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A06655 Summary:

BILL NOA06655A
 
SAME ASSAME AS S02985-C
 
SPONSORRosenthal L
 
COSPNSR
 
MLTSPNSR
 
Amd 696-a, add 696-e & 696-f, Gen Muni L; amd 11.00, Loc Fin L; amd Priv Hous Fin L, generally; amd 1802, NYC Chart
 
Enacts the "housing affordability, resiliency, and energy efficiency investment act"; relates to the modernization of affordable housing financing authorities that authorize financing for the construction and rehabilitation of affordable housing.
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A06655 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6655A
 
SPONSOR: Rosenthal L
  TITLE OF BILL: 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 energy efficien- cy investment act of 2023"   PURPOSE OF BILL: This bill amends provisions in the General Municipal Law (GML), Local Finance Law (LFL), Private Housing Finance Law (PHFL), and the New York City Charter to modernize decades-old statutes that authorize financing for the construction and rehabilitation of affordable housing   SUMMARY OF PROVISIONS: Section 1 of the bill sets forth the short title as the "Housing Afford- ability, Resiliency, and Energy Efficiency Investment Act of 2023." Sections 2-4 of the bill amend Article 16 of the General Municipal Law (GML), which authorizes loans and grants for urban development action area projects in cities with a population of 100,000 or more and in the Town of Huntington (see GML § 692, subdivisions 2 and 4). These sections of the bill would broaden the existing authority for loans and grants for related nonresidential improvements, modernize ownership require- ments (including to broaden the definition of "owner" to include certain ground lessees), clarify the authority to construct new homes and multi- ple dwellings, allow for the subordination of a lien arising from a municipal loan to a lien recorded by another lender, and provide for loan and grant servicing in line with other existing authorities. A new section that would be added to Article 16 would authorize the imposition of charges on an owner in connection with such loans and grants, and would direct any payment of such charges to the general fund of the municipality imposing such charges. Section 5 of the bill amends Section 11 of the Local Finance Law (LFL) to conform the authority it conveys to the amendments made to the Private Housing Finance Law (PHFL) by this bill. Section 6 of the bill amends Article 1 of the PHFL to add definitions of "climate resiliency improvements" and "private lender." Sections 7-13 of the bill amend Article 8 of the PHFL, which authorizes loans for the rehabilitation of multiple dwellings, in order to allow for longer loan terms, remove outdated limits on loan amounts, modernize ownership requirements, allow for acquisition- and refinancing-only loans, authorize grants, authorize loans and grants for climate resili- ency improvements, allow for the subordination of a lien arising from a loan from a municipality to a lien recorded by a private lender, and make other necessary clean-up changes including removing outdated income calculation requirements. Section 11 would amend section 402 of the PHFL to authorize an agency to require the payment of charges by an owner in connection with loans and grants under Article 8 and to direct the payment of these charges to the general fund of the municipality impos- ing such charges. Sections 14-18 of the bill amend Article 8-A of the PHFL, which author- izes loans for the moderate rehabilitation of multiple dwellings, in order to allow for longer loan terms, remove outdated limits on loan amounts, modernize ownership requirements, authorize grants, authorize loans and grants for climate resiliency improvements, allow for the subordination of a lien arising from a loan from a municipality to a lien recorded by a private lender, and make other necessary clean-up changes. Section 17 would amend section 452 of the PHFL to authorize a supervising agency to require the payment of charges by an owner in connection with loans and grants under Article 8-A and to direct the payment of these charges to the general fund of the municipality impos- ing these charges. Sections 19-25 of the bill amend Article 8-B of the PHFL, which author- izes loans for the rehabilitation of 1-4 family homes by a municipality (any city, town or village; see PHFL § 471, subdivision 7), to allow for longer loan terms, remove outdated limits on loan amounts, modernize ownership requirements (including to allow for loans to ground lessees and for homes owned by trusts formed for estate-planning purposes), allow for acquisition- and refinancing-only loans (including down-pay- ment assistance loans), authorize grants, authorize loans and grants for climate resiliency improvements, allow for the subordination of a lien arising from a loan from a municipality to a lien recorded by a private lender, and make other necessary clean-up changes. Section 22 would amend section 472 of the PHFL to authorize an agency to require the payment of charges in connection with loans and grants under Article 8-B and to direct the payment of these charges to the general fund of the municipality imposing such charges. Sections 26 and 27 of the bill amend Article 11 of the PHFL, which authorizes loans by counties, cities, towns, and villages to housing development fund companies (HDFC) for the acquisition, rehabilitation, and construction of multiple dwellings, to allow a municipality's lend- ing entity providing such loans to HDFCs to subordinate liens arising from a loan or grant made to such a company to liens recorded by a private lender. Section 28 of the bill amends Article 13 of the PHFL to provide express statutory authorization for agreements that subject dwelling units to rent stabilization. Section 28 also amends Article 13 to provide the New York City Department of Housing Preservation and Development (HPD), the New York State Housing Finance Agency (HFA), and the New York City Hous- ing Development Corporation (HDC) with subpoena power to support moni- toring for compliance with affordable housing agreements and to author- ize civil penalties if a party fails to comply with such a subpoena. In addition, section 28 amends Article 13 to authorize a municipality or its supervising agency to require the payment of charges in connection with loans and grants under the PHFL and to direct the payment of these charges to the general fund of the municipality imposing such charges. Section 28 also authorizes an agency to provide for customary servicing of any loan or grant made pursuant to the PHFL and to pay a reasonable and customary fee for such servicing. Sections 29-33 of the bill amend Article.15 of the PHFL, which author- izes loans for the rehabilitation and new construction of multiple dwellings and for the conversion of nonresidential to residential prop- erty, in order to allow for longer loan terms, remove outdated limits on loan amounts, modernize ownership requirements (including to broaden the authority for loans to ground lessees), allow for acquisition- and refi- nancing-only loans, authorize grants, allow for loans where there is no other lender to the project, allow for loans or grants for related nonresidential improvements and climate resiliency improvements, and make other necessary clean-up changes. Sections 34-35 of the bill amend Sections 1151 and 1152 of Article 22 of the PHFL, which authorizes loans for the acquisition, substantial reha- bilitation and new construction of private and multiple dwellings in New York City, in order to allow for longer loan terms, remove outdated limits on loan amounts, modernize ownership requirements, allow for acquisition- and refinancing-only loans, authorize grants, allow for loans where there is no other lender to the project, allow for loans or grants for related non-residential improvements and climate resiliency improvements, allow for the subordination of a lien arising from a City loan to a lien recorded by a private lender, and make other necessary clean-up changes. Section 36 of the bill amends section 1802 of the New York City Charter to authorize HPD to require the payment of charges in connection with any loan or grant made pursuant to a municipally-aided project or loan program administered by HPD and to require that these charges be paid into the general fund of New York City. Section 37 of the bill sets forth the effective date.   JUSTIFICATION: The Housing Affordability, Resiliency, and Energy Efficiency Investment Act of 2023 would modernize existing financing programs that are crit- ical to supporting construction, maintenance, and rehabilitation of affordable housing. In addition, the HAREEIA would ensure that these programs are able to support resiliency improvements that are increas- ingly critical in light of the growing threat posed by extreme weather and other effects of climate change, as well as efficiency upgrades that will save New Yorkers money on energy costs and help achieve the state's goals under the Climate Leadership and Community Protection Act. The bill would improve the lending terms of local lending entities from the current 30 years to 40 years with extensions, as is already the case with loan terms from the state and federal governments, which would allow for the creation and preservation of more affordable housing while saving public resources. Most of the existing authorities are limited to 30-year loan terms. The bill would add language to certain loan authorities to allow for loans to finance childcare centers, senior centers, and other non-resi- dential facilities. Due to loan terms established in the 1970s and 1980s, under very different financial conditions, a local lending entity cannot loan more than $35,000 per dwelling unit for moderate rehabs, and $60,000 per dwelling unit for 1-4 unit homes. This bill would remove the dollar caps on loans so that loans can be made based on current market conditions, which would enable municipalities to assist more homeowners with needed improvements. As noted above, the bill would extend loan authorities to climate resiliency improvements, which would allow municipalities to proactively loan solely for climate resiliency improvements in a way they have not been able to, thus strengthening climate resiliency in the state's housing stock. Currently, local lend- ing entities cannot make loans solely for climate resiliency improve- ments such as solar panels, moving utility systems to roofs, or elevat- ing foundations to prepare for potential flooding. The bill would enable loans to ground lessees, which would support Community Land Trusts (CLTs) and other projects where a ground lease structure is needed for the creation and preservation of permanently affordable units under a CLT. Currently, local lending entities have very limited authority to make loans where there is a ground lease, which is a common structure for CLTs. The bill would allow loans for 1-4 unit non-owner-occupied housing by specifying that the owner is broader than an owner-occupant, and includes living trusts, nonprofits, and LLCs. This would enable locali- ties to support tenants whose apartments need repairs, regardless of the ownership structure of the homes. Current loan authority for 1-4 unit homes only allows loans to owner-occupants. The bill would expand the number of New Yorkers who can afford down payments by allowing munici- palities to use their own funds to provide down payment assistance for prospective home buyers. Currently, down payment assistance can only be provided using federal funds. Taken together, the provisions of the Housing Affordability, Resiliency, and Energy Efficiency Investment Act would allow municipalities to leverage their expanded lending authority to meet their area's need to create and maintain affordable housing, improve climate resiliency and energy efficiency, and support the preservation of housing under diverse ownership structures.   LEGISLATIVE HISTORY: This is a new bill.   FISCAL IMPLICATIONS: This bill will have minimal fiscal implication for the State. Local fiscal implications will depend on the extent to which local agencies make use of expanded opportunities to invest in the construction and rehabilitation of affordable housing, resiliency, and energy improve- ments.   EFFECTIVE DATE: This act shall take effect immediately, provided that: (i) the amend- ments to subdivision 1 of section 696-a of the general municipal law made by section two of this act -shall be subject to the expiration and reversion of such subdivision pursuant to section 2 of chapter 613 of the laws of 1996, as amended, when upon such date the provisions of section three of this act shall take effect; and (ii) the amendments to subdivision 1 of section 576-c of the private housing finance law made by section twenty-six of this act shall be subject to the expiration and reversion of such subdivision pursuant to section 2 of chapter 84 of the laws of 1993, as amended, when upon such date the provision of section twenty-seven of this act shall take effect.
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A06655 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6655--A
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                     April 25, 2023
                                       ___________
 
        Introduced  by  M.  of  A. L. ROSENTHAL -- read once and referred to the
          Committee on Housing -- committee discharged,  bill  amended,  ordered
          reprinted as amended and recommitted to said committee
 
