" shall mean "persons 37 of low income" or "families of low income" as defined in section two of 38 this chapter[, whose probable aggregate annual income during the period39of occupancy does not exceed six times the rental (including the value40or cost to them of heat, light, water and cooking fuel) of dwelling41units occupied by such persons or families in existing multiple dwell-42ings aided by a loan pursuant to this article, except that in the case43of persons or families with three or more dependents, such ratio shall44not exceed seven to one, and except further that the income limitations45prescribed by this paragraph shall be subject to the provisions of46subdivision two of section four hundred three of this article.47In calculating annual income, social security payments and income48received from private pension funds by any person sixty-two years of age49or more shall be excluded up to a total maximum amount of seventy-five50dollars per month. The term "probable aggregate annual income" means the51annual income of the chief wage earner of the family, plus all other52income of other members of the family over the age of twenty-one years,53plus a proportion of income of gainfully employed members under the age54of twenty-one years, the proportion to be determined by the agency. The55agency may exclude a proportion of the income of other members of the56family over the age of twenty-one years for the purpose of determiningS. 2985--B 6 1eligibility for commencement of occupancy or continued occupancy, or for2establishing rental of such family, or for all such purposes]. 3 b. Notwithstanding the provisions of paragraph a of this subdivision, 4 [and subject to the provisions of subdivision three of section four5hundred three of this article] the term "persons or families of low 6 income" shall also mean any person or family who, immediately prior to 7 the date on which a contract for a loan with respect to an existing 8 multiple dwelling is entered into pursuant to the provisions of this 9 article, occupies any dwelling unit in such multiple dwelling and who 10 continuously occupies such unit during and after completion of central 11 heating or other rehabilitation or improvement performed pursuant to 12 such contract provided, however, that any person or family required to 13 remove from any such dwelling unit because of such installation, reha- 14 bilitation or improvement shall, for the purpose of this section, be 15 deemed to have continuously occupied such unit and shall have preference 16 in re-entering such multiple dwelling upon completion of the aforesaid 17 work. 18 § 9. Subdivision 6 of section 401 of the private housing finance law, 19 as added by chapter 505 of the laws of 1973, is amended to read as 20 follows: 21 6. The term "owner" shall mean a person having record or beneficial 22 title in fee simple to real property or the lessee thereof under a lease 23 having an unexpired term of at least thirty years. 24 § 10. Subdivision 1 of section 402 of the private housing finance law, 25 as amended by chapter 808 of the laws of 1971, is amended and a new 26 subdivision 1-a is added to read as follows: 27 1. Notwithstanding the provisions of any general, special or local 28 law, a municipality, by such officer or agency as determined by its 29 local legislative body, is hereby authorized: 30 (a) to make or contract to make loans to the owners of existing multi- 31 ple dwellings within its territorial limits, subject to the limitations 32 in subdivision two of this section, in such amounts as may be required 33 for the installation of proper heating facilities, the incorporation of 34 climate resiliency improvements, or elimination of conditions dangerous 35 to human life or detrimental to health, including nuisances as defined 36 in section three hundred nine of the multiple dwelling law, or other 37 rehabilitation, preservation or improvement of such multiple dwellings, 38 and if such owner acquires the multiple dwelling for the purposes of 39 such rehabilitation, preservation or improvement or owns the multiple 40 dwelling subject to an outstanding indebtedness, such loans may be made 41 exclusively for or may include such amounts as may be required for the 42 cost of such acquisition or for the refinancing of such outstanding 43 indebtedness, and may make temporary loans or advances to such owners in 44 anticipation of the permanent municipal loans for such purposes[.]; and 45 (b) to make or contract to make grants to any owner described in para- 46 graph (a) of this subdivision, on the same terms as permitted under such 47 paragraph for a loan. 48 1-a. As used in this article, the term "loan" shall include any grant 49 made by a municipality pursuant to this article, provided, however, that 50 any provision of this article concerning the repayment or forgiveness 51 of, or security for, a loan shall not apply to any grant made pursuant 52 to this article. 53 § 11. Subdivisions 2-a, 2-b, 2-c and 4 of section 402 of the private 54 housing finance law, subdivision 2-a as added by chapter 213 of the laws 55 of 1975, subdivision 2-b as amended by chapter 362 of the laws of 2000,S. 2985--B 7 1 and subdivision 2-c as amended by chapter 101 of the laws of 1994, are 2 amended to read as follows: 3 2-a. [As used in this section the term "value" shall mean the "as is"4value of the multiple dwelling and the land upon which it is situated5prior to such installation, elimination, other rehabilitation or6improvement referred to in subdivision one of this section plus the7total of all costs of such installation, elimination, rehabilitation or8improvement including, but not limited to, the costs of any or all9undertakings necessary for the planning, financing, tenant relocation,10acquisition, construction, equipment and development in connection ther-11ewith.122-b.] (a) Each permanent loan shall be secured by a bond and mortgage 13 or note and mortgage upon the multiple dwelling and the land upon which 14 it is situated, provided that where the multiple dwelling is held in the 15 condominium form of ownership, such loan shall be secured by a bond and 16 mortgage or note and mortgage upon the condominium units rehabilitated 17 or improved with such loan; where the loan is made to an owner who is a 18 lessee, such loan shall be secured by [a first lien on such property] a 19 leasehold interest in such property. 20 (b) [The amount of any such loan shall not exceed the cost of the21installation of proper heating facilities, or elimination of conditions22dangerous to human life or detrimental to health, including nuisances as23defined in section three hundred nine of the multiple dwelling law, or24other rehabilitation or improvement provided that, if any portion of25such loan is used for the cost of acquisition of the land and the multi-26ple dwelling or for re-financing, the total amount of such loan shall27not exceed two times the cost of such installation, elimination of such28conditions, rehabilitation or improvement.29(c) The amount of any such loan, together with the amount of all prior30liens and encumbrances, shall not exceed, except in the case of a loan31made to a non-profit company, a mutual company, or a housing development32fund company, ninety per centum of the value of the property, after33completion of the installation of proper heating facilities, or elimi-34nation of such conditions or other rehabilitation or improvement, as35estimated by the agency, unless the agency makes a written determination36that the owner has insufficient resources to pay for the remaining ten37per centum of the value of the property, after completion of such38installation, elimination, or other rehabilitation or improvement, as39estimated by the agency, in which case such loan shall not exceed nine-40ty-five per centum of the value of the property, after completion of the41installation of proper heating facilities, or elimination of such condi-42tions or other rehabilitation or improvement, as estimated by the agen-43cy. The amount of any such loan, together with the amount of all prior44liens and encumbrances, made to a non-profit company, a mutual company,45or a housing development fund company shall not exceed the value of the46property after completion of such installation, elimination, or other47rehabilitation or improvement, as estimated by the agency provided that48when after completion of such installation, elimination or other reha-49bilitation or improvement, such project is, or is to be operated exclu-50sively for the benefit of persons or families who are entitled to occu-51pancy by reason of ownership of stock in the corporate owners, such loan52shall not exceed ninety-eight percentum of the value of the property,53after completion of such installation, elimination, or other rehabili-54tation or improvement, as estimated by the agency, unless the agency55makes a written determination that the owner has insufficient resources56to pay for the remaining two per centum of the value of the property,S. 2985--B 8 1after completion of such installation, elimination, or other rehabili-2tation or improvement, as estimated by the agency, in which case such3loan shall not exceed the value of the property, after completion of4such installation, elimination, or other rehabilitation or improvement,5as estimated by the agency.6(d)] Each such bond and mortgage or note and mortgage shall be repaid 7 over or within a period of [thirty] forty years, provided that such 8 period may be extended as the agency may determine necessary to ensure 9 the continued affordability or economic viability of the multiple dwell- 10 ing, in such manner as may be provided in such bond and mortgage or note 11 and mortgage and contract [but in no case to exceed the probable life of12the multiple dwelling which is hereby determined to be thirty years]. 13 Such bond and mortgage or note and mortgage and the contract in 14 connection with such permanent and temporary loans may contain such 15 other terms and provisions not inconsistent with the provisions of this 16 article as the local legislative body or the agency may deem necessary 17 or desirable to secure repayment of the loan, the interest thereon and 18 other charges in connection therewith and to carry out the purposes and 19 provisions of this article[; notwithstanding the foregoing, a loan made20prior to January first, nineteen hundred seventy-eight may, in the21discretion of the agency, be extended to a term up to forty-five years.22The agency may modify the rate and time of payment of interest on the23original loan and the rate and time of amortization of principal in such24manner as required to secure payment of the loan within the extended25term], including, but not limited to, providing that the lien created by 26 such bond and mortgage or note and mortgage, and, if applicable, any 27 regulatory agreement executed by the owner and the agency or restrictive 28 covenant approved by such agency, may be recorded in an equal or subor- 29 dinate position, or subsequently made equal or subordinate, to a lien 30 recorded by any private lender against such multiple dwelling. 