        AN  ACT  to  amend the general municipal law, the local finance law, the
          private housing finance  law,  and  the  New  York  city  charter,  in
          relation to enacting the "housing affordability, resiliency, and ener-
          gy efficiency investment act of 2023"
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "housing affordability, resiliency, and energy efficiency investment
     3  act of 2023".
     4    §  2.  Paragraphs  a, c and g of subdivision 1 of section 696-a of the
     5  general municipal law, as amended by chapter 320 of the  laws  of  1999,
     6  are amended to read as follows:
     7    a.  Notwithstanding  the  provisions  of any general, special or local
     8  law, an agency is hereby authorized to make or contract to  make  grants
     9  or  loans to the owner of any property that is part of an urban develop-
    10  ment action area project for the purpose of  (i)  rehabilitation  of  an
    11  existing  private  or multiple dwelling or construction of a new private
    12  or multiple dwelling, (ii) providing site  improvements,  incidental  or
    13  appurtenant  to  such  rehabilitation  or  such construction, within the
    14  urban development action area in which the urban development action area
    15  project is located, including, but  not  limited  to,  water  and  sewer
    16  facilities, sidewalks, landscaping, parks and open space, social, recre-
    17  ational,  communal  and other non-residential facilities and the outfit-
    18  ting thereof, the curing of problems caused by abnormal site conditions,
    19  excavation and  construction  of  footings  and  foundations  and  other
    20  improvements  associated  with the provision of infrastructure, or (iii)
    21  providing for other costs of construction for the development of private
    22  and multiple dwelling housing accommodations.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10921-02-3

        A. 6655--A                          2
 
     1    c. Any loan made in accordance with this section shall be secured by a
     2  note and mortgage upon the property improved, other than any such  prop-
     3  erty  title  to  which  is held by the municipality or, in the case of a
     4  condominium, a note and mortgage upon  each  of  the  [housing  accommo-
     5  dations] condominium units aided by such loan, or in the case of a coop-
     6  erative  housing  corporation,  a  note  and  mortgage upon the economic
     7  interest in such corporation of each tenant-shareholder  aided  by  such
     8  loan,  or upon the property improved, other than any such property title
     9  to which is held by the municipality, or upon both such economic  inter-
    10  est  or  property;  provided, however, that all or part of any such loan
    11  may be unsecured if necessary to satisfy the requirements of any partic-
    12  ipating lender, and, provided further, that the lien created by the note
    13  and mortgage may be recorded in an equal  or  subordinate  position,  or
    14  subsequently  made  equal  or  subordinate,  to  a  lien recorded by any
    15  participating lender against such property. Such loan  shall  be  repaid
    16  over such period as the agency shall determine.
    17    g.  For  purposes  of  this [section] article, (i) the term "mortgage"
    18  shall include any pledge or assignment of  shares  or  assignment  of  a
    19  proprietary lease in a cooperative housing corporation where such pledge
    20  or  assignment  is  intended as security for the performance of an obli-
    21  gation and which imposes a lien on or affects title to  such  shares  or
    22  such proprietary lease; and (ii) the term "owner" shall mean an individ-
    23  ual,  partnership,  corporation  or other entity, including a non-profit
    24  company, a mutual company, or a housing development fund company, having
    25  record or beneficial title in fee simple to real property or the  lessee
    26  thereof under a lease having a term of at least forty-nine years.
    27    § 3. Section 696-a of the general municipal law, as amended by chapter
    28  465 of the laws of 1993, is amended to read as follows:
    29    § 696-a. Loans. Notwithstanding the provisions of any general, special
    30  or local law, an agency is hereby authorized to make or contract to make
    31  grants  or  loans[: (i)] to the owner of any property that is part of an
    32  urban development action area project for the purpose of: (i)  rehabili-
    33  tation  of an existing private or multiple dwelling or construction of a
    34  new private or multiple dwelling, (ii) [for the  purpose  of]  providing
    35  site  improvements,  incidental or appurtenant to such rehabilitation or
    36  such construction, within the urban development action area in which the
    37  urban development action area project is  located,  including,  but  not
    38  limited  to,  water  and sewer facilities, sidewalks, landscaping, parks
    39  and open space, social, recreational, communal and other non-residential
    40  facilities and the outfitting thereof, the curing of problems caused  by
    41  abnormal  site  conditions,  excavation and construction of footings and
    42  foundations and other improvements  associated  with  the  provision  of
    43  infrastructure,  or (iii) [for the purpose of] providing for other costs
    44  of construction for the development of  private  and  multiple  dwelling
    45  housing  accommodations.  In the case of a grant made under this section
    46  for the rehabilitation of an existing multiple dwelling intended  to  be
    47  converted  to  a condominium or cooperative form of ownership or for the
    48  development of one to four unit housing accommodations or a  condominium
    49  or cooperative housing corporation, such grant shall require a regulato-
    50  ry  agreement with the agency limiting profits. Any loan made in accord-
    51  ance with this section shall be secured by a note and mortgage upon  the
    52  property  improved,  other than any such property title to which is held
    53  by the municipality, or, in the case of a condominium, a note and  mort-
    54  gage  upon  each of the [housing accommodations] condominium units aided
    55  by such loan, or in the case of a  cooperative  housing  corporation,  a
    56  note and mortgage upon the economic interest in such corporation of each

        A. 6655--A                          3
 
     1  tenant-shareholder  aided  by  such loan, or upon the property improved,
     2  other than any such property title to which is held by the municipality,
     3  or upon both such economic interest or property; provided, however, that
     4  all  or  part  of any such loan may be unsecured if necessary to satisfy
     5  the requirements of any participating lender.  Such loan shall be repaid
     6  over such period as the agency shall determine. In the case  of  a  loan
     7  for  rehabilitation  of  an  existing  multiple  dwelling intended to be
     8  converted to a condominium or cooperative form of ownership  or  a  loan
     9  for  the provision of infrastructure or for the provision of other costs
    10  of construction for the development of one to four unit housing accommo-
    11  dations or a condominium or cooperative housing corporation,  such  note
    12  and mortgage may provide that the loan shall automatically be reduced to
    13  zero  over  a  period  of  owner-occupancy of the housing accommodations
    14  assisted by such loan. In the case of a grant or loan  made  under  this
    15  section  for  the purpose of providing rental housing for persons of low
    16  income as defined in section two of the  private  housing  finance  law,
    17  such  loan or grant shall require a regulatory agreement with the agency
    18  limiting profits and rentals charged. In the case of a loan  made  under
    19  this  section for the purpose of providing rental housing for persons of
    20  low income as defined in section two of the private housing finance law,
    21  such note and mortgage may provide that the loan shall automatically  be
    22  reduced to zero over a period of up to thirty years of compliance by the
    23  owner  with  a regulatory agreement with the agency limiting profits and
    24  rentals charged. The repayment of any loan made in accordance with  this
    25  section shall be made in such manner as may be provided in such note and
    26  mortgage in connection with such loan, and may authorize the owner, with
    27  the  consent  of the agency, to prepay the principal of the loan subject
    28  to such terms and conditions as therein provided. Such note and mortgage
    29  may contain such other terms and conditions not  inconsistent  with  the
    30  provisions of this article as the agency may deem necessary or desirable
    31  to  carrying  out the purposes and provisions of this article including,
    32  but not limited to, provisions concerning the repayment of the loan, the
    33  interest, if any, thereon, and other charges  in  connection  therewith.
    34  For  purposes  of  this [section] article, (1) the term "mortgage" shall
    35  include any pledge or assignment of shares or assignment of  a  proprie-
    36  tary  lease  in  a  cooperative housing corporation where such pledge or
    37  assignment is intended as security for the performance of an  obligation
    38  and  which  imposes  a  lien  on or affects title to such shares or such
    39  proprietary lease; and (2) the term "owner" shall  mean  an  individual,
    40  partnership,  corporation or other entity, including a non-profit compa-
    41  ny, a mutual company, or a  housing  development  fund  company,  having
    42  record  or beneficial title in fee simple to real property or the lessee
    43  thereof under a lease having a term of at least forty-nine years.
    44    § 4. The general municipal law is amended by adding two  new  sections
    45  696-e and 696-f to read as follows:
    46    § 696-e. Charges. A municipality, or an agency, making a loan or grant
    47  pursuant to this article, may require the payment of charges by an owner
    48  in consideration for the financing, regulation, supervision and audit of
    49  such  loan, or for regulation, supervision and audit of such grant. Such
    50  charges shall be paid into the treasury of  the  municipality  requiring
    51  the  charges  and shall be paid and deposited in the general fund of any
    52  such municipality.
    53    § 696-f. Servicing. An agency may make provision in a  note  and  loan
    54  agreement  or by separate agreement for the performance of loan or grant
    55  servicing functions, including, but not limited to, functions related to
    56  lending or providing a grant  for  construction,  as  may  generally  be

        A. 6655--A                          4
 
     1  performed by an institutional lender. Such agency may act in such capac-
     2  ity  or appoint or consent to the appointment of a financial institution
     3  or other qualified entity, as determined by such agency, to act in  such
     4  capacity  on behalf of such agency. Such agency may pay a reasonable and
     5  customary fee to such financial institution or  other  qualified  entity
     6  appointed  by  such agency, or to whose appointment such agency provided
     7  consent, for the performance of such loan or grant servicing functions.
     8    § 5. Subdivision 41 of paragraph a  of  section  11.00  of  the  local
     9  finance  law,  as amended by chapter 400 of the laws of 1994, is amended
    10  to read as follows:
    11    41. Housing. The effectuating of any of the  purposes  of  the  public
    12  housing law, other than making loans to limited profit housing companies
    13  pursuant  to  article  two of the private housing finance law, and other
    14  than making loans to owners of existing multiple dwellings, fifty years;
    15  bonds issued by a housing authority pursuant to section forty-one of the
    16  public housing law and guaranteed by a municipality pursuant to  section
    17  ninety-five  of  the  public housing law, five years, in addition to the
    18  foregoing period of fifty  years,  for  the  temporary  financing  of  a
    19  project  prior  to the permanent financing thereof; evidences of indebt-
    20  edness issued to the state pursuant to paragraph c of section  20.00  of
    21  this  chapter, three years, in addition to the foregoing period of fifty
    22  years for the temporary financing of a project prior  to  the  permanent
    23  financing thereof; loans to limited profit housing companies pursuant to
    24  article  two of the private housing finance law, fifty-five years; loans
    25  or grants to owners of existing private or multiple dwellings, non-resi-
    26  dential property, or vacant land pursuant to the provisions  of  article
    27  eight,  article  eight-A,  article  eight-B,  article  eleven or article
    28  fifteen  of  the  private  housing  finance  law,  or  loans   for   the
    29  construction  of  multiple  dwellings  pursuant to article eleven of the
    30  private housing finance law, or loans or grants for the  pre-development
    31  costs or construction of private or multiple dwellings pursuant to arti-
    32  cle twenty-two of the private housing finance law, thirty years.
    33    § 6. Section 2 of the private housing finance law is amended by adding
    34  two new subdivisions 30 and 31 to read as follows:
    35    30. "Climate resiliency improvements." Improvements for the purpose of
    36  protecting  land or any structures thereon from damage resulting from or
    37  which may result from changes in climate, including, but not limited to,
    38  extreme weather events, abnormal temperatures, and sea level rise, or of
    39  reducing the impact of the  operation  of  such  structures  on  climate
    40  change,  including,  but not limited to, improvements that reduce energy
    41  consumption or promote the efficient use of natural resources.
    42    31. "Private lender." One or more banking organizations,  foundations,
    43  labor  unions,  credit unions, employers' associations, veterans' organ-
    44  izations, colleges, universities, educational institutions,  child  care
    45  institutions,  hospitals,  medical research institutes, insurance compa-
    46  nies, trustees or fiduciaries, trustees of pensions and retirement funds
    47  and systems, corporations, partnerships, individuals or  other  entities
    48  or  any combination of the foregoing, and shall include any public bene-
    49  fit corporation and the United States of America and any of its agencies
    50  and departments. As used in this definition, the  terms  "trustees"  and
    51  "fiduciaries"  shall  include any fiduciary or fiduciaries holding funds
    52  for investment and the term "banking organizations" shall have the  same
    53  meaning as in subdivision eleven of section two of the banking law.
    54    § 7. Section 400 of the private housing finance law is amended to read
    55  as follows:

        A. 6655--A                          5

     1    §  400.  Policy  and  purposes  of article. It is hereby declared that
     2  there exists in municipalities in  this  state  a  seriously  inadequate
     3  supply  of  safe  and  sanitary  dwelling accommodations for persons and
     4  families of low income; that such shortage constitutes an emergency  and
     5  a  grave  menace  to  the health, safety, morals, welfare and comfort of
     6  citizens of this state; that there exists in such municipalities a large
     7  number of multiple dwellings which are inadequate, unsafe or  insanitary
     8  by  reason  of  the absence of proper heating facilities or by reason of
     9  the necessity for elimination of conditions dangerous to human  life  or
    10  detrimental  to  health,  including  nuisances  as defined[,] in section
    11  three hundred nine of the multiple dwelling law, or for other  rehabili-
    12  tation or improvement and which can be made adequate, safe and sanitary,
    13  by  the  installation of proper heating facilities or by other rehabili-
    14  tation, preservation or improvement or by the elimination of such condi-
    15  tions; that such installation, rehabilitation, preservation or  improve-
    16  ment  cannot  readily  be  provided by the ordinary unaided operation of
    17  private enterprise for occupancy by persons or families  of  low  income
    18  without public aid in the form of low interest loans or grants to owners
    19  of  such  multiple dwellings for the purpose of such installation, reha-
    20  bilitation, preservation or improvement; that the installation of proper
    21  heating facilities in such multiple dwellings or  other  rehabilitation,
    22  preservation  or  improvement  thereof  for  occupancy by persons of low
    23  income as defined in this article is a public use and a  public  purpose
    24  for  which  public  money may be loaned or granted; that such conditions
    25  require the provisions hereinafter enacted; and  the  necessity  in  the
    26  public  interest  for  the  provisions  hereinafter  enacted  is  hereby
    27  declared as a matter of legislative determination.
    28    § 8. Subdivision 3 of section 401 of the private housing finance  law,
    29  paragraph  a as amended by chapter 44 of the laws of 1976, and paragraph
    30  b as amended by chapter 904 of the laws of 1962, is amended to  read  as
    31  follows:
    32    3. a. The term "persons or families of low income" shall mean "persons
    33  of  low income" or "families of low income" as defined in section two of
    34  this chapter[, whose probable aggregate annual income during the  period
    35  of  occupancy  does not exceed six times the rental (including the value
    36  or cost to them of heat, light, water  and  cooking  fuel)  of  dwelling
    37  units  occupied  by such persons or families in existing multiple dwell-
    38  ings aided by a loan pursuant to this article, except that in  the  case
    39  of  persons  or families with three or more dependents, such ratio shall
    40  not exceed seven to one, and except further that the income  limitations
    41  prescribed  by  this  paragraph  shall  be  subject to the provisions of
    42  subdivision two of section four hundred three of this article.
    43    In calculating annual income,  social  security  payments  and  income
    44  received from private pension funds by any person sixty-two years of age
    45  or  more  shall be excluded up to a total maximum amount of seventy-five
    46  dollars per month. The term "probable aggregate annual income" means the
    47  annual income of the chief wage earner of the  family,  plus  all  other
    48  income  of other members of the family over the age of twenty-one years,
    49  plus a proportion of income of gainfully employed members under the  age
    50  of  twenty-one years, the proportion to be determined by the agency. The
    51  agency may exclude a proportion of the income of other  members  of  the
    52  family  over  the age of twenty-one years for the purpose of determining
    53  eligibility for commencement of occupancy or continued occupancy, or for
    54  establishing rental of such family, or for all such purposes].
    55    b. Notwithstanding the provisions of paragraph a of this  subdivision,
    56  [and  subject  to  the  provisions  of subdivision three of section four

        A. 6655--A                          6

     1  hundred three of this article] the term  "persons  or  families  of  low
     2  income"  shall  also mean any person or family who, immediately prior to
     3  the date on which a contract for a loan  with  respect  to  an  existing
     4  multiple  dwelling  is  entered  into pursuant to the provisions of this
     5  article, occupies any dwelling unit in such multiple  dwelling  and  who
     6  continuously  occupies  such unit during and after completion of central
     7  heating or other rehabilitation or  improvement  performed  pursuant  to
     8  such  contract  provided, however, that any person or family required to
     9  remove from any such dwelling unit because of such  installation,  reha-
    10  bilitation  or  improvement  shall,  for the purpose of this section, be
    11  deemed to have continuously occupied such unit and shall have preference
    12  in re-entering such multiple dwelling upon completion of  the  aforesaid
    13  work.
    14    §  9. Subdivision 6 of section 401 of the private housing finance law,
    15  as added by chapter 505 of the laws of  1973,  is  amended  to  read  as
    16  follows:
    17    6.  The  term  "owner" shall mean a person having record or beneficial
    18  title in fee simple to real property or the lessee thereof under a lease
    19  having an unexpired term of at least thirty years.
    20    § 10. Subdivision 1 of section 402 of the private housing finance law,
    21  as amended by chapter 808 of the laws of 1971,  is  amended  and  a  new
    22  subdivision 1-a is added to read as follows:
    23    1.  Notwithstanding  the  provisions  of any general, special or local
    24  law, a municipality, by such officer or  agency  as  determined  by  its
    25  local legislative body, is hereby authorized:
    26    (a) to make or contract to make loans to the owners of existing multi-
    27  ple  dwellings within its territorial limits, subject to the limitations
    28  in subdivision two of this section, in such amounts as may  be  required
    29  for  the installation of proper heating facilities, the incorporation of
    30  climate resiliency improvements, or elimination of conditions  dangerous
    31  to  human  life or detrimental to health, including nuisances as defined
    32  in section three hundred nine of the multiple  dwelling  law,  or  other
    33  rehabilitation,  preservation or improvement of such multiple dwellings,
    34  and if such owner acquires the multiple dwelling  for  the  purposes  of
    35  such  rehabilitation,  preservation  or improvement or owns the multiple
    36  dwelling subject to an outstanding indebtedness, such loans may be  made
    37  exclusively  for  or may include such amounts as may be required for the
    38  cost of such acquisition or for  the  refinancing  of  such  outstanding
    39  indebtedness, and may make temporary loans or advances to such owners in
    40  anticipation of the permanent municipal loans for such purposes[.]; and
    41    (b) to make or contract to make grants to any owner described in para-
    42  graph (a) of this subdivision, on the same terms as permitted under such
    43  paragraph for a loan.
    44    1-a.  As used in this article, the term "loan" shall include any grant
    45  made by a municipality pursuant to this article, provided, however, that
    46  any  provision  of  this article concerning the repayment or forgiveness
    47  of, or security for, a loan shall not apply to any grant  made  pursuant
    48  to this article.
    49    §  11.  Subdivisions 2-a, 2-b, 2-c and 4 of section 402 of the private
    50  housing finance law, subdivision 2-a as added by chapter 213 of the laws
    51  of 1975, subdivision 2-b as amended by chapter 362 of the laws of  2000,
    52  and  subdivision  2-c as amended by chapter 101 of the laws of 1994, are
    53  amended to read as follows:
    54    2-a. [As used in this section the term "value" shall mean the "as  is"
    55  value  of  the  multiple dwelling and the land upon which it is situated
    56  prior  to  such  installation,  elimination,  other  rehabilitation   or

        A. 6655--A                          7

     1  improvement  referred  to  in  subdivision  one of this section plus the
     2  total of all costs of such installation, elimination, rehabilitation  or
     3  improvement  including,  but  not  limited  to,  the costs of any or all
     4  undertakings  necessary  for the planning, financing, tenant relocation,
     5  acquisition, construction, equipment and development in connection ther-
     6  ewith.
     7    2-b.] (a) Each permanent loan shall be secured by a bond and  mortgage
     8  or  note and mortgage upon the multiple dwelling and the land upon which
     9  it is situated, provided that where the multiple dwelling is held in the
    10  condominium form of ownership, such loan shall be secured by a bond  and
    11  mortgage  or  note and mortgage upon the condominium units rehabilitated
    12  or improved with such loan; where the loan is made to an owner who is  a
    13  lessee,  such loan shall be secured by [a first lien on such property] a
    14  leasehold interest in such property.
    15    (b) [The amount of any such loan shall not  exceed  the  cost  of  the
    16  installation  of proper heating facilities, or elimination of conditions
    17  dangerous to human life or detrimental to health, including nuisances as
    18  defined in section three hundred nine of the multiple dwelling  law,  or
    19  other  rehabilitation  or  improvement  provided that, if any portion of
    20  such loan is used for the cost of acquisition of the land and the multi-
    21  ple dwelling or for re-financing, the total amount of  such  loan  shall
    22  not  exceed two times the cost of such installation, elimination of such
    23  conditions, rehabilitation or improvement.
    24    (c) The amount of any such loan, together with the amount of all prior
    25  liens and encumbrances, shall not exceed, except in the case of  a  loan
    26  made to a non-profit company, a mutual company, or a housing development
    27  fund  company,  ninety  per  centum  of the value of the property, after
    28  completion of the installation of proper heating facilities,  or  elimi-
    29  nation  of  such  conditions  or other rehabilitation or improvement, as
    30  estimated by the agency, unless the agency makes a written determination
    31  that the owner has insufficient resources to pay for the  remaining  ten
    32  per  centum  of  the  value  of  the  property, after completion of such
    33  installation, elimination, or other rehabilitation  or  improvement,  as
    34  estimated  by the agency, in which case such loan shall not exceed nine-
    35  ty-five per centum of the value of the property, after completion of the
    36  installation of proper heating facilities, or elimination of such condi-
    37  tions or other rehabilitation or improvement, as estimated by the  agen-
    38  cy.  The  amount of any such loan, together with the amount of all prior
    39  liens and encumbrances, made to a non-profit company, a mutual  company,
    40  or  a housing development fund company shall not exceed the value of the
    41  property after completion of such installation,  elimination,  or  other
    42  rehabilitation  or improvement, as estimated by the agency provided that
    43  when after completion of such installation, elimination or  other  reha-
    44  bilitation  or improvement, such project is, or is to be operated exclu-
    45  sively for the benefit of persons or families who are entitled to  occu-
    46  pancy by reason of ownership of stock in the corporate owners, such loan
    47  shall  not  exceed  ninety-eight percentum of the value of the property,
    48  after completion of such installation, elimination, or  other  rehabili-
    49  tation  or  improvement,  as  estimated by the agency, unless the agency
    50  makes a written determination that the owner has insufficient  resources
    51  to  pay  for  the remaining two per centum of the value of the property,
    52  after completion of such installation, elimination, or  other  rehabili-
    53  tation  or  improvement,  as estimated by the agency, in which case such
    54  loan shall not exceed the value of the  property,  after  completion  of
    55  such  installation, elimination, or other rehabilitation or improvement,
    56  as estimated by the agency.

        A. 6655--A                          8

     1    (d)] Each such bond and mortgage or note and mortgage shall be  repaid
     2  over  or  within  a  period  of [thirty] forty years, provided that such
     3  period may be extended as the agency may determine necessary  to  ensure
     4  the continued affordability or economic viability of the multiple dwell-
     5  ing, in such manner as may be provided in such bond and mortgage or note
     6  and mortgage and contract [but in no case to exceed the probable life of
     7  the  multiple  dwelling  which is hereby determined to be thirty years].
     8  Such bond and  mortgage  or  note  and  mortgage  and  the  contract  in
     9  connection  with  such  permanent  and  temporary loans may contain such
    10  other terms and provisions not inconsistent with the provisions of  this
    11  article  as  the local legislative body or the agency may deem necessary
    12  or desirable to secure repayment of the loan, the interest  thereon  and
    13  other  charges in connection therewith and to carry out the purposes and
    14  provisions of this article[; notwithstanding the foregoing, a loan  made
    15  prior  to  January  first,  nineteen  hundred  seventy-eight may, in the
    16  discretion of the agency, be extended to a term up to forty-five  years.
    17  The  agency  may  modify the rate and time of payment of interest on the
    18  original loan and the rate and time of amortization of principal in such
    19  manner as required to secure payment of the  loan  within  the  extended
    20  term], including, but not limited to, providing that the lien created by
    21  such  bond  and  mortgage  or note and mortgage, and, if applicable, any
    22  regulatory agreement executed by the owner and the agency or restrictive
    23  covenant approved by such agency, may be recorded in an equal or  subor-
    24  dinate  position,  or  subsequently made equal or subordinate, to a lien
    25  recorded by any private lender against such multiple dwelling.
    26    [2-c.] 2-b. If a loan pursuant to this article is made to a non-profit
    27  company or a housing development fund company which  agrees  to  provide
    28  housing  accommodations  exclusively  for  persons  and  families of low
    29  income, at least thirty percent of whom are referred to it by the  muni-
    30  cipality  and  have  prior  to  their initial occupancy in such accommo-
    31  dations resided in emergency shelter facilities operated by or on behalf
    32  of the municipality, the agency may provide that the note  and  mortgage
    33  shall  automatically  be reduced to zero in five equal annual decrements
    34  commencing on the tenth year after the initial occupancy date,  provided
    35  that  such  accommodations  have  been  owned  and  operated in a manner
    36  consistent with an agreement with the  municipality  contained  in  such
    37  note and mortgage to provide housing for such persons.
    38    4.  The  agency  may [charge the] require the payment of charges by an
    39  owner of such multiple dwelling [reasonable fees] in  consideration  for
    40  the financing, regulation, supervision and audit of such loan. Such fees
    41  shall be [kept by the municipality in a separate fund to be known as the
    42  housing rehabilitation fund and shall be used to pay for the expenses of
    43  the  municipality  in  administering  and carrying out the provisions of
    44  this article] paid into the treasury of the municipality  requiring  the
    45  charges  and shall be paid and deposited in the general fund of any such
    46  municipality.
    47    § 12. Subdivisions 2, 3, 4 and 5 of section 403 of the private housing
    48  finance law, subdivision 2, paragraphs a, b and c of subdivision  3  and
    49  subdivision 4 as amended by chapter 904 of the laws of 1962, are amended
    50  to read as follows:
    51    2.  [In  the event that after any person or family included within the
    52  provisions of paragraph a of subdivision three of section  four  hundred
    53  one of this article, but not included within the provisions of paragraph
    54  b  of  such  subdivision three, begins occupancy of any dwelling unit in
    55  any multiple dwelling aided by a loan  pursuant  to  this  article,  and
    56  during  the period while such dwelling unit is subject to a maximum rent

        A. 6655--A                          9

     1  prescribed pursuant to this article, the income of such person or family
     2  increases so as to exceed the  applicable  maximum  prescribed  by  such
     3  paragraph  a by more than fifty per centum, such person shall be subject
     4  to removal from such dwelling with the approval of the agency.
     5    3.  a. In the event that on the date on which a contract for a loan is
     6  made with respect to a multiple dwelling aided by  a  loan  pursuant  to
     7  this  article,  any  person  or family occupying a dwelling unit in such
     8  multiple dwelling and included within the provisions of paragraph  b  of
     9  subdivision  three  of  section  four hundred one of this article, has a
    10  probable aggregate annual income, as determined in accordance  with  the
    11  provisions  of  paragraph a of such subdivision three, which exceeds the
    12  income limits specified in such paragraph a by more than fifty per cent,
    13  such person or family shall be subject to  removal  from  such  dwelling
    14  unit  with the approval of the agency upon the expiration of a period of
    15  two years after the date on which such contract is entered into.
    16    b. In the event that at any time within a period of  two  years  after
    17  any  such  contract  is  entered  into, the income of any such person or
    18  family increases so as to exceed the income  limits  specified  in  such
    19  paragraph  a by more than fifty per cent, such person or family shall be
    20  subject to removal from such dwelling unit  with  the  approval  of  the
    21  agency upon the expiration of such period of two years.
    22    c.  If,  at  any  time subsequent to the expiration of a period of two
    23  years after any such contract is entered into,  and  during  the  period
    24  while the dwelling unit occupied by any such person or family is subject
    25  to  a  maximum  rent  prescribed pursuant to this article, the income of
    26  such person or family increases so as to exceed the income limits speci-
    27  fied in such paragraph a by more than fifty per  cent,  such  person  or
    28  family  shall  be  subject  to  removal from such dwelling unit with the
    29  approval of the agency.
    30    4.] Any person or family in occupancy[, whether  included  within  the
    31  provisions of paragraph a or paragraph b of subdivision three of section
    32  four  hundred  one  of  this  article,  whose income exceeds the maximum
    33  prescribed by the provisions of such paragraph a  with  respect  to  the
    34  time of beginning of occupancy, shall] whose income precludes the inclu-
    35  sion  of  such  person or family within the definition provided in para-
    36  graph a of subdivision three of section four hundred one of this article
    37  may be required to pay a rental surcharge in accordance with a  schedule
    38  of  surcharges  to be promulgated by the agency.  In determining imposi-
    39  tion of any such surcharge, the agency shall consider  factors  such  as
    40  the net operating income and debt service coverage ratio of the property
    41  aided  by  a  loan pursuant to this article. Rental surcharges collected
    42  pursuant to this section shall be paid by the owner to the  municipality
    43  which  has granted such owner tax exemption or tax abatement pursuant to
    44  any law authorizing the granting of same, as reimbursement to such muni-
    45  cipality therefor. In the event that such tax exemption and  tax  abate-
    46  ment  have  not  been  granted,  or in the event that a sum equal to the
    47  total amount of tax exemption and tax abatement granted to the owner has
    48  been paid to the municipality, the excess, if any, of  surcharges  shall
    49  be paid to the municipality in reduction of the loan.
    50    [5. Any person or family whose removal is required by any provision of
    51  this article shall be subject to removal by summary proceedings.]
    52    §  13.  The  opening  paragraph of subdivision 1 of section 404 of the
    53  private housing finance law, as added by chapter  904  of  the  laws  of
    54  1962, is amended to read as follows:
    55    No  such loan shall be made by a municipality to an owner of an exist-
    56  ing multiple dwelling unless the owner of such  multiple  dwelling  [and

        A. 6655--A                         10

     1  all  persons  holding  a  lien  prior to that of the municipality] shall
     2  covenant in writing that so long  as  any  part  of  such  loan  remains
     3  unpaid,  any  exemption  and  abatement  from  taxation  on the property
     4  resulting  from the installations, alterations or improvements made with
     5  such loan remains in effect or for a period of at least ten  years  from
     6  the occupancy date, whichever is the later:
     7    §  14.  Section  450 of the private housing finance law, as amended by
     8  chapter 273 of the laws of 1975, is amended to read as follows:
     9    § 450. Policy and purposes of article.   It is  hereby  declared  that
    10  there  exists  in  municipalities  in  this state a seriously inadequate
    11  supply of safe and sanitary dwelling accommodations; that such  shortage
    12  constitutes  an  emergency  and  a  grave  menace to the health, safety,
    13  morals, welfare and comfort of citizens of  this  state;  that  existing
    14  conditions  of deterioration of housing marked by noncompliance with the
    15  multiple dwelling law or local housing codes threaten a further decrease
    16  in such supply; that rehabilitation  and  improvement  of  dwellings  to
    17  prolong  the  useful  life  of such dwellings may be necessary to arrest
    18  such conditions of deterioration; that the elimination  of  such  condi-
    19  tions  by rehabilitation or other improvement cannot readily be provided
    20  by the ordinary unaided operation of private enterprise  without  public
    21  aid in the form of low interest loans or grants to owners of such multi-
    22  ple  dwellings;  that  such  rehabilitation or other improvement of such
    23  dwellings to bring them into conformance with the multiple dwelling  law
    24  and  local  housing  codes  is a public use, a public purpose and a city
    25  purpose for which public money may be loaned or  granted  by  a  munici-
    26  pality  and  for which indebtedness may be contracted by a municipality;
    27  that such conditions require the provisions hereinafter enacted, and the
    28  necessity in the public interest for the provisions hereinafter  enacted
    29  is hereby declared as a matter of legislative determination.
    30    §  15.  Subdivisions  2  and  3  of section 451 of the private housing
    31  finance law, subdivision 2 as amended by chapter 705 of the laws of 1976
    32  and subdivision 3 as amended by chapter 269 of the  laws  of  1985,  are
    33  amended to read as follows:
    34    2.  "Occupancy by persons of low income." Occupancy by [persons paying
    35  rentals or carrying charges not in excess  of  the  average  rentals  or
    36  carrying  charges  prevailing  in  local  projects  of municipally-aided
    37  limited-profit housing companies aided under article two of  this  chap-
    38  ter,  the occupancy of which commenced on or after May eighteenth, nine-
    39  teen hundred seventy] "persons  of  low  income"  or  "families  of  low
    40  income," as such terms are defined in section two of this chapter.
    41    3.  "Owner."  An individual, partnership, corporation or other entity,
    42  including a non-profit company, a mutual company, or a housing  develop-
    43  ment  fund company, which holds record or beneficial title in fee simple
    44  to the multiple dwelling and the real property upon which it is  situate
    45  or the lessee thereof under a lease the unexpired term of which shall be
    46  not less than the term of the loan to be made under this article.
    47    § 16. Subdivision 1 of section 452 of the private housing finance law,
    48  as  amended  by  chapter  923  of the laws of 1983, is amended and a new
    49  subdivision 1-a is added to read as follows:
    50    1. Notwithstanding the provisions of any  general,  special  or  local
    51  law, a municipality is hereby authorized:
    52    (a) to make or contract to make loans to the owners of existing multi-
    53  ple  dwellings within its territorial limits, subject to the limitations
    54  in subdivision two of this section, for the elimination of any substand-
    55  ard or insanitary condition or conditions in violation of  the  multiple
    56  dwelling  law  or  local  housing code, for the incorporation of climate