31 [2-c.] 2-b. If a loan pursuant to this article is made to a non-profit 32 company or a housing development fund company which agrees to provide 33 housing accommodations exclusively for persons and families of low 34 income, at least thirty percent of whom are referred to it by the muni- 35 cipality and have prior to their initial occupancy in such accommo- 36 dations resided in emergency shelter facilities operated by or on behalf 37 of the municipality, the agency may provide that the note and mortgage 38 shall automatically be reduced to zero in five equal annual decrements 39 commencing on the tenth year after the initial occupancy date, provided 40 that such accommodations have been owned and operated in a manner 41 consistent with an agreement with the municipality contained in such 42 note and mortgage to provide housing for such persons. 43 4. The agency may [charge the] require the payment of charges by an 44 owner of such multiple dwelling [reasonable fees] in consideration for 45 the financing, regulation, supervision and audit of such loan. Such fees 46 shall be [kept by the municipality in a separate fund to be known as the47housing rehabilitation fund and shall be used to pay for the expenses of48the municipality in administering and carrying out the provisions of49this article] paid into the treasury of the municipality requiring the 50 charges and shall be paid and deposited in the general fund of any such 51 municipality. 52 § 12. Subdivisions 2, 3, 4 and 5 of section 403 of the private housing 53 finance law, subdivision 2, paragraphs a, b and c of subdivision 3 and 54 subdivision 4 as amended by chapter 904 of the laws of 1962, are amended 55 to read as follows:S. 2985--B 9 1 2. [In the event that after any person or family included within the2provisions of paragraph a of subdivision three of section four hundred3one of this article, but not included within the provisions of paragraph4b of such subdivision three, begins occupancy of any dwelling unit in5any multiple dwelling aided by a loan pursuant to this article, and6during the period while such dwelling unit is subject to a maximum rent7prescribed pursuant to this article, the income of such person or family8increases so as to exceed the applicable maximum prescribed by such9paragraph a by more than fifty per centum, such person shall be subject10to removal from such dwelling with the approval of the agency.113. a. In the event that on the date on which a contract for a loan is12made with respect to a multiple dwelling aided by a loan pursuant to13this article, any person or family occupying a dwelling unit in such14multiple dwelling and included within the provisions of paragraph b of15subdivision three of section four hundred one of this article, has a16probable aggregate annual income, as determined in accordance with the17provisions of paragraph a of such subdivision three, which exceeds the18income limits specified in such paragraph a by more than fifty per cent,19such person or family shall be subject to removal from such dwelling20unit with the approval of the agency upon the expiration of a period of21two years after the date on which such contract is entered into.22b. In the event that at any time within a period of two years after23any such contract is entered into, the income of any such person or24family increases so as to exceed the income limits specified in such25paragraph a by more than fifty per cent, such person or family shall be26subject to removal from such dwelling unit with the approval of the27agency upon the expiration of such period of two years.28c. If, at any time subsequent to the expiration of a period of two29years after any such contract is entered into, and during the period30while the dwelling unit occupied by any such person or family is subject31to a maximum rent prescribed pursuant to this article, the income of32such person or family increases so as to exceed the income limits speci-33fied in such paragraph a by more than fifty per cent, such person or34family shall be subject to removal from such dwelling unit with the35approval of the agency.364.] Any person or family in occupancy[, whether included within the37provisions of paragraph a or paragraph b of subdivision three of section38four hundred one of this article, whose income exceeds the maximum39prescribed by the provisions of such paragraph a with respect to the40time of beginning of occupancy, shall] whose income precludes the inclu- 41 sion of such person or family within the definition provided in para- 42 graph a of subdivision three of section four hundred one of this article 43 may be required to pay a rental surcharge in accordance with a schedule 44 of surcharges to be promulgated by the agency. In determining imposi- 45 tion of any such surcharge, the agency shall consider factors such as 46 the net operating income and debt service coverage ratio of the property 47 aided by a loan pursuant to this article. Rental surcharges collected 48 pursuant to this section shall be paid by the owner to the municipality 49 which has granted such owner tax exemption or tax abatement pursuant to 50 any law authorizing the granting of same, as reimbursement to such muni- 51 cipality therefor. In the event that such tax exemption and tax abate- 52 ment have not been granted, or in the event that a sum equal to the 53 total amount of tax exemption and tax abatement granted to the owner has 54 been paid to the municipality, the excess, if any, of surcharges shall 55 be paid to the municipality in reduction of the loan.S. 2985--B 10 1 [5. Any person or family whose removal is required by any provision of2this article shall be subject to removal by summary proceedings.] 3 § 13. The opening paragraph of subdivision 1 of section 404 of the 4 private housing finance law, as added by chapter 904 of the laws of 5 1962, is amended to read as follows: 6 No such loan shall be made by a municipality to an owner of an exist- 7 ing multiple dwelling unless the owner of such multiple dwelling [and8all persons holding a lien prior to that of the municipality] shall 9 covenant in writing that so long as any part of such loan remains 10 unpaid, any exemption and abatement from taxation on the property 11 resulting from the installations, alterations or improvements made with 12 such loan remains in effect or for a period of at least ten years from 13 the occupancy date, whichever is the later: 14 § 14. Section 450 of the private housing finance law, as amended by 15 chapter 273 of the laws of 1975, is amended to read as follows: 16 § 450. Policy and purposes of article. It is hereby declared that 17 there exists in municipalities in this state a seriously inadequate 18 supply of safe and sanitary dwelling accommodations; that such shortage 19 constitutes an emergency and a grave menace to the health, safety, 20 morals, welfare and comfort of citizens of this state; that existing 21 conditions of deterioration of housing marked by noncompliance with the 22 multiple dwelling law or local housing codes threaten a further decrease 23 in such supply; that rehabilitation and improvement of dwellings to 24 prolong the useful life of such dwellings may be necessary to arrest 25 such conditions of deterioration; that the elimination of such condi- 26 tions by rehabilitation or other improvement cannot readily be provided 27 by the ordinary unaided operation of private enterprise without public 28 aid in the form of low interest loans or grants to owners of such multi- 29 ple dwellings; that such rehabilitation or other improvement of such 30 dwellings to bring them into conformance with the multiple dwelling law 31 and local housing codes is a public use, a public purpose and a city 32 purpose for which public money may be loaned or granted by a munici- 33 pality and for which indebtedness may be contracted by a municipality; 34 that such conditions require the provisions hereinafter enacted, and the 35 necessity in the public interest for the provisions hereinafter enacted 36 is hereby declared as a matter of legislative determination. 37 § 15. Subdivisions 2 and 3 of section 451 of the private housing 38 finance law, subdivision 2 as amended by chapter 705 of the laws of 1976 39 and subdivision 3 as amended by chapter 269 of the laws of 1985, are 40 amended to read as follows: 41 2. "Occupancy by persons of low income." Occupancy by [persons paying42rentals or carrying charges not in excess of the average rentals or43carrying charges prevailing in local projects of municipally-aided44limited-profit housing companies aided under article two of this chap-45ter, the occupancy of which commenced on or after May eighteenth, nine-46teen hundred seventy] "persons of low income" or "families of low 47 income," as such terms are defined in section two of this chapter. 48 3. "Owner." An individual, partnership, corporation or other entity, 49 including a non-profit company, a mutual company, or a housing develop- 50 ment fund company, which holds record or beneficial title in fee simple 51 to the multiple dwelling and the real property upon which it is situate 52 or the lessee thereof under a lease the unexpired term of which shall be 53 not less than the term of the loan to be made under this article. 54 § 16. Subdivision 1 of section 452 of the private housing finance law, 55 as amended by chapter 923 of the laws of 1983, is amended and a new 56 subdivision 1-a is added to read as follows:S. 2985--B 11 1 1. Notwithstanding the provisions of any general, special or local 2 law, a municipality is hereby authorized: 3 (a) to make or contract to make loans to the owners of existing multi- 4 ple dwellings within its territorial limits, subject to the limitations 5 in subdivision two of this section, for the elimination of any substand- 6 ard or insanitary condition or conditions in violation of the multiple 7 dwelling law or local housing code, for the incorporation of climate 8 resiliency improvements or for such replacement and rehabilitation of 9 the heating, plumbing, electrical and related systems or other improve- 10 ments as shall be reasonably necessary to prolong the useful life of 11 such dwellings, and may make temporary loans to such owners in antic- 12 ipation of the permanent municipal loans for such purposes; and 13 (b) to make or contract to make grants to any owner described in 14 paragraph (a) of this subdivision, on the same terms as permitted under 15 such paragraph for a loan. 16 1-a. As used in this article, the term "loan" shall include any grant 17 made by a municipality pursuant to this article, provided, however, that 18 provisions of this article concerning the repayment or forgiveness of, 19 or security for, a loan shall not apply to any grant made pursuant to 20 this article. 