        A. 6655--A                         11
 
     1  resiliency improvements or for such replacement  and  rehabilitation  of
     2  the  heating, plumbing, electrical and related systems or other improve-
     3  ments as shall be reasonably necessary to prolong  the  useful  life  of
     4  such  dwellings,  and  may make temporary loans to such owners in antic-
     5  ipation of the permanent municipal loans for such purposes; and
     6    (b)  to make or contract to make grants  to  any  owner  described  in
     7  paragraph  (a) of this subdivision, on the same terms as permitted under
     8  such paragraph for a loan.
     9    1-a.  As used in this article, the term "loan" shall include any grant
    10  made by a municipality pursuant to this article, provided, however, that
    11  provisions of this article concerning the repayment or  forgiveness  of,
    12  or  security  for,  a loan shall not apply to any grant made pursuant to
    13  this article.
    14    § 17. Subdivisions 2 and 5 of  section  452  of  the  private  housing
    15  finance law, subdivision 2 as amended by chapter 408 of the laws of 2009
    16  and  subdivision  5  as  amended by chapter 273 of the laws of 1975, are
    17  amended to read as follows:
    18    2. Each loan shall be evidenced by a note executed by the owner of the
    19  existing multiple dwelling. The supervising agency in its discretion may
    20  require one or more of the shareholders of a corporate owner to  co-sign
    21  such note or to otherwise guarantee or pledge security for the repayment
    22  of  the  loan.  [The amount of any such loan shall not exceed the sum of
    23  thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of
    24  eliminating such substandard or insanitary condition or  conditions,  or
    25  effecting  such  rehabilitation or improvement, whichever is less.] Each
    26  such note shall be repaid within a period [of the probable life  of  the
    27  existing  multiple  dwelling  which  is  hereby  determined to be thirty
    28  years, or such shorter period as the supervising agency shall determine]
    29  of forty years, provided that such period may be extended as the  super-
    30  vising  agency  may determine necessary to ensure the continued afforda-
    31  bility or economic viability of the existing  multiple  dwelling.    The
    32  repayment  shall  be made in such manner as may be provided in such note
    33  and contract, if any, in connection with such  loan  and  may  authorize
    34  such  owner,  with  the consent of the supervising agency, to prepay the
    35  principal of the loan subject to such terms and  conditions  as  therein
    36  provided.  Such  note  and  contract  may  contain  such other terms and
    37  provisions not inconsistent with the provisions of this article  as  the
    38  local  legislative  body  or  supervising  agency  may deem necessary or
    39  desirable to secure repayment of the  loan,  the  interest  thereon  and
    40  other  charges in connection therewith and to carry out the purposes and
    41  provisions of this article, including  but  not  limited  to  provisions
    42  ensuring availability of rents for such repayment and provisions permit-
    43  ting  the  lien created by such note and mortgage, and, if applicable, a
    44  regulatory agreement executed by such owner and supervising  agency,  be
    45  recorded  in  an  equal  and  subordinate position, or subsequently made
    46  equal or subordinate, to a lien recorded by any private  lender  against
    47  such multiple dwelling.
    48    5.  The supervising agency may [charge] require the payment of charges
    49  by the owner of such existing multiple  dwelling  [reasonable  fees]  in
    50  consideration  for  the  financing, regulation, supervision and audit of
    51  such loan.  Such [fees] charges shall be [kept by the municipality in  a
    52  separate  fund  to be known as the article VIII-A housing rehabilitation
    53  fund and shall be used to help meet the expenses of the municipality  in
    54  administering and carrying out the provisions of this article] paid into
    55  the treasury of the municipality requiring the charges and shall be paid
    56  and deposited in the general fund of any such municipality.

        A. 6655--A                         12
 
     1    §  18.  Section  453  of  the private housing finance law, as added by
     2  chapter 924 of the laws of 1970, paragraphs (c) and (d) as  amended  and
     3  paragraph  (e)  of  subdivision 1 as added by chapter 273 of the laws of
     4  1975, is amended to read as follows:
     5    §  453.  Conditions precedent to making such loans.  [1.] No such loan
     6  shall be made by a municipality to an  owner  of  an  existing  multiple
     7  dwelling  unless  the  owner of such multiple dwelling shall covenant in
     8  writing that so long as any part of such loan shall remain  unpaid    or
     9  for  a period of at least ten years from the date of the loan, whichever
    10  is later:
    11    [(a)] 1. Each dwelling unit in such multiple dwelling shall be  avail-
    12  able solely for occupancy by persons of low income;
    13    [(b)] 2. No person who lives in such multiple dwelling at the time the
    14  loan  is made shall be required to move because of the rehabilitation or
    15  improvement financed thereby, except that a temporary relocation may  be
    16  required in connection with such rehabilitation or improvement;
    17    [(c)] 3. All persons operating or managing such multiple dwelling will
    18  permit  the duly authorized officers, employees, agents or inspectors of
    19  the municipality to enter in or upon and inspect such multiple  dwelling
    20  at all reasonable hours; [and
    21    (d)]  4.  The  municipality by such duly authorized representatives as
    22  aforesaid shall have full power to investigate into and order the  owner
    23  of  such multiple dwelling to furnish such reports and information as it
    24  may require concerning such rehabilitation or improvement and shall have
    25  full power to audit the  books  of  said  owner  with  respect  to  such
    26  matters; and
    27    [(e)]  5.  The  owner will submit to the supervising agency annually a
    28  statement of the income and expenses of such multiple dwelling, in  such
    29  form as shall be approved by such agency.
    30    [2.  No  such  loan  shall be made by a municipality unless such owner
    31  executed an affidavit that he was unable to obtain  financing  for  such
    32  rehabilitation  or  improvement  because of the neighborhood, the age of
    33  the building, or other factors indicating an inability  of  the  private
    34  sector unaided to cause such rehabilitation or improvement to be made.]
    35    §  19.  The  article  heading  of  article  8-B of the private housing
    36  finance law, as added by chapter 786 of the laws of 1987, is amended  to
    37  read as follows:
    38             LOANS TO [OWNER-OCCUPANTS] OWNERS OF ONE TO FOUR UNIT
    39                       PRIVATE AND MULTIPLE DWELLINGS
    40    §  20.  Section  470 of the private housing finance law, as amended by
    41  chapter 200 of the laws of 1997, is amended to read as follows:
    42    § 470. Policy and purposes of article. It is hereby declared and found
    43  that there exists in municipalities within  the  state  substandard  and
    44  unsanitary  areas and neighborhoods containing deteriorated [owner-occu-
    45  pied] one to four unit private and  multiple  dwellings,  and  that  the
    46  rehabilitation  or  preservation of such dwellings is necessary in order
    47  to aid in the prevention and elimination of slums  and  blight  in  such
    48  areas and  neighborhoods.
    49    It  further  is found that there exists in such municipalities a seri-
    50  ously inadequate supply of safe and  sanitary  [owner-occupied]  one  to
    51  four  unit  private  and multiple dwellings, particularly for persons of
    52  low and moderate income, that existing non-compliance with local housing
    53  codes and with the multiple dwelling law and the multiple residence  law
    54  threatens  to decrease such supply, and that the rehabilitation, preser-
    55  vation and improvement of such dwellings is  necessary  to  arrest  such
    56  conditions of deterioration.

        A. 6655--A                         13
 
     1    It  further  is found that the elimination of such conditions by reha-
     2  bilitation or other improvements in one to four unit private and  multi-
     3  ple  dwellings cannot be readily provided without public aid in the form
     4  of low interest loans or grants to [low and moderate income  owner-occu-
     5  pants] owners of such one to four unit dwellings.
     6    The  rehabilitation,  preservation or other [improvements] improvement
     7  of such private and multiple dwellings [owned and occupied  by  low  and
     8  moderate  income  persons  or  families,]  is  hereby  declared a public
     9  purpose and a municipal purpose for which public monies may be loaned or
    10  granted.
    11    In order, further, to promote the preservation and  rehabilitation  of
    12  such  dwellings, it is hereby declared that additional provisions should
    13  be made to provide public monies for interest  reduction  subsidies  for
    14  private loans made by private investors for such rehabilitation.
    15    The  necessity in the public interest for the provisions of this arti-
    16  cle is hereby declared as a matter of legislative determination.
    17    § 21. Subdivisions 8 and 9 of  section  471  of  the  private  housing
    18  finance  law, as amended by chapter 200 of the laws of 1997, are amended
    19  to read as follows:
    20    8. "Owner" shall mean an individual  or  individuals,  a  partnership,
    21  [or]  a  corporation  or  other  entity, including but not limited to, a
    22  trust, a joint tenancy, tenancy in common or  tenancy  by  the  entirety
    23  holding  record or beneficial title in fee simple to an existing private
    24  or multiple dwelling and the real property upon which it is situated, or
    25  the lessee thereof under a lease having an unexpired term  of  at  least
    26  thirty  years.  "Owner"  shall  be  deemed to also include a cooperative
    27  corporation or a condominium association.
    28    9. ["Owner-occupant" shall mean an owner who occupies at least one  of
    29  the  units  in a one to four unit dwelling as his or her principal resi-
    30  dence. In the case of a partnership, joint tenancy, tenancy in common or
    31  tenancy  by the entirety, at least one partner  or  tenant  must  be  an
    32  owner-occupant.  In  the case of a cooperative or condominium a majority
    33  of the units must be owner-occupied.  The  term  "owner-occupant"  shall
    34  include  an owner of a vacant one to four unit dwelling who demonstrates
    35  an intention to move into one of the units after the  rehabilitation  of
    36  the property] Reserved.
    37    §  22.    Section  472 of the private housing finance law, as added by
    38  chapter 786 of the laws of 1987, subdivision 1 as amended by chapter 479
    39  of the laws of 2005, subdivision 2 as amended by chapter 408 of the laws
    40  of 2009, subdivision 3 as amended by chapter 84 of the laws of 2001, and
    41  subdivision 7 as added by chapter 705 of the laws of 1991, is amended to
    42  read as follows:
    43    § 472. Loans to [owner-occupants]  owners.  1.    Notwithstanding  the
    44  provisions  of any general, special or local law, a municipality, acting
    45  through an agency, is authorized:
    46    (a) to make, or contract to make, loans to [low  and  moderate  income
    47  owner-occupants] owners of one to four unit existing private or multiple
    48  dwellings  within  its  territorial limits, subject to the limitation of
    49  subdivisions two through seven of this section, in such amounts as shall
    50  be required for the rehabilitation, improvement or acquisition  of  such
    51  dwellings[,]  provided, [however, that such loans shall not exceed sixty
    52  thousand dollars per dwelling unit. Such] that any  such  rehabilitation
    53  or  improvement  may include climate resiliency improvements. Such loans
    54  may also be made exclusively for  or  include  the  refinancing  of  the
    55  outstanding  indebtedness  of  such  dwellings, and the municipality may

        A. 6655--A                         14
 
     1  make temporary loans or advances to  such  [owner-occupants]  owners  in
     2  anticipation of permanent loans for such purposes; and
     3    (b) to make or contract to make grants to any owner described in para-
     4  graph (a) of this subdivision, on the same terms as permitted under such
     5  paragraph for a loan.
     6    1-a.  As used in this article, the term "loan" shall include any grant
     7  made by a municipality pursuant to this article, provided, however, that
     8  provisions  of  this article concerning the repayment or forgiveness of,
     9  or security for, a loan shall not apply to any grant  made  pursuant  to
    10  this article.
    11    2. Each loan shall be evidenced by a note executed by the [owner-occu-
    12  pant]  owner of the existing dwelling. Repayment of each such note shall
    13  be within a period of [the probable life of the existing dwelling  which
    14  is  hereby  determined to be thirty years, or such shorter period as the
    15  agency shall determine] forty years, provided that such  period  may  be
    16  extended  as  the agency may determine necessary to ensure the continued
    17  affordability or economic viability  of  the  existing  dwelling.    The
    18  repayment  shall  be made in such manner as may be provided in such note
    19  and contract, if any, in connection with such loan,  and  may  authorize
    20  such  [owner-occupant]  owner, with the consent of the agency, to prepay
    21  the principal of the loan subject to such terms and conditions as there-
    22  in provided. In order to make any such loan affordable to the [owner-oc-
    23  cupant] owner, the agency may provide in such note and contract that all
    24  of the outstanding principal of said loan may be self-liquidated over  a
    25  [fifteen  year]  period of [owner-occupancy] not less than fifteen years
    26  of continuous compliance by the owner with  a  regulatory  agreement  or
    27  other  restrictive  covenant with or approved by the agency and upon the
    28  satisfaction of any additional conditions specified therein.  Such  note
    29  and  contract may contain such other terms and provisions not inconsist-
    30  ent with the provisions of this article as the agency may deem necessary
    31  or desirable to secure repayment of the loan, the interest  thereon,  if
    32  any,  and  other  charges  in connection therewith, and to carry out the
    33  purposes and provisions of this article, including, but not limited  to,
    34  providing that the lien created by the note and mortgage, and, if appli-
    35  cable,  any  regulatory  agreement executed by such owner and agency, or
    36  restrictive covenant approved by such agency,  may  be  recorded  in  an
    37  equal  or  subordinate  position, or subsequently made equal or subordi-
    38  nate, to a lien recorded by any private  lender  against  such  existing
    39  dwelling.
    40    3.  The agency in its discretion may require that the [owner-occupant]
    41  owner execute, acknowledge and deliver a uniform commercial code financ-
    42  ing statement for the real property improvement to be in  such  form  as
    43  the  agency  shall  specify  and  in accordance with the requirements of
    44  section 9--502 of the uniform commercial code of the state of New  York.
    45  Said  financing  statement  shall be filed or recorded without charge in
    46  accordance with the provisions of paragraph one  of  subsection  (a)  of
    47  section 9--501 of the uniform commercial code, and from the date of such
    48  filing  the  municipality  shall  have a lien against said real property
    49  improvement for the amount advanced or so much thereof as remains unpaid
    50  together with the interest thereon. Upon payment of all sums advanced by
    51  the municipality and interest thereon,  and  upon  demand  of  the  then
    52  record  owner  of  the real property, the agency shall deliver a copy of
    53  the financing statement with an endorsement thereon  that  the  lien  is
    54  satisfied.  Upon  filing  of such copy in the office where the financing
    55  statement was filed and upon payment of the  proper  fee  therefor,  the
    56  lien of such financing statement shall be discharged.

        A. 6655--A                         15
 
     1    4.  The  agency  may  require  the [owner-occupant] owner to execute a
     2  mortgage as security for a loan in lieu of or in addition to a financing
     3  statement as provided in subdivision three of this section.  Such  mort-
     4  gage  shall  contain such terms and provisions not inconsistent with the
     5  provisions of this article as the agency shall deem necessary or desira-
     6  ble to secure repayment of the loan.
     7    5.  Loans  may  be  made with respect to a one to four unit private or
     8  multiple dwelling encumbered by mortgages, provided no  mortgage  is  in
     9  default,  except if such default shall be remedied by the proposed reha-
    10  bilitation or improvement.
    11    6. The agency may [charge] require  the  [owner-occupant]  payment  of
    12  charges  by  the  owner  of  such  existing private or multiple dwelling
    13  [reasonable fees] in consideration for [administration,] the  financing,
    14  regulation,  supervision and audit  of such loan.  Such charges shall be
    15  paid into the treasury of the municipality  requiring  the  charges  and
    16  shall  be  paid  and  deposited  in the general fund of any such munici-
    17  pality.
    18    7. In making a loan under this article, an agency shall have the power
    19  to participate in a loan made by any private  investor[,  provided  that
    20  the  portion of the loan funded by the agency shall not exceed an amount
    21  equal to seventy-five percent of the total loan.] The agency  may  enter
    22  into  an  agreement  with  a private investor to deposit funds with such
    23  private investor  to  cover  the  agency's  participation  in  loans  to
    24  [owner-occupants] owners of one to four unit existing private and multi-
    25  ple  dwellings  with  such  funds  advanced  by such private investor to
    26  [owner-occupants] owners of existing dwellings. The portion of the  loan
    27  funded  by  the  agency  may  be  equal to or subordinate in lien to the
    28  portion of the loan funded by the private  investor  and  the  note  and
    29  contract  may  contain such terms with respect to interest rate, if any,
    30  and time of payment of principal and interest as determined by the agen-
    31  cy. The agency may make provision, either in the mortgage  or  mortgages
    32  or by separate agreement, for the performance by the private investor of
    33  such  services as are generally performed by a banking institution which
    34  itself holds a mortgage,  including,  without  limitation,  construction
    35  loan  advances,  construction  supervision,  initiation  of  foreclosure
    36  proceedings,  procurement  of  insurance,  and  all  other  matters   in
    37  connection  with the financing, supervision, regulation and audit of any
    38  such loan. In order to make the loan affordable to the  [owner-occupant]
    39  owner,  the agency may provide an interest reduction subsidy pursuant to
    40  section four hundred seventy-five of this article, or may  provide  that
    41  all  or part of the agency's portion of the outstanding principal of any
    42  such participation loan may be self-liquidated  over  a  [fifteen  year]
    43  period  of  [owner-occupancy]  not less than fifteen years of continuous
    44  compliance by the owner with a regulatory agreement or other restrictive
    45  covenant with or approved by the agency and upon the satisfaction of any
    46  additional conditions specified therein.
    47    § 23. Subdivisions 1 and 2 of  section  473  of  the  private  housing
    48  finance law, as added by chapter 786 of the laws of 1987, are amended to
    49  read as follows:
    50    1.  No  such  loan  shall  be  made to an [owner-occupant] owner of an
    51  existing private or multiple dwelling unless the [owner-occupant]  owner
    52  of  such  private or multiple dwelling shall covenant in writing that so
    53  long as any part of such loan shall remain  unpaid  or  any  requirement
    54  imposed  as a condition for making such loan that survives the repayment
    55  of such loan, including, but not limited to, in a  regulatory  agreement
    56  executed by such owner and the agency or a restrictive covenant approved

        A. 6655--A                         16
 
     1  by  such  agency,  remains  in effect: (i) the [owner-occupant] owner or
     2  managing agent or operator  of  such  dwelling  shall  permit  the  duly
     3  authorized  officers,  employees,  agents or inspectors of the agency to
     4  enter  in  or  upon and inspect such private or multiple dwelling at all
     5  reasonable hours; (ii) the agency  by  such  duly  authorized  represen-
     6  tatives as aforesaid shall have full power to investigate into and order
     7  the  [owner-occupant] owner of such dwelling to furnish such reports and
     8  information as it may require concerning such rehabilitation or improve-
     9  ment and shall have full power to audit the books  of  said  owner  with
    10  respect  to  such matters; and (iii) if the property to be rehabilitated
    11  is a multiple dwelling, the [owner-occupant] owner will  submit  to  the
    12  agency  annually a statement of income and expenses of such dwelling, in
    13  such form as shall be approved by the agency.
    14    2. A municipality shall neither make nor participate in a loan  to  an
    15  [owner-occupant]  owner  of  an  existing  private  or multiple dwelling
    16  pursuant to this article unless the agency finds that (i)  the  area  in
    17  which  such  dwelling is situated is a blighted, deteriorated or deteri-
    18  orating area or has a blighting influence on the surrounding area, or is
    19  in danger of becoming a slum or a blighted area because of the existence
    20  of substandard, unsanitary, deteriorating or deteriorated conditions, an
    21  aged housing stock, or other factors  indicating  an  inability  of  the
    22  private  sector  to  cause  such  rehabilitation to be made; or (ii) the
    23  owner of such private or multiple dwelling is a person or family of  low
    24  income.
    25    § 24. Subdivision 2 of section 474 of the private housing finance law,
    26  as  added  by  chapter  786  of  the laws of 1987, is amended to read as
    27  follows:
    28    2. The agency is authorized to make provision in  the  note  and  loan
    29  agreement  or by separate agreement for the servicing of such loans by a
    30  loan servicing company or other qualified entity, as determined  by  the
    31  agency,  and  such  services  may  include,  but  not be limited to, the
    32  collection of the debt services on such  loans  and  the  establishment,
    33  administration, and distribution of an escrow account for the payment of
    34  the  [owner-occupant's] owner's real estate taxes, sewer and water rents
    35  and fire insurance.
    36    § 25. Section 475 of the private housing  finance  law,  as  added  by
    37  chapter 786 of the laws of 1987, is amended to read as follows:
    38    § 475. Interest reduction subsidies. Notwithstanding the provisions of
    39  any  general,  special  or  local law, a municipality, acting through an
    40  agency, is authorized to  provide,  or  contract  to  provide,  interest
    41  reduction  subsidies  for  loans  made  by private investors to [low and
    42  moderate income owner-occupants] owners of one  to  four  unit  existing
    43  private  or  multiple  dwellings  within its territorial limits, if such
    44  [owner-occupants] owners would have been eligible under  the  provisions
    45  of  this  article  for  a loan made by the municipality pursuant to this
    46  article.
    47    § 26. Subdivision 1 of section 576-c of the  private  housing  finance
    48  law,  as  amended  by  section  1 of chapter 254 of the laws of 1998, is
    49  amended to read as follows:
    50    1. In addition to the powers granted  to  municipalities  pursuant  to
    51  this article, a municipality, acting by its supervising agency, may make
    52  loans for the purposes of acquisition, rehabilitation or construction of
    53  dwelling  accommodations to a non-profit housing development fund compa-
    54  ny, a  wholly-owned  subsidiary  of  such  company,  a  partnership  the
    55  controlling  interest  of  which  is  held by such company and which has
    56  agreed to limit profits or rate of return  of  investors  in  accordance