21 § 17. Subdivisions 2 and 5 of section 452 of the private housing 22 finance law, subdivision 2 as amended by chapter 408 of the laws of 2009 23 and subdivision 5 as amended by chapter 273 of the laws of 1975, are 24 amended to read as follows: 25 2. Each loan shall be evidenced by a note executed by the owner of the 26 existing multiple dwelling. The supervising agency in its discretion may 27 require one or more of the shareholders of a corporate owner to co-sign 28 such note or to otherwise guarantee or pledge security for the repayment 29 of the loan. [The amount of any such loan shall not exceed the sum of30thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of31eliminating such substandard or insanitary condition or conditions, or32effecting such rehabilitation or improvement, whichever is less.] Each 33 such note shall be repaid within a period [of the probable life of the34existing multiple dwelling which is hereby determined to be thirty35years, or such shorter period as the supervising agency shall determine] 36 of forty years, provided that such period may be extended as the super- 37 vising agency may determine necessary to ensure the continued afforda- 38 bility or economic viability of the existing multiple dwelling. The 39 repayment shall be made in such manner as may be provided in such note 40 and contract, if any, in connection with such loan and may authorize 41 such owner, with the consent of the supervising agency, to prepay the 42 principal of the loan subject to such terms and conditions as therein 43 provided. Such note and contract may contain such other terms and 44 provisions not inconsistent with the provisions of this article as the 45 local legislative body or supervising agency may deem necessary or 46 desirable to secure repayment of the loan, the interest thereon and 47 other charges in connection therewith and to carry out the purposes and 48 provisions of this article, including but not limited to provisions 49 ensuring availability of rents for such repayment and provisions permit- 50 ting the lien created by such note and mortgage, and, if applicable, a 51 regulatory agreement executed by such owner and supervising agency, be 52 recorded in an equal and subordinate position, or subsequently made 53 equal or subordinate, to a lien recorded by any private lender against 54 such multiple dwelling. 55 5. The supervising agency may [charge] require the payment of charges 56 by the owner of such existing multiple dwelling [reasonable fees] inS. 2985--B 12 1 consideration for the financing, regulation, supervision and audit of 2 such loan. Such [fees] charges shall be [kept by the municipality in a3separate fund to be known as the article VIII-A housing rehabilitation4fund and shall be used to help meet the expenses of the municipality in5administering and carrying out the provisions of this article] paid into 6 the treasury of the municipality requiring the charges and shall be paid 7 and deposited in the general fund of any such municipality. 8 § 18. Section 453 of the private housing finance law, as added by 9 chapter 924 of the laws of 1970, paragraphs (c) and (d) as amended and 10 paragraph (e) of subdivision 1 as added by chapter 273 of the laws of 11 1975, is amended to read as follows: 12 § 453. Conditions precedent to making such loans. [1.] No such loan 13 shall be made by a municipality to an owner of an existing multiple 14 dwelling unless the owner of such multiple dwelling shall covenant in 15 writing that so long as any part of such loan shall remain unpaid or 16 for a period of at least ten years from the date of the loan, whichever 17 is later: 18 [(a)] 1. Each dwelling unit in such multiple dwelling shall be avail- 19 able solely for occupancy by persons of low income; 20 [(b)] 2. No person who lives in such multiple dwelling at the time the 21 loan is made shall be required to move because of the rehabilitation or 22 improvement financed thereby, except that a temporary relocation may be 23 required in connection with such rehabilitation or improvement; 24 [(c)] 3. All persons operating or managing such multiple dwelling will 25 permit the duly authorized officers, employees, agents or inspectors of 26 the municipality to enter in or upon and inspect such multiple dwelling 27 at all reasonable hours; [and28(d)] 4. The municipality by such duly authorized representatives as 29 aforesaid shall have full power to investigate into and order the owner 30 of such multiple dwelling to furnish such reports and information as it 31 may require concerning such rehabilitation or improvement and shall have 32 full power to audit the books of said owner with respect to such 33 matters; and 34 [(e)] 5. The owner will submit to the supervising agency annually a 35 statement of the income and expenses of such multiple dwelling, in such 36 form as shall be approved by such agency. 37 [2. No such loan shall be made by a municipality unless such owner38executed an affidavit that he was unable to obtain financing for such39rehabilitation or improvement because of the neighborhood, the age of40the building, or other factors indicating an inability of the private41sector unaided to cause such rehabilitation or improvement to be made.] 42 § 19. The article heading of article 8-B of the private housing 43 finance law, as added by chapter 786 of the laws of 1987, is amended to 44 read as follows: 45 LOANS TO [OWNER-OCCUPANTS] OWNERS OF ONE TO FOUR UNIT 46 PRIVATE AND MULTIPLE DWELLINGS 47 § 20. Section 470 of the private housing finance law, as amended by 48 chapter 200 of the laws of 1997, is amended to read as follows: 49 § 470. Policy and purposes of article. It is hereby declared and found 50 that there exists in municipalities within the state substandard and 51 unsanitary areas and neighborhoods containing deteriorated [owner-occu-52pied] one to four unit private and multiple dwellings, and that the 53 rehabilitation or preservation of such dwellings is necessary in order 54 to aid in the prevention and elimination of slums and blight in such 55 areas and neighborhoods.S. 2985--B 13 1 It further is found that there exists in such municipalities a seri- 2 ously inadequate supply of safe and sanitary [owner-occupied] one to 3 four unit private and multiple dwellings, particularly for persons of 4 low and moderate income, that existing non-compliance with local housing 5 codes and with the multiple dwelling law and the multiple residence law 6 threatens to decrease such supply, and that the rehabilitation, preser- 7 vation and improvement of such dwellings is necessary to arrest such 8 conditions of deterioration. 9 It further is found that the elimination of such conditions by reha- 10 bilitation or other improvements in one to four unit private and multi- 11 ple dwellings cannot be readily provided without public aid in the form 12 of low interest loans or grants to [low and moderate income owner-occu-13pants] owners of such one to four unit dwellings. 14 The rehabilitation, preservation or other [improvements] improvement 15 of such private and multiple dwellings [owned and occupied by low and16moderate income persons or families,] is hereby declared a public 17 purpose and a municipal purpose for which public monies may be loaned or 18 granted. 19 In order, further, to promote the preservation and rehabilitation of 20 such dwellings, it is hereby declared that additional provisions should 21 be made to provide public monies for interest reduction subsidies for 22 private loans made by private investors for such rehabilitation. 23 The necessity in the public interest for the provisions of this arti- 24 cle is hereby declared as a matter of legislative determination. 25 § 21. Subdivisions 8 and 9 of section 471 of the private housing 26 finance law, as amended by chapter 200 of the laws of 1997, are amended 27 to read as follows: 28 8. "Owner" shall mean an individual or individuals, a partnership, 29 [or] a corporation or other entity, including but not limited to, a 30 trust, a joint tenancy, tenancy in common or tenancy by the entirety 31 holding record or beneficial title in fee simple to an existing private 32 or multiple dwelling and the real property upon which it is situated, or 33 the lessee thereof under a lease having an unexpired term of at least 34 thirty years. "Owner" shall be deemed to also include a cooperative 35 corporation or a condominium association. 36 9. ["Owner-occupant" shall mean an owner who occupies at least one of37the units in a one to four unit dwelling as his or her principal resi-38dence. In the case of a partnership, joint tenancy, tenancy in common or39tenancy by the entirety, at least one partner or tenant must be an40owner-occupant. In the case of a cooperative or condominium a majority41of the units must be owner-occupied. The term "owner-occupant" shall42include an owner of a vacant one to four unit dwelling who demonstrates43an intention to move into one of the units after the rehabilitation of44the property] Reserved. 45 § 22. Section 472 of the private housing finance law, as added by 46 chapter 786 of the laws of 1987, subdivision 1 as amended by chapter 479 47 of the laws of 2005, subdivision 2 as amended by chapter 408 of the laws 48 of 2009, subdivision 3 as amended by chapter 84 of the laws of 2001, and 49 subdivision 7 as added by chapter 705 of the laws of 1991, is amended to 50 read as follows: 51 § 472. Loans to [owner-occupants] owners. 1. Notwithstanding the 52 provisions of any general, special or local law, a municipality, acting 53 through an agency, is authorized: 54 (a) to make, or contract to make, loans to [low and moderate income55owner-occupants] owners of one to four unit existing private or multiple 56 dwellings within its territorial limits, subject to the limitation ofS. 2985--B 14 1 subdivisions two through seven of this section, in such amounts as shall 2 be required for the rehabilitation, improvement or acquisition of such 3 dwellings[,] provided, [however, that such loans shall not exceed sixty4thousand dollars per dwelling unit. Such] that any such rehabilitation 5 or improvement may include climate resiliency improvements. Such loans 6 may also be made exclusively for or include the refinancing of the 7 outstanding indebtedness of such dwellings, and the municipality may 8 make temporary loans or advances to such [owner-occupants] owners in 9 anticipation of permanent loans for such purposes; and 10 (b) to make or contract to make grants to any owner described in para- 11 graph (a) of this subdivision, on the same terms as permitted under such 12 paragraph for a loan. 13 1-a. As used in this article, the term "loan" shall include any grant 14 made by a municipality pursuant to this article, provided, however, that 15 provisions of this article concerning the repayment or forgiveness of, 16 or security for, a loan shall not apply to any grant made pursuant to 17 this article. 