        A. 6655--A                         17
 
     1  with  a  formula  established  or  approved by the company, or a private
     2  developer which has agreed to limit profits or rate of return of  inves-
     3  tors  in accordance with a formula established or approved by the compa-
     4  ny,  which  agrees  to  provide  housing  accommodations exclusively for
     5  persons and families of low income, at least thirty percent of whom  are
     6  referred  to  it by a municipality and have prior to their initial occu-
     7  pancy in such accommodations resided  in  emergency  shelter  facilities
     8  operated  by  or  on  behalf of the municipality or who are otherwise in
     9  need of emergency shelter as determined by the municipality,  providing,
    10  however,  that  in  the  case  of a building acquired by such a company,
    11  subsidiary, partnership, or developer the obligation to provide  housing
    12  accommodations  for  such  persons  shall be applicable only to dwelling
    13  accommodations which are or become vacant after the date of acquisition.
    14  Such loans may be made for such period of  time  and  pursuant  to  such
    15  terms  and conditions as may be required by the municipality, including,
    16  but not limited to, terms and conditions providing that the lien created
    17  by the note and mortgage, and, if applicable, any  regulatory  agreement
    18  executed  by  the  owner  and  such municipality or restrictive covenant
    19  approved by a supervising agency, may be recorded in an equal or  subor-
    20  dinate  position,  or  subsequently made equal or subordinate, to a lien
    21  recorded by any private lender against the dwelling aided  by  the  loan
    22  made  pursuant to this article, and the supervising agency of such muni-
    23  cipality may provide that the amount of  the  note  and  mortgage  shall
    24  automatically  be reduced to zero in five equal decrements commencing on
    25  the tenth year after the initial occupancy date, provided  that,  as  of
    26  the  date  of such reduction, such accommodations have been and continue
    27  to be owned and operated in a manner consistent with an  agreement  with
    28  the  municipality contained in such note and mortgage to provide housing
    29  for such persons.  Notwithstanding such provision as  contained  in  the
    30  note  and  mortgage, the loan shall be reduced to zero only if, prior to
    31  or simultaneously with delivery of such note and mortgage, the supervis-
    32  ing agency made a written determination that  such  reduction  would  be
    33  necessary to ensure the continued affordability or economic viability of
    34  such  housing  project.  Such  written  determination shall document the
    35  basis upon which the loan was determined to be eligible for evaporation.
    36    § 27. Section 576-c of the private housing finance law, as amended  by
    37  section  2  of  chapter  254  of the laws of 1998, is amended to read as
    38  follows:
    39    § 576-c. Loans to housing development companies by a municipality.  In
    40  addition  to the powers granted to municipalities pursuant to this arti-
    41  cle, a municipality, acting by its supervising agency,  may  make  loans
    42  for  the  purposes  of  acquisition,  rehabilitation  or construction of
    43  dwelling accommodations to a non-profit housing development fund  compa-
    44  ny,  a  wholly-owned  subsidiary  of  such  company,  a  partnership the
    45  controlling interest of which is held by  such  company  and  which  has
    46  agreed  to  limit  profits  or rate of return of investors in accordance
    47  with a formula established or approved by  the  company,  or  a  private
    48  developer  which has agreed to limit profits or rate of return of inves-
    49  tors in accordance with a formula established or approved by the  compa-
    50  ny,  which  agrees  to  provide  housing  accommodations exclusively for
    51  persons and families of low income, at least thirty percent of whom  are
    52  referred  to  it by a municipality and have prior to their initial occu-
    53  pancy in such accommodations resided  in  emergency  shelter  facilities
    54  operated  by  or  on  behalf of the municipality or who are otherwise in
    55  need of emergency shelter as determined by the municipality,  providing,
    56  however,  that  in  the  case  of a building acquired by such a company,

        A. 6655--A                         18
 
     1  subsidiary, partnership, or developer the obligation to provide  housing
     2  accommodations  for  such  persons  shall be applicable only to dwelling
     3  accommodations which are or become vacant after the date of acquisition.
     4  Such  loans  may  be  made  for such period of time and pursuant to such
     5  terms and conditions as may be required by the municipality,  including,
     6  but not limited to, terms and conditions providing that the lien created
     7  by  the  note and mortgage, and, as applicable, any regulatory agreement
     8  executed by the owner and such municipality, may be recorded in an equal
     9  or subordinate position, or subsequently made equal or  subordinate,  to
    10  the  lien  recorded  by any private lender against the dwelling aided by
    11  the loan made pursuant to this article, and the  supervising  agency  of
    12  such  municipality  may provide that the amount of the note and mortgage
    13  shall automatically be reduced to zero in five equal decrements commenc-
    14  ing on the tenth year after the initial occupancy date,  provided  that,
    15  as  of  the  date  of  such reduction, such accommodations have been and
    16  [continues] continue to be owned and operated  in  a  manner  consistent
    17  with an agreement with the municipality contained in such note and mort-
    18  gage  to  provide  housing  for  such  persons.    Notwithstanding  such
    19  provision as contained in the note  and  mortgage,  the  loan  shall  be
    20  reduced  to  zero  only  if, prior to or simultaneously with delivery of
    21  such note and mortgage, the supervising agency made a  written  determi-
    22  nation  that  such  reduction would be necessary to ensure the continued
    23  affordability or economic viability of such housing project. Such  writ-
    24  ten  determination  shall  document  the  basis  upon which the loan was
    25  determined to be eligible for evaporation.
    26    § 28. The private housing finance law is amended by  adding  four  new
    27  sections 611, 612, 613 and 614 to read as follows:
    28    §  611. Rent stabilization and regulatory agreements. 1. Notwithstand-
    29  ing any other provision of law, including  the  provisions  of,  or  any
    30  regulation  promulgated pursuant to, the emergency tenant protection act
    31  of nineteen seventy-four or  the  rent  stabilization  law  of  nineteen
    32  hundred sixty-nine, the state division of housing and community renewal,
    33  when  supervising  housing  accommodations under provisions of law other
    34  than the emergency tenant protection act of nineteen seventy-four or the
    35  rent stabilization law of nineteen hundred sixty-nine, the New York city
    36  department of housing preservation and development, the New  York  state
    37  urban  development corporation, the New York state housing finance agen-
    38  cy, the New York state housing trust fund, and the New York city housing
    39  development corporation, or such other state or municipal agency,  poli-
    40  tical  subdivision,  public benefit corporation,   or instrumentality as
    41  the state division of housing and community renewal shall identify, may,
    42  by agreement with an owner of a multiple dwelling, subject  any  housing
    43  accommodation   in  such  multiple  dwelling  to  the  emergency  tenant
    44  protection act of nineteen seventy-four or the rent stabilization law of
    45  nineteen hundred sixty-nine, or both, if applicable to the municipality.
    46  The requirements of such agreement  shall  supplement  any  requirements
    47  imposed  on  such housing accommodation pursuant to any other provisions
    48  of law.
    49    2. Any agreement between a state or municipal agency, political subdi-
    50  vision, public benefit  corporation,  or  instrumentality  described  in
    51  subdivision one of this section and an owner of a multiple dwelling that
    52  contains  provisions  that  are  consistent with subdivision one of this
    53  section and that is in effect as of the effective date of  this  section
    54  is and will remain valid and enforceable.
    55    § 612. Compliance monitoring. 1. Any supervising agency and any corpo-
    56  rate  governmental  agency that constitutes a public benefit corporation

        A. 6655--A                         19
 
     1  created pursuant to this chapter shall have the power to: (a)  subpoena,
     2  require  the  attendance of and examine and take testimony under oath of
     3  such persons as it deems necessary to monitor,  and  enforce  compliance
     4  with, a note, mortgage, other financing agreement, regulatory agreement,
     5  deed,  land  disposition  agreement,  or  restrictive  covenant  with or
     6  approved by such agency or corporation and entered  into  in  connection
     7  with  an  action  taken  pursuant to this chapter, the general municipal
     8  law, the real property tax law, or the New York city zoning  resolution;
     9  and  (b) subpoena and require the production of books, accounts, papers,
    10  documents and other evidence related to such monitoring and enforcement.
    11    2.  Any person who has been issued a subpoena, or any  other  require-
    12  ment  to  testify  or produce books and records, pursuant to subdivision
    13  one of this section, shall be required to comply with such  subpoena  or
    14  other  requirement within a reasonable period of time established by the
    15  supervising agency  or  public  benefit  corporation  that  issued  such
    16  subpoena. Each day in which a person fails to comply with such subpoena,
    17  or  with  any  other  such  requirement  to testify or produce books and
    18  records, shall constitute a separate  violation  of  this  section.  The
    19  civil penalty for each such violation shall be not more than two hundred
    20  fifty  dollars, provided that such penalty shall not apply to any period
    21  during which such subpoena or other requirement to  testify  or  produce
    22  books  and  records  is  the  subject  of  a pending judicial proceeding
    23  commenced prior to the expiration of the period of time  established  by
    24  such  supervising  agency  or  public benefit corporation for compliance
    25  with such subpoena or other requirement to testify or produce books  and
    26  records.
    27    3.    Any  such  supervising  agency or public benefit corporation may
    28  promulgate rules and regulations to carry out  the  provisions  of  this
    29  section.
    30    §  613.  Charges.  A municipality, or a supervising agency thereunder,
    31  may require the payment of charges by  an  owner  in  consideration  for
    32  financing,  regulation,  supervision  and audit of loans and grants made
    33  pursuant to the provisions of this chapter. Such charges shall  be  paid
    34  into the treasury of the municipality requiring the charges and shall be
    35  paid and deposited in the general fund of any such municipality.
    36    §  614.  Servicing  loans.  An agency may make provision in a note and
    37  loan agreement or by separate agreement for the performance of  loan  or
    38  grant  servicing  functions,  including,  but  not limited to, functions
    39  related to lending or providing a grant for construction, as may  gener-
    40  ally  be  performed  by  an institutional lender. Such agency may act in
    41  such capacity or appoint or consent to the appointment  of  a  financial
    42  institution  or other qualified entity, as determined by such agency, to
    43  act in such capacity on behalf of such agency. Such  agency  may  pay  a
    44  reasonable  and  customary  fee  to  such financial institution or other
    45  qualified entity appointed by such agency, or to whose appointment  such
    46  agency  provided  consent,  for  the  performance  of such loan or grant
    47  servicing functions.
    48    § 29. Section 800 of the private housing finance law,  as  amended  by
    49  chapter 456 of the laws of 2003, is amended to read as follows:
    50    § 800. Policy and purposes of article. It is hereby declared and found
    51  that there exists in municipalities in this state substandard and insan-
    52  itary areas and neighborhoods characterized by undermaintained and dete-
    53  riorating  housing  accommodations  and  under-utilized  non-residential
    54  buildings and under-utilized vacant land. It is further found that there
    55  exists in such municipalities a  diminishing  and  seriously  inadequate
    56  supply  of  safe  and sanitary dwelling accommodations, particularly for