18 2. Each loan shall be evidenced by a note executed by the [owner-occu-19pant] owner of the existing dwelling. Repayment of each such note shall 20 be within a period of [the probable life of the existing dwelling which21is hereby determined to be thirty years, or such shorter period as the22agency shall determine] forty years, provided that such period may be 23 extended as the agency may determine necessary to ensure the continued 24 affordability or economic viability of the existing dwelling. The 25 repayment shall be made in such manner as may be provided in such note 26 and contract, if any, in connection with such loan, and may authorize 27 such [owner-occupant] owner, with the consent of the agency, to prepay 28 the principal of the loan subject to such terms and conditions as there- 29 in provided. In order to make any such loan affordable to the [owner-oc-30cupant] owner, the agency may provide in such note and contract that all 31 of the outstanding principal of said loan may be self-liquidated over a 32 [fifteen year] period of [owner-occupancy] not less than fifteen years 33 of continuous compliance by the owner with a regulatory agreement or 34 other restrictive covenant with or approved by the agency and upon the 35 satisfaction of any additional conditions specified therein. Such note 36 and contract may contain such other terms and provisions not inconsist- 37 ent with the provisions of this article as the agency may deem necessary 38 or desirable to secure repayment of the loan, the interest thereon, if 39 any, and other charges in connection therewith, and to carry out the 40 purposes and provisions of this article, including, but not limited to, 41 providing that the lien created by the note and mortgage, and, if appli- 42 cable, any regulatory agreement executed by such owner and agency, or 43 restrictive covenant approved by such agency, may be recorded in an 44 equal or subordinate position, or subsequently made equal or subordi- 45 nate, to a lien recorded by any private lender against such existing 46 dwelling. 47 3. The agency in its discretion may require that the [owner-occupant] 48 owner execute, acknowledge and deliver a uniform commercial code financ- 49 ing statement for the real property improvement to be in such form as 50 the agency shall specify and in accordance with the requirements of 51 section 9--502 of the uniform commercial code of the state of New York. 52 Said financing statement shall be filed or recorded without charge in 53 accordance with the provisions of paragraph one of subsection (a) of 54 section 9--501 of the uniform commercial code, and from the date of such 55 filing the municipality shall have a lien against said real property 56 improvement for the amount advanced or so much thereof as remains unpaidS. 2985--B 15 1 together with the interest thereon. Upon payment of all sums advanced by 2 the municipality and interest thereon, and upon demand of the then 3 record owner of the real property, the agency shall deliver a copy of 4 the financing statement with an endorsement thereon that the lien is 5 satisfied. Upon filing of such copy in the office where the financing 6 statement was filed and upon payment of the proper fee therefor, the 7 lien of such financing statement shall be discharged. 8 4. The agency may require the [owner-occupant] owner to execute a 9 mortgage as security for a loan in lieu of or in addition to a financing 10 statement as provided in subdivision three of this section. Such mort- 11 gage shall contain such terms and provisions not inconsistent with the 12 provisions of this article as the agency shall deem necessary or desira- 13 ble to secure repayment of the loan. 14 5. Loans may be made with respect to a one to four unit private or 15 multiple dwelling encumbered by mortgages, provided no mortgage is in 16 default, except if such default shall be remedied by the proposed reha- 17 bilitation or improvement. 18 6. The agency may [charge] require the [owner-occupant] payment of 19 charges by the owner of such existing private or multiple dwelling 20 [reasonable fees] in consideration for [administration,] the financing, 21 regulation, supervision and audit of such loan. Such charges shall be 22 paid into the treasury of the municipality requiring the charges and 23 shall be paid and deposited in the general fund of any such munici- 24 pality. 25 7. In making a loan under this article, an agency shall have the power 26 to participate in a loan made by any private investor[, provided that27the portion of the loan funded by the agency shall not exceed an amount28equal to seventy-five percent of the total loan.] The agency may enter 29 into an agreement with a private investor to deposit funds with such 30 private investor to cover the agency's participation in loans to 31 [owner-occupants] owners of one to four unit existing private and multi- 32 ple dwellings with such funds advanced by such private investor to 33 [owner-occupants] owners of existing dwellings. The portion of the loan 34 funded by the agency may be equal to or subordinate in lien to the 35 portion of the loan funded by the private investor and the note and 36 contract may contain such terms with respect to interest rate, if any, 37 and time of payment of principal and interest as determined by the agen- 38 cy. The agency may make provision, either in the mortgage or mortgages 39 or by separate agreement, for the performance by the private investor of 40 such services as are generally performed by a banking institution which 41 itself holds a mortgage, including, without limitation, construction 42 loan advances, construction supervision, initiation of foreclosure 43 proceedings, procurement of insurance, and all other matters in 44 connection with the financing, supervision, regulation and audit of any 45 such loan. In order to make the loan affordable to the [owner-occupant] 46 owner, the agency may provide an interest reduction subsidy pursuant to 47 section four hundred seventy-five of this article, or may provide that 48 all or part of the agency's portion of the outstanding principal of any 49 such participation loan may be self-liquidated over a [fifteen year] 50 period of [owner-occupancy] not less than fifteen years of continuous 51 compliance by the owner with a regulatory agreement or other restrictive 52 covenant with or approved by the agency and upon the satisfaction of any 53 additional conditions specified therein. 54 § 23. Subdivisions 1 and 2 of section 473 of the private housing 55 finance law, as added by chapter 786 of the laws of 1987, are amended to 56 read as follows:S. 2985--B 16 1 1. No such loan shall be made to an [owner-occupant] owner of an 2 existing private or multiple dwelling unless the [owner-occupant] owner 3 of such private or multiple dwelling shall covenant in writing that so 4 long as any part of such loan shall remain unpaid or any requirement 5 imposed as a condition for making such loan that survives the repayment 6 of such loan, including, but not limited to, in a regulatory agreement 7 executed by such owner and the agency or a restrictive covenant approved 8 by such agency, remains in effect: (i) the [owner-occupant] owner or 9 managing agent or operator of such dwelling shall permit the duly 10 authorized officers, employees, agents or inspectors of the agency to 11 enter in or upon and inspect such private or multiple dwelling at all 12 reasonable hours; (ii) the agency by such duly authorized represen- 13 tatives as aforesaid shall have full power to investigate into and order 14 the [owner-occupant] owner of such dwelling to furnish such reports and 15 information as it may require concerning such rehabilitation or improve- 16 ment and shall have full power to audit the books of said owner with 17 respect to such matters; and (iii) if the property to be rehabilitated 18 is a multiple dwelling, the [owner-occupant] owner will submit to the 19 agency annually a statement of income and expenses of such dwelling, in 20 such form as shall be approved by the agency. 21 2. A municipality shall neither make nor participate in a loan to an 22 [owner-occupant] owner of an existing private or multiple dwelling 23 pursuant to this article unless the agency finds that (i) the area in 24 which such dwelling is situated is a blighted, deteriorated or deteri- 25 orating area or has a blighting influence on the surrounding area, or is 26 in danger of becoming a slum or a blighted area because of the existence 27 of substandard, unsanitary, deteriorating or deteriorated conditions, an 28 aged housing stock, or other factors indicating an inability of the 29 private sector to cause such rehabilitation to be made; or (ii) the 30 owner of such private or multiple dwelling is a person or family of low 31 income. 32 § 24. Subdivision 2 of section 474 of the private housing finance law, 33 as added by chapter 786 of the laws of 1987, is amended to read as 34 follows: 35 2. The agency is authorized to make provision in the note and loan 36 agreement or by separate agreement for the servicing of such loans by a 37 loan servicing company or other qualified entity, as determined by the 38 agency, and such services may include, but not be limited to, the 39 collection of the debt services on such loans and the establishment, 40 administration, and distribution of an escrow account for the payment of 41 the [owner-occupant's] owner's real estate taxes, sewer and water rents 42 and fire insurance. 43 § 25. Section 475 of the private housing finance law, as added by 44 chapter 786 of the laws of 1987, is amended to read as follows: 45 § 475. Interest reduction subsidies. Notwithstanding the provisions of 46 any general, special or local law, a municipality, acting through an 47 agency, is authorized to provide, or contract to provide, interest 48 reduction subsidies for loans made by private investors to [low and49moderate income owner-occupants] owners of one to four unit existing 50 private or multiple dwellings within its territorial limits, if such 51 [owner-occupants] owners would have been eligible under the provisions 52 of this article for a loan made by the municipality pursuant to this 53 article. 54 § 26. Subdivision 1 of section 576-c of the private housing finance 55 law, as amended by section 1 of chapter 254 of the laws of 1998, is 56 amended to read as follows:S. 2985--B 17 1 1. In addition to the powers granted to municipalities pursuant to 2 this article, a municipality, acting by its supervising agency, may make 3 loans for the purposes of acquisition, rehabilitation or construction of 4 dwelling accommodations to a non-profit housing development fund compa- 5 ny, a wholly-owned subsidiary of such company, a partnership the 6 controlling interest of which is held by such company and which has 7 agreed to limit profits or rate of return of investors in accordance 8 with a formula established or approved by the company, or a private 9 developer which has agreed to limit profits or rate of return of inves- 10 tors in accordance with a formula established or approved by the compa- 11 ny, which agrees to provide housing accommodations exclusively for 12 persons and families of low income, at least thirty percent of whom are 13 referred to it by a municipality and have prior to their initial occu- 14 pancy in such accommodations resided in emergency shelter facilities 15 operated by or on behalf of the municipality or who are otherwise in 16 need of emergency shelter as determined by the municipality, providing, 17 however, that in the case of a building acquired by such a company, 18 subsidiary, partnership, or developer the obligation to provide housing 19 accommodations for such persons shall be applicable only to dwelling 20 accommodations which are or become vacant after the date of acquisition. 21 Such loans may be made for such period of time and pursuant to such 22 terms and conditions as may be required by the municipality, including, 23 but not limited to, terms and conditions providing that the lien created 24 by the note and mortgage, and, if applicable, any regulatory agreement 25 executed by the owner and such municipality or restrictive covenant 26 approved by a supervising agency, may be recorded in an equal or subor- 27 dinate position, or subsequently made equal or subordinate, to a lien 28 recorded by any private lender against the dwelling aided by the loan 29 made pursuant to this article, and the supervising agency of such muni- 30 cipality may provide that the amount of the note and mortgage shall 31 automatically be reduced to zero in five equal decrements commencing on 32 the tenth year after the initial occupancy date, provided that, as of 33 the date of such reduction, such accommodations have been and continue 34 to be owned and operated in a manner consistent with an agreement with 35 the municipality contained in such note and mortgage to provide housing 36 for such persons. Notwithstanding such provision as contained in the 37 note and mortgage, the loan shall be reduced to zero only if, prior to 38 or simultaneously with delivery of such note and mortgage, the supervis- 39 ing agency made a written determination that such reduction would be 40 necessary to ensure the continued affordability or economic viability of 41 such housing project. Such written determination shall document the 42 basis upon which the loan was determined to be eligible for evaporation. 43 § 27. Section 576-c of the private housing finance law, as amended by 44 section 2 of chapter 254 of the laws of 1998, is amended to read as 45 follows: 46 § 576-c. Loans to housing development companies by a municipality. In 47 addition to the powers granted to municipalities pursuant to this arti- 48 cle, a municipality, acting by its supervising agency, may make loans 49 for the purposes of acquisition, rehabilitation or construction of 50 dwelling accommodations to a non-profit housing development fund compa- 51 ny, a wholly-owned subsidiary of such company, a partnership the 52 controlling interest of which is held by such company and which has 53 agreed to limit profits or rate of return of investors in accordance 54 with a formula established or approved by the company, or a private 55 developer which has agreed to limit profits or rate of return of inves- 56 tors in accordance with a formula established or approved by the compa-S. 2985--B 18 1 ny, which agrees to provide housing accommodations exclusively for 2 persons and families of low income, at least thirty percent of whom are 3 referred to it by a municipality and have prior to their initial occu- 4 pancy in such accommodations resided in emergency shelter facilities 5 operated by or on behalf of the municipality or who are otherwise in 6 need of emergency shelter as determined by the municipality, providing, 7 however, that in the case of a building acquired by such a company, 8 subsidiary, partnership, or developer the obligation to provide housing 9 accommodations for such persons shall be applicable only to dwelling 10 accommodations which are or become vacant after the date of acquisition. 11 Such loans may be made for such period of time and pursuant to such 12 terms and conditions as may be required by the municipality, including, 13 but not limited to, terms and conditions providing that the lien created 14 by the note and mortgage, and, as applicable, any regulatory agreement 15 executed by the owner and such municipality, may be recorded in an equal 16 or subordinate position, or subsequently made equal or subordinate, to 17 the lien recorded by any private lender against the dwelling aided by 18 the loan made pursuant to this article, and the supervising agency of 19 such municipality may provide that the amount of the note and mortgage 20 shall automatically be reduced to zero in five equal decrements commenc- 21 ing on the tenth year after the initial occupancy date, provided that, 22 as of the date of such reduction, such accommodations have been and 23 [continues] continue to be owned and operated in a manner consistent 24 with an agreement with the municipality contained in such note and mort- 25 gage to provide housing for such persons. Notwithstanding such 26 provision as contained in the note and mortgage, the loan shall be 27 reduced to zero only if, prior to or simultaneously with delivery of 28 such note and mortgage, the supervising agency made a written determi- 29 nation that such reduction would be necessary to ensure the continued 30 affordability or economic viability of such housing project. Such writ- 31 ten determination shall document the basis upon which the loan was 32 determined to be eligible for evaporation. 33 § 28. The private housing finance law is amended by adding four new 34 sections 611, 612, 613 and 614 to read as follows: 35 § 611. Rent stabilization and regulatory agreements. 1. Notwithstand- 36 ing any other provision of law, including the provisions of, or any 37 regulation promulgated pursuant to, the emergency tenant protection act 38 of nineteen seventy-four or the rent stabilization law of nineteen 39 hundred sixty-nine, the state division of housing and community renewal, 40 when supervising housing accommodations under provisions of law other 41 than the emergency tenant protection act of nineteen seventy-four or the 42 rent stabilization law of nineteen hundred sixty-nine, the New York city 43 department of housing preservation and development, the New York state 44 urban development corporation, the New York state housing finance agen- 45 cy, the New York state housing trust fund, and the New York city housing 46 development corporation, or such other state or municipal agency, poli- 47 tical subdivision, public benefit corporation, or instrumentality as 48 the state division of housing and community renewal shall identify, may, 49 by agreement with an owner of a multiple dwelling, subject any housing 50 accommodation in such multiple dwelling to the emergency tenant 51 protection act of nineteen seventy-four or the rent stabilization law of 52 nineteen hundred sixty-nine, or both, if applicable to the municipality. 53 The requirements of such agreement shall supplement any requirements 54 imposed on such housing accommodation pursuant to any other provisions 55 of law.S. 2985--B 19 1 2. Any agreement between a state or municipal agency, political subdi- 2 vision, public benefit corporation, or instrumentality described in 3 subdivision one of this section and an owner of a multiple dwelling that 4 contains provisions that are consistent with subdivision one of this 5 section and that is in effect as of the effective date of this section 6 is and will remain valid and enforceable. 7 § 612. Compliance monitoring. 1. Any supervising agency and any corpo- 8 rate governmental agency that constitutes a public benefit corporation 9 created pursuant to this chapter shall have the power to: (a) subpoena, 10 require the attendance of and examine and take testimony under oath of 11 such persons as it deems necessary to monitor, and enforce compliance 12 with, a note, mortgage, other financing agreement, regulatory agreement, 13 deed, land disposition agreement, or restrictive covenant with or 14 approved by such agency or corporation and entered into in connection 15 with an action taken pursuant to this chapter, the general municipal 16 law, the real property tax law, or the New York city zoning resolution; 17 and (b) subpoena and require the production of books, accounts, papers, 18 documents and other evidence related to such monitoring and enforcement. 19 2. Any person who has been issued a subpoena, or any other require- 20 ment to testify or produce books and records, pursuant to subdivision 21 one of this section, shall be required to comply with such subpoena or 22 other requirement within a reasonable period of time established by the 23 supervising agency or public benefit corporation that issued such 24 subpoena. Each day in which a person fails to comply with such subpoena, 25 or with any other such requirement to testify or produce books and 26 records, shall constitute a separate violation of this section. The 27 civil penalty for each such violation shall be not more than two hundred 28 fifty dollars, provided that such penalty shall not apply to any period 29 during which such subpoena or other requirement to testify or produce 30 books and records is the subject of a pending judicial proceeding 31 commenced prior to the expiration of the period of time established by 32 such supervising agency or public benefit corporation for compliance 33 with such subpoena or other requirement to testify or produce books and 34 records. 35 3. Any such supervising agency or public benefit corporation may 36 promulgate rules and regulations to carry out the provisions of this 37 section. 38 § 613. Charges. A municipality, or a supervising agency thereunder, 39 may require the payment of charges by an owner in consideration for 40 financing, regulation, supervision and audit of loans and grants made 41 pursuant to the provisions of this chapter. Such charges shall be paid 42 into the treasury of the municipality requiring the charges and shall be 43 paid and deposited in the general fund of any such municipality. 