        A. 6655--A                         20
 
     1  persons of low income; that the loss of housing accommodations is caused
     2  by the inability of the ordinary unaided operations  of  private  enter-
     3  prise  to  make loans for rehabilitation or construction purposes or for
     4  conversion  which  accelerates the process of deterioration and abandon-
     5  ment, turning active and viable neighborhoods into  slums  and  blighted
     6  areas;  and  that the prevention of deterioration and loss through aban-
     7  donment can only be achieved by the elimination of conditions which  are
     8  unsafe  or detrimental to health, the replacement of antiquated heating,
     9  plumbing, and electrical systems and, where necessary, the overall reha-
    10  bilitation of certain housing accommodations, the  construction  of  new
    11  housing  accommodations  on vacant land and the conversion of under-uti-
    12  lized non-residential property to residential use, and that the unavail-
    13  ability of funds for the conversion of under-utilized property to  resi-
    14  dential   use,  for  the  preservation  and  rehabilitation  of  housing
    15  accommodations and for the construction of new housing accommodations on
    16  vacant land constitutes a threat to the health, safety and well-being of
    17  the persons who occupy them and denies  to  others  the  possibility  of
    18  living in safe and sanitary housing accommodations.
    19    In  order to promote the preservation and rehabilitation of such hous-
    20  ing accommodations, the creation of new housing  accommodations  by  the
    21  conversion  of  under-utilized  non-residential  property  into multiple
    22  dwellings and the construction of new housing accommodations  on  vacant
    23  land in such areas and to encourage the investment of private capital in
    24  such  areas,  provision  should  be  made  for a municipality to attract
    25  private investment for such  purposes  by  utilizing  funds,  which  are
    26  available  from the federal government through specific or discretionary
    27  grants, or are available from other financing sources, for joint partic-
    28  ipation loans with private investors, or loans or grants by the  munici-
    29  pality,  to  effect the required construction, rehabilitation or conver-
    30  sion.
    31    The necessity in the public interest for  the  provisions  hereinafter
    32  enacted is hereby declared as a matter of legislative determination.
    33    § 30. Subdivision 5 of section 801 of the private housing finance law,
    34  as  amended  by  chapter  456 of the laws of 2003, is amended to read as
    35  follows:
    36    5. "Owner" shall mean an individual, partnership, corporation or other
    37  entity, including a non-profit company, a mutual company, or  a  housing
    38  development  fund company, which holds record or beneficial title in fee
    39  simple to the existing multiple dwelling  to  be  rehabilitated  or  the
    40  non-residential  property  to  be converted into a multiple dwelling and
    41  the real property upon which it is situate or to vacant land upon  which
    42  the  new multiple dwelling is to be constructed, or is the lessee of any
    43  such real property having an unexpired term of at least thirty years.
    44    § 31. Section 801 of the private housing finance  law  is  amended  by
    45  adding a new subdivision 5-a to read as follows:
    46    5-a.  "Participation  loan" and the municipality's "participation" in,
    47  "portion" of, or "investment" in a loan, or words  of  similar  meaning,
    48  shall  mean  any  loan or grant made by the municipality or the New York
    49  city housing development corporation pursuant  to  this  article  either
    50  with  or  without a private investor, provided, however, that provisions
    51  of this article concerning the repayment or forgiveness of, or  security
    52  for, a loan shall not apply to any grant made pursuant to this article.
    53    § 32. Subdivision 6 of section 801 of the private housing finance law,
    54  as  amended  by  chapter  456 of the laws of 2003, is amended to read as
    55  follows:

        A. 6655--A                         21
 
     1    6. "Private investor" shall mean one or  more  banking  organizations,
     2  foundations,  labor  unions,  credit  unions,  employers'  associations,
     3  veterans'  organizations,  colleges,  universities,  educational  insti-
     4  tutions,  child  care  institutions,  hospitals, medical research insti-
     5  tutes, insurance companies, trustees or fiduciaries, trustees of pension
     6  and  retirement  funds and systems, corporations, partnerships, individ-
     7  uals or other entities or any combination of the  foregoing,  and  shall
     8  include  the  United States of America and the state of New York and any
     9  [of its agencies acting as a lender under the loan program  pursuant  to
    10  section  three  hundred  twelve  of  the housing act of nineteen hundred
    11  sixty-four and any amendments thereto or any  similar  program]  agency,
    12  office  or  public benefit corporation thereof. As used in this subdivi-
    13  sion, the terms "trustees" and "fiduciaries" shall include any fiduciary
    14  or fiduciaries holding funds  for  investment,  and  the  term  "banking
    15  organizations"  shall  have the same meaning as in subdivision eleven of
    16  section two of the banking law.
    17    § 33. Subdivisions 1, 3 and 4 of section 802 of  the  private  housing
    18  finance  law, subdivisions 1 and 3 as amended by chapter 456 of the laws
    19  of 2003 and subdivision 4 as added by chapter 822 of the laws  of  1976,
    20  are amended to read as follows:
    21    1. (a) Notwithstanding the provisions of any general, special or local
    22  law,  one  or  more private investors and a municipality, acting through
    23  its agency, shall have the power to participate  and  invest  in  making
    24  loans  to  the owners of existing multiple dwellings or to the owners of
    25  non-residential property or to the owners of vacant land subject to  the
    26  limitations  of  subdivisions two through seven of this section, in such
    27  amounts as shall be required for (i) the rehabilitation of such existing
    28  multiple dwellings or for the conversion of such non-residential proper-
    29  ty or for the construction of [a] new multiple [dwelling]  dwellings  on
    30  such  vacant  land,  provided  that  such  rehabilitation, conversion or
    31  construction may include climate resiliency  improvements,  and  if  any
    32  such  owner  acquires the existing multiple dwelling or the non-residen-
    33  tial property or the vacant land for the purpose of such rehabilitation,
    34  conversion or construction or owns the existing multiple dwelling or the
    35  non-residential property or the vacant land subject  to  an  outstanding
    36  indebtedness, such loans may be made exclusively for or may include such
    37  amounts  as  may be required for the cost of such acquisition or for the
    38  refinancing  of  such  outstanding  indebtedness,  (ii)  providing  site
    39  improvements  located  on  the  property on which such existing multiple
    40  dwellings are located or on such non-residential property or vacant land
    41  or in a public right-of-way, incidental or appurtenant to such rehabili-
    42  tation, conversion or construction, including, but not limited to, water
    43  and sewer facilities, sidewalks,  landscaping,  parks  and  open  space,
    44  social,  recreational, communal and other non-residential facilities and
    45  the outfitting thereof, the curing of problems caused by  abnormal  site
    46  conditions,  excavation and construction of footings and foundations and
    47  other improvements associated with the provision of  infrastructure  for
    48  housing accommodations, or (iii) providing for other costs of developing
    49  housing  accommodations,  and  such private investors and a municipality
    50  may jointly participate or invest in the making of  temporary  loans  or
    51  advances  to  such owners in anticipation of the permanent participation
    52  loans for such purposes.
    53    (b) Notwithstanding the provisions of any general,  special  or  local
    54  law,  and  in  addition to the power to make or contract to make partic-
    55  ipation loans granted by paragraph (a) of this subdivision, the  munici-
    56  pality,  acting through its agency, and the New York city housing devel-

        A. 6655--A                         22
 
     1  opment corporation shall each have the power to make or contract to make
     2  loans or grants to any owner described in paragraph (a) of this subdivi-
     3  sion without the participation of a private investor, on the same  terms
     4  as permitted under such paragraph for a participation loan.
     5    3.  [(a)]  Each  participation loan shall be secured by a bond or note
     6  and single participating mortgage or by  separate  bonds  or  notes  and
     7  mortgages  upon  the  existing  multiple dwelling or the non-residential
     8  property and the land upon which it is situated or, in the case  of  the
     9  construction  of  a  new multiple dwelling, upon the vacant land and the
    10  multiple dwelling to be constructed, or,  in  the  case  of  a  multiple
    11  dwelling  held in the condominium form of ownership, a note and mortgage
    12  upon the condominium units rehabilitated with such  participation  loan,
    13  provided  that a participation loan to an owner who is a lessee shall be
    14  secured by a leasehold interest in such property, and provided, further,
    15  that each such loan shall be made upon such terms and conditions as  may
    16  be approved by the agency, including but not limited to, provisions that
    17  [(i)]  (a)  priority may be given to the payment of the principal of and
    18  interest on that portion of the mortgage  indebtedness  attributable  to
    19  participation  in  the loan by one or more private investors, [(ii)] (b)
    20  the interest of the municipality created as a result of  making  such  a
    21  mortgage  loan  may  be subordinated to the interest that one or more of
    22  such private investors may have upon such participation, [(iii)] (c) the
    23  interest of each upon such participation need not be of  equal  priority
    24  as  to  lien  nor  be equal as to interest rate, time or rate of amorti-
    25  zation of principal or time of payment of interest, or otherwise, [(iv)]
    26  (d) the bond or note and mortgage may provide  that  the  municipality's
    27  portion  of  a  participation  loan made to an owner shall be reduced to
    28  zero commencing in the fifteenth year after the execution of the bond or
    29  note and mortgage, provided that, as of the date of any such  reduction,
    30  such  multiple  dwelling has been and continues to be owned and operated
    31  in a manner consistent with a  regulatory  agreement  with  the  munici-
    32  pality.  Notwithstanding such provision as contained in the bond or note
    33  and mortgage, the municipality's portion of the loan shall be reduced to
    34  zero only if, prior to or simultaneously with delivery of such  bond  or
    35  note  and  mortgage,  the  agency made a written determination that such
    36  reduction would be necessary to ensure the  continued  affordability  or
    37  economic  viability of the multiple dwelling. Such written determination
    38  shall document the basis upon which the loan was determined to be eligi-
    39  ble for evaporation.
    40    [(b) The aggregate amount of each such participation  loan  shall  not
    41  exceed  the cost of the rehabilitation, conversion or construction, plus
    42  the costs of any or all undertakings necessary for the planning, financ-
    43  ing, acquisition, satisfaction of tax liens and  other  municipal  liens
    44  and  encumbrances, construction, equipment and development in connection
    45  therewith, provided that, if any portion of such loan is  used  for  the
    46  cost  of  acquisition or for refinancing, the amount of a municipality's
    47  portion of such loan shall not exceed one and one-half times the cost of
    48  rehabilitation, conversion or construction.
    49    (c) The amount of any such loan, together with the amount of all prior
    50  liens and encumbrances, shall not exceed, except in the case of  a  loan
    51  made to a non-profit company, a mutual company, or a housing development
    52  fund company, ninety per centum of value unless the agency makes a writ-
    53  ten  determination  that the owner has insufficient resources to pay for
    54  the remaining ten per centum of value, in which case such loan shall not
    55  exceed ninety-five per centum of value. The amount  of  any  such  loan,
    56  together  with the amount of all prior liens and encumbrances, made to a

        A. 6655--A                         23

     1  non-profit company, a mutual company,  or  a  housing  development  fund
     2  company  shall  not exceed value, provided that when after completion of
     3  such rehabilitation, conversion or construction, such multiple  dwelling
     4  is,  or  is  to  be operated, exclusively for the benefit of persons and
     5  families who are entitled to occupancy by reason of ownership  of  stock
     6  in  the  corporate  owners,  such loan shall not exceed ninety-eight per
     7  centum of value unless the agency makes a written determination that the
     8  owner has insufficient resources to pay for the remaining two per centum
     9  of value, in which case such loan shall not exceed value.]
    10    4. Each such bond or note and mortgage or bonds or notes and mortgages
    11  shall be repaid over  or  within  a  period  of  [thirty]  forty  years,
    12  provided  that  such  period may be extended as the agency may determine
    13  necessary to ensure the continued affordability or economic viability of
    14  the multiple dwelling, in such manner as may be provided in such bond or
    15  note and mortgage or bonds or notes and mortgages [but in no case  shall
    16  the  term of such loan exceed the probable life of the multiple dwelling
    17  which is hereby determined to be thirty years]. Such bond  or  note  and
    18  mortgage  or bonds or notes and mortgages and any contract in connection
    19  with such permanent and temporary loans may contain such other terms and
    20  provisions not inconsistent with the provisions of this article  as  the
    21  local  legislative body or the agency may deem necessary or desirable to
    22  secure repayment of the loan, the interest thereon and other charges  in
    23  connection  therewith  and  to  carry out the purposes and provisions of
    24  this article.
    25    § 34. Subdivisions 2, 3 and 6 of section 1151 of the  private  housing
    26  finance law, subdivision 