44 § 614. Servicing loans. An agency may make provision in a note and 45 loan agreement or by separate agreement for the performance of loan or 46 grant servicing functions, including, but not limited to, functions 47 related to lending or providing a grant for construction, as may gener- 48 ally be performed by an institutional lender. Such agency may act in 49 such capacity or appoint or consent to the appointment of a financial 50 institution or other qualified entity, as determined by such agency, to 51 act in such capacity on behalf of such agency. Such agency may pay a 52 reasonable and customary fee to such financial institution or other 53 qualified entity appointed by such agency, or to whose appointment such 54 agency provided consent, for the performance of such loan or grant 55 servicing functions.S. 2985--B 20 1 § 29. Section 800 of the private housing finance law, as amended by 2 chapter 456 of the laws of 2003, is amended to read as follows: 3 § 800. Policy and purposes of article. It is hereby declared and found 4 that there exists in municipalities in this state substandard and insan- 5 itary areas and neighborhoods characterized by undermaintained and dete- 6 riorating housing accommodations and under-utilized non-residential 7 buildings and under-utilized vacant land. It is further found that there 8 exists in such municipalities a diminishing and seriously inadequate 9 supply of safe and sanitary dwelling accommodations, particularly for 10 persons of low income; that the loss of housing accommodations is caused 11 by the inability of the ordinary unaided operations of private enter- 12 prise to make loans for rehabilitation or construction purposes or for 13 conversion which accelerates the process of deterioration and abandon- 14 ment, turning active and viable neighborhoods into slums and blighted 15 areas; and that the prevention of deterioration and loss through aban- 16 donment can only be achieved by the elimination of conditions which are 17 unsafe or detrimental to health, the replacement of antiquated heating, 18 plumbing, and electrical systems and, where necessary, the overall reha- 19 bilitation of certain housing accommodations, the construction of new 20 housing accommodations on vacant land and the conversion of under-uti- 21 lized non-residential property to residential use, and that the unavail- 22 ability of funds for the conversion of under-utilized property to resi- 23 dential use, for the preservation and rehabilitation of housing 24 accommodations and for the construction of new housing accommodations on 25 vacant land constitutes a threat to the health, safety and well-being of 26 the persons who occupy them and denies to others the possibility of 27 living in safe and sanitary housing accommodations. 28 In order to promote the preservation and rehabilitation of such hous- 29 ing accommodations, the creation of new housing accommodations by the 30 conversion of under-utilized non-residential property into multiple 31 dwellings and the construction of new housing accommodations on vacant 32 land in such areas and to encourage the investment of private capital in 33 such areas, provision should be made for a municipality to attract 34 private investment for such purposes by utilizing funds, which are 35 available from the federal government through specific or discretionary 36 grants, or are available from other financing sources, for joint partic- 37 ipation loans with private investors, or loans or grants by the munici- 38 pality, to effect the required construction, rehabilitation or conver- 39 sion. 40 The necessity in the public interest for the provisions hereinafter 41 enacted is hereby declared as a matter of legislative determination. 42 § 30. Subdivision 5 of section 801 of the private housing finance law, 43 as amended by chapter 456 of the laws of 2003, is amended to read as 44 follows: 45 5. "Owner" shall mean an individual, partnership, corporation or other 46 entity, including a non-profit company, a mutual company, or a housing 47 development fund company, which holds record or beneficial title in fee 48 simple to the existing multiple dwelling to be rehabilitated or the 49 non-residential property to be converted into a multiple dwelling and 50 the real property upon which it is situate or to vacant land upon which 51 the new multiple dwelling is to be constructed, or is the lessee of any 52 such real property having an unexpired term of at least thirty years. 53 § 31. Section 801 of the private housing finance law is amended by 54 adding a new subdivision 5-a to read as follows: 55 5-a. "Participation loan" and the municipality's "participation" in, 56 "portion" of, or "investment" in a loan, or words of similar meaning,S. 2985--B 21 1 shall mean any loan or grant made by the municipality or the New York 2 city housing development corporation pursuant to this article either 3 with or without a private investor, provided, however, that provisions 4 of this article concerning the repayment or forgiveness of, or security 5 for, a loan shall not apply to any grant made pursuant to this article. 6 § 32. Subdivision 6 of section 801 of the private housing finance law, 7 as amended by chapter 456 of the laws of 2003, is amended to read as 8 follows: 9 6. "Private investor" shall mean one or more banking organizations, 10 foundations, labor unions, credit unions, employers' associations, 11 veterans' organizations, colleges, universities, educational insti- 12 tutions, child care institutions, hospitals, medical research insti- 13 tutes, insurance companies, trustees or fiduciaries, trustees of pension 14 and retirement funds and systems, corporations, partnerships, individ- 15 uals or other entities or any combination of the foregoing, and shall 16 include the United States of America and the state of New York and any 17 [of its agencies acting as a lender under the loan program pursuant to18section three hundred twelve of the housing act of nineteen hundred19sixty-four and any amendments thereto or any similar program] agency, 20 office or public benefit corporation thereof. As used in this subdivi- 21 sion, the terms "trustees" and "fiduciaries" shall include any fiduciary 22 or fiduciaries holding funds for investment, and the term "banking 23 organizations" shall have the same meaning as in subdivision eleven of 24 section two of the banking law. 25 § 33. Subdivisions 1, 3 and 4 of section 802 of the private housing 26 finance law, subdivisions 1 and 3 as amended by chapter 456 of the laws 27 of 2003 and subdivision 4 as added by chapter 822 of the laws of 1976, 28 are amended to read as follows: 29 1. (a) Notwithstanding the provisions of any general, special or local 30 law, one or more private investors and a municipality, acting through 31 its agency, shall have the power to participate and invest in making 32 loans to the owners of existing multiple dwellings or to the owners of 33 non-residential property or to the owners of vacant land subject to the 34 limitations of subdivisions two through seven of this section, in such 35 amounts as shall be required for (i) the rehabilitation of such existing 36 multiple dwellings or for the conversion of such non-residential proper- 37 ty or for the construction of [a] new multiple [dwelling] dwellings on 38 such vacant land, provided that such rehabilitation, conversion or 39 construction may include climate resiliency improvements, and if any 40 such owner acquires the existing multiple dwelling or the non-residen- 41 tial property or the vacant land for the purpose of such rehabilitation, 42 conversion or construction or owns the existing multiple dwelling or the 43 non-residential property or the vacant land subject to an outstanding 44 indebtedness, such loans may be made exclusively for or may include such 45 amounts as may be required for the cost of such acquisition or for the 46 refinancing of such outstanding indebtedness, (ii) providing site 47 improvements located on the property on which such existing multiple 48 dwellings are located or on such non-residential property or vacant land 49 or in a public right-of-way, incidental or appurtenant to such rehabili- 50 tation, conversion or construction, including, but not limited to, water 51 and sewer facilities, sidewalks, landscaping, parks and open space, 52 social, recreational, communal and other non-residential facilities and 53 the outfitting thereof, the curing of problems caused by abnormal site 54 conditions, excavation and construction of footings and foundations and 55 other improvements associated with the provision of infrastructure for 56 housing accommodations, or (iii) providing for other costs of developingS. 2985--B 22 1 housing accommodations, and such private investors and a municipality 2 may jointly participate or invest in the making of temporary loans or 3 advances to such owners in anticipation of the permanent participation 4 loans for such purposes. 5 (b) Notwithstanding the provisions of any general, special or local 6 law, and in addition to the power to make or contract to make partic- 7 ipation loans granted by paragraph (a) of this subdivision, the munici- 8 pality, acting through its agency, and the New York city housing devel- 9 opment corporation shall each have the power to make or contract to make 10 loans or grants to any owner described in paragraph (a) of this subdivi- 11 sion without the participation of a private investor, on the same terms 12 as permitted under such paragraph for a participation loan. 13 3. [(a)] Each participation loan shall be secured by a bond or note 14 and single participating mortgage or by separate bonds or notes and 15 mortgages upon the existing multiple dwelling or the non-residential 16 property and the land upon which it is situated or, in the case of the 17 construction of a new multiple dwelling, upon the vacant land and the 18 multiple dwelling to be constructed, or, in the case of a multiple 19 dwelling held in the condominium form of ownership, a note and mortgage 20 upon the condominium units rehabilitated with such participation loan, 21 provided that a participation loan to an owner who is a lessee shall be 22 secured by a leasehold interest in such property, and provided, further, 23 that each such loan shall be made upon such terms and conditions as may 24 be approved by the agency, including but not limited to, provisions that 25 [(i)] (a) priority may be given to the payment of the principal of and 26 interest on that portion of the mortgage indebtedness attributable to 27 participation in the loan by one or more private investors, [(ii)] (b) 28 the interest of the municipality created as a result of making such a 29 mortgage loan may be subordinated to the interest that one or more of 30 such private investors may have upon such participation, [(iii)] (c) the 31 interest of each upon such participation need not be of equal priority 32 as to lien nor be equal as to interest rate, time or rate of amorti- 33 zation of principal or time of payment of interest, or otherwise, [(iv)] 34 (d) the bond or note and mortgage may provide that the municipality's 35 portion of a participation loan made to an owner shall be reduced to 36 zero commencing in the fifteenth year after the execution of the bond or 37 note and mortgage, provided that, as of the date of any such reduction, 38 such multiple dwelling has been and continues to be owned and operated 39 in a manner consistent with a regulatory agreement with the munici- 40 pality. Notwithstanding such provision as contained in the bond or note 41 and mortgage, the municipality's portion of the loan shall be reduced to 42 zero only if, prior to or simultaneously with delivery of such bond or 43 note and mortgage, the agency made a written determination that such 44 reduction would be necessary to ensure the continued affordability or 45 economic viability of the multiple dwelling. Such written determination 46 shall document the basis upon which the loan was determined to be eligi- 47 ble for evaporation. 48 [(b) The aggregate amount of each such participation loan shall not49exceed the cost of the rehabilitation, conversion or construction, plus50the costs of any or all undertakings necessary for the planning, financ-51ing, acquisition, satisfaction of tax liens and other municipal liens52and encumbrances, construction, equipment and development in connection53therewith, provided that, if any portion of such loan is used for the54cost of acquisition or for refinancing, the amount of a municipality's55portion of such loan shall not exceed one and one-half times the cost of56rehabilitation, conversion or construction.S. 2985--B 23 1(c) The amount of any such loan, together with the amount of all prior2liens and encumbrances, shall not exceed, except in the case of a loan3made to a non-profit company, a mutual company, or a housing development4fund company, ninety per centum of value unless the agency makes a writ-5ten determination that the owner has insufficient resources to pay for6the remaining ten per centum of value, in which case such loan shall not7exceed ninety-five per centum of value. The amount of any such loan,8together with the amount of all prior liens and encumbrances, made to a9non-profit company, a mutual company, or a housing development fund10company shall not exceed value, provided that when after completion of11such rehabilitation, conversion or construction, such multiple dwelling12is, or is to be operated, exclusively for the benefit of persons and13families who are entitled to occupancy by reason of ownership of stock14in the corporate owners, such loan shall not exceed ninety-eight per15centum of value unless the agency makes a written determination that the16owner has insufficient resources to pay for the remaining two per centum17of value, in which case such loan shall not exceed value.] 18 4. Each such bond or note and mortgage or bonds or notes and mortgages 19 shall be repaid over or within a period of [thirty] forty years, 20 provided that such period may be extended as the agency may determine 21 necessary to ensure the continued affordability or economic viability of 22 the multiple dwelling, in such manner as may be provided in such bond or 23 note and mortgage or bonds or notes and mortgages [but in no case shall24the term of such loan exceed the probable life of the multiple dwelling25which is hereby determined to be thirty years]. Such bond or note and 26 mortgage or bonds or notes and mortgages and any contract in connection 27 with such permanent and temporary loans may contain such other terms and 28 provisions not inconsistent with the provisions of this article as the 29 local legislative body or the agency may deem necessary or desirable to 30 secure repayment of the loan, the interest thereon and other charges in 31 connection therewith and to carry out the purposes and provisions of 32 this article. 33 § 34. Subdivisions 2, 3 and 6 of section 1151 of the private housing 34 finance law, subdivision 2 as amended by chapter 567 of the laws of 1993 35 and subdivisions 3 and 6 as added by chapter 639 of the laws of 1989, 36 are amended to read as follows: 37 2. "Eligible project" shall mean a project intended to construct new 38 housing accommodations on an eligible site by new construction or 39 substantial rehabilitation, provided that such new construction or 40 substantial rehabilitation may include climate resiliency improvements. 41 An eligible project shall serve the needs of persons of low income, 42 including privately-owned one to four family dwellings, condominiums and 43 cooperatives, and rental projects. 44 3. ["Development costs" shall mean the reasonable and necessary costs45for planning, financing, acquisition of land or buildings and46construction of new buildings or the reconstruction, rehabilitation,47repair or remodeling of existing buildings and the costs of necessary48site improvements] "Participation loan" and the city's "participation" 49 in, "portion" of, or "investment" in a loan, or words of similar mean- 50 ing, shall mean any loan or grant made by the agency pursuant to this 51 article either with or without a private lender, provided, however, that 52 provisions of this article concerning the repayment or forgiveness of, 53 or security for, a loan shall not apply to any grant. 54 6. "Loan" shall mean a [first] mortgage loan made by a private lender 55 in participation with the city of New York to a sponsor for the purpose 56 of construction of an eligible project including a loan in which theS. 2985--B 24 1 portion of the loan funded by the agency is represented by a separate 2 note and mortgage. 3 § 35. Section 1152 of the private housing finance law, as added by 4 chapter 639 of the laws of 1989, subdivision 4 as amended and subdivi- 5 sion 13 as added by chapter 241 of the laws of 1998, subdivision 12 as 6 added by chapter 400 of the laws of 1994 and paragraph e of subdivision 7 12 as amended by chapter 118 of the laws of 2003, is amended to read as 8 follows: 9 § 1152. Affordable housing development loans. 1. (a) Notwithstanding 10 the provisions of any general, special or local law, one or more private 11 lenders and the city of New York, acting through the agency, shall have 12 the power to participate and invest in making loans to sponsors for the 13 construction of eligible projects. Such loans may be made exclusively 14 for or may include such amounts as may be required for site acquisition 15 or the refinancing of eligible projects. Each such participation loan 16 shall be secured by a bond or note and single participating mortgage or 17 by separate bonds or notes and mortgages upon the eligible project. Such 18 bond or note and mortgage or bonds or notes or mortgages may contain 19 such other terms and provisions not inconsistent with the provisions of 20 this article as the agency may deem necessary or desirable, including, 21 but not limited to, terms providing that the lien created by such note 22 and mortgage, and, if applicable, any regulatory agreement executed by 23 the sponsor and such agency or restrictive covenant approved by such 24 agency, may be recorded in an equal or subordinate position, or subse- 25 quently made equal or subordinate, to the lien created by any private 26 lender against such eligible project. 27 (b) Notwithstanding the provisions of any general, special or local 28 law, and in addition to the power to make or contract to make partic- 29 ipation loans granted by paragraph (a) of this subdivision, the city of 30 New York, acting through the agency, shall have the power to make or 31 contract to make loans or grants to any owner described in paragraph (a) 32 of this subdivision without the participation of a private lender, on 33 the same terms as permitted under such paragraph for a participation 34 loan. 35 2. [The portion of such loan funded by the agency shall not exceed an36amount equal to sixty percent of the actual total development cost of an37eligible project.] The agency may enter into an agreement with a private 38 lender to deposit its share of a loan with the private lender to be 39 advanced by the private lender. The portion of the loan funded by the 40 agency may be equal to or subordinate in lien to the portion of the loan 41 funded by the private lender and may contain such terms with respect to 42 interest rate, if any, rate of amortization of principal, if any, and 43 time of payment of interest and principal as determined by the agency. 44 The agency may make provision either in the mortgage or mortgages or by 45 separate agreement for the performance by the private lender of such 46 services as are generally performed by a banking institution which 47 itself holds a mortgage, including, without limitation, construction 48 loan advances, construction supervision, initiation of foreclosure 49 proceedings, procurement of insurance, and all other matters in 50 connection with the financing, supervision, regulation and audit of any 51 such loan to any such eligible project. 52 3. [If a portion of the loan is to be utilized for acquisition of an53eligible site such portion shall in no event exceed fifteen percent of54the total amount of such loan or the appraised value of the site, which-55ever is the lesser.S. 2985--B 25 14.] If the eligible project is to consist of one to four unit dwelling 2 accommodations or cooperative or condominium units, the agency's share 3 of the loan may be converted after completion of construction into mort- 4 gages on such dwelling accommodations or condominium units or financing 5 statements filed with respect to such cooperative shares, provided such 6 units or such cooperative shares are purchased by persons of [eligible] 7 low income. Such mortgages and any blanket mortgage that the agency 8 retains on any portion of, or on all of, the eligible project may 9 provide that [they] such mortgages and such blanket mortgage will auto- 10 matically be reduced to zero over a period of continuous [owner-occupan-11cy of the housing accommodations assisted by such loan] compliance by 12 the mortgagor with a regulatory agreement or restrictive covenant with 13 or approved by the agency and upon the satisfaction of any additional 14 conditions specified therein. Notwithstanding such provision as 15 contained in such mortgage, the loan shall be reduced to zero only if, 16 prior to or simultaneously with delivery of such mortgage, the agency 17 made a written determination that such reduction would be necessary to 18 ensure the continued affordability or economic viability of the eligible 19 project. Such written determination shall document the basis upon which 20 the loan was determined to be eligible for evaporation. Such period of 21 continuous [owner-occupancy] compliance with such regulatory agreement 22 or restrictive covenant shall not be less than fifteen years. 23 [5.] 4. If the eligible project is to consist of one to four unit 24 dwelling accommodations or cooperative or condominium units, the agency 25 shall require that the dwelling units be offered only to bona fide 26 purchasers who intend to occupy a unit as their principal place of resi- 27 dence; provided, however, that in the case of two to four unit dwelling 28 accommodations the bona fide purchaser may occupy only a single unit as 29 a principal place of residence. If the purchaser ceases to occupy the 30 unit as a principal place of residence, the agency may provide for 31 recapture of all or a portion of the agency's share of the loan. 32 [6.] 5. If the eligible project is a rental project, the agency's 33 share of the loan may be converted after completion of construction into 34 a [non-interest bearing, non-amortizing thirty year loan] permanent loan 35 with a term of forty years, provided that such period may be extended as 36 the agency may determine is necessary to ensure the continued afforda- 37 bility or economic viability of the eligible project, payable [at the38end of its term, provided that such loan shall be also payable out of39profits upon any sale or refinancing of the project prior to the end of40such thirty year period] in such manner as may be provided in the note 41 and any mortgage in connection with such loan. Such note and mortgage 42 may contain such terms and conditions as the agency may deem necessary 43 or desirable to effectuate the purposes and provisions of this article. 44 The sponsor or any subsequent owner or owners of such a project shall 45 agree to rent such units only to persons of [eligible] low income for 46 such [thirty year] period [and shall agree that all] as the agency may 47 determine. All such units shall be subject to the emergency tenant 48 protection act of nineteen seventy-four and the rent stabilization law 49 of nineteen hundred sixty-nine, as amended [for a period of thirty years50after initial occupancy], unless converted to a cooperative or condomin- 51 ium pursuant to subdivision [eight] seven of this section. [At the end52of such period each unit shall continue to be subject to such law there-53after until the first vacancy occurs at which time the unit shall be54decontrolled.] Initial rentals for all rental units shall be set by the 55 agency.S. 2985--B 26 1 [7.] 6. If the eligible project is a rental project annual profits 2 shall be limited to an amount set by the agency for as long as the loan 3 is outstanding. Excess profits shall be used to establish project 4 reserves, provide capital improvements or reduce the principal amount of 5 the agency's loan, as determined by the agency. 6 [8.] 7. If the eligible project is a rental project, no conversion to 7 a cooperative or condominium shall be permitted for a period of twenty 8 years after initial occupancy, and unless (i) the agency's share of the 9 loan is prepaid upon such conversion, (ii) the conversion shall be done 10 pursuant to section three hundred fifty-two-eeee of the general business 11 law as a non-eviction plan, and (iii) apartments occupied by non-pur- 12 chasing tenants continue to be subject to the rent stabilization law of 13 nineteen hundred sixty-nine as amended, until the occurrence of a vacan- 14 cy. 15 [9.] 8. A loan made pursuant to this article shall be exempt from the 16 mortgage recording taxes imposed by article eleven of the tax law. 17 [10.] 9. Notwithstanding the provisions of any general, special or 18 local law or charter, the agency shall have power, without soliciting 19 competing bids, to contract with any sponsor or to make provision in a 20 loan for the construction or reconstruction of any site improvements 21 located in the public right-of-way or on the eligible site which are 22 necessary for the development of an eligible project. Such site improve- 23 ments may include, but shall not be limited to, streets, sidewalks, 24 landscaping, parks and open space, social, recreational, communal and 25 other non-residential facilities and the outfitting thereof, lighting 26 fixtures, and water and sewer lines, incidental or appurtenant to the 27 construction of such eligible projects. 28 [11.] 10. No loan shall be made pursuant to the provisions of this 29 article unless the agency finds that: (a) the construction of the eligi- 30 ble project does not directly displace current low and moderate income 31 residents of the eligible site; (b) the eligible project leverages 32 private and other public investment, if any, so as to reduce the amount 33 of assistance provided pursuant to this article to the minimal amount 34 which is necessary for construction of the eligible project; (c) the 35 eligible project will be built by a private developer/builder who has 36 agreed to limit its profit in accordance with a formula satisfactory to 37 the agency; (d) the eligible project will provide assistance to an area 38 which is blighted or deteriorated or has a blighting influence on the 39 surrounding area, or is in danger of becoming a slum or a blighted area 40 because of neighborhood conditions indicating an inability or unwilling- 41 ness of the private sector to cause the type of construction for which a 42 loan is to be provided; and (e) the eligible project will make home 43 ownership or rental housing affordable to persons who cannot presently 44 afford the housing available based upon the ordinary unaided operation 45 of private enterprise. 46 [12.] 11. a. The agency may make non-interest bearing advances to 47 sponsors to defray the pre-development costs of eligible projects in 48 accordance with the provisions of this chapter. 49 b. No such advances shall be made unless the agency finds that: (i) 50 the sponsor proposes to finance the eligible project in whole or in part 51 by a loan granted pursuant to this article or that the project, if 52 otherwise financed, will provide housing for persons or families of low 53 income, and that such project is otherwise consistent with the purposes 54 of this article; (ii) the project site is suitable, there is a need for 55 the housing type proposed in the area to be served and the project isS. 2985--B 27 1 feasible; and (iii) it is reasonable to anticipate that financing will 2 be obtained and the agency makes a finding to that effect. 3 c. No such advances may be made to a sponsor unless such sponsor 4 enters into an agreement with the agency which provides that such spon- 5 sor shall be regulated with respect to rents, profits, dividends and 6 disposition of its property or franchise, in accordance with the 7 provisions of this article. 8 d. An advance granted pursuant to this section shall be used only to 9 defray the pre-development costs of eligible projects. For purposes of 10 this subdivision, the term pre-development costs shall include, but 11 shall not be limited to: the reasonable and necessary costs for plan- 12 ning, site preparation, developing architectural drawings and conducting 13 engineering and environmental studies, but shall not include acquisition 14 of land or buildings, drainage and landscaping of vacant land, 15 construction of new buildings or the reconstruction or rehabilitation of 16 existing buildings. 17 e. Each such advance shall be repaid in full to the agency by the 18 sponsor. Such repayment shall be made upon receipt by the sponsor or its 19 successor in interest of the proceeds of its mortgage or construction 20 loan for the eligible project, unless the agency extends the period for 21 the repayment of such advances. In no event shall the time of repayment 22 be extended to a date later than the date of final advance of funds 23 pursuant to such mortgage or construction loan. Notwithstanding this 24 paragraph, the agency may reduce such advance to zero over a period of 25 continued compliance with the agency's agreement with the sponsor pursu- 26 ant to paragraph c of this subdivision if the agency has made a written 27 determination that such reduction would be necessary to ensure the 28 continued affordability or economic viability of the eligible project. 29 Such written determination shall document the basis upon which the agen- 30 cy's non-interest bearing advance was determined eligible for evapo- 31 ration. 32 f. If the agency, in its discretion, determines at any time that mort- 33 gage or construction financing for the eligible project may not be 34 obtained, then all advances made to the sponsor pursuant to this subdi- 35 vision shall become immediately due and payable upon the demand of the 36 agency. 37 [13.] 12. If the eligible project is a rental project, the bond or 38 note and mortgage or bonds or notes or mortgages issued by the sponsor 39 of any eligible project to secure a participation loan may provide that 40 the city's portion of such loan shall be reduced to zero commencing on 41 the fifteenth year after the execution of such bond or note and mortgage 42 or bonds or notes or mortgages, provided that, as of the date of any 43 such reduction, the eligible project has been and continues to be owned 44 and operated in a manner consistent with a regulatory agreement with the 45 city. Notwithstanding such provision as contained in the bond or note 46 and mortgage or bonds or notes or mortgages, the loan shall be reduced 47 to zero only if, prior to or simultaneously with delivery of such bond 48 or note and mortgage or bonds or notes or mortgages, the agency made a 49 written determination that such reduction would be necessary to ensure 50 the continued affordability or economic viability of the eligible 51 project. Such written determination shall document the basis upon which 52 the loan was determined to be eligible for evaporation. 53 § 36. Paragraph (g) of subdivision 6 of section 1802 of the charter of 54 the city of New York, as amended by vote of the people of the city of 55 New York at the general election held in November of 1989, is amended to 56 read as follows:S. 2985--B 28 1 (g) [impose and collect] require the payment of charges [and fees] in 2 consideration for the financing, regulation, supervision and audit of 3 municipally-aided projects and loan programs administered by the commis- 4 sioner, which charges [and fees] shall be [set aside in a special5account for administrative expenses of the department] paid into the 6 treasury of the city and shall be paid and deposited in the general fund 7 of the city; 8 § 37. This act shall take effect immediately, provided that: (i) the 9 amendments to subdivision 1 of section 696-a of the general municipal 10 law made by section two of this act shall be subject to the expiration 11 and reversion of such subdivision pursuant to section 2 of chapter 613 12 of the laws of 1996, as amended, when upon such date the provisions of 13 section three of this act shall take effect; and (ii) the amendments to 14 subdivision 1 of section 576-c of the private housing finance law made 15 by section twenty-six of this act shall be subject to the expiration and 16 reversion of such subdivision pursuant to section 2 of chapter 84 of the 17 laws of 1993, as amended, when upon such date the provisions of section 18 twenty-seven of this act shall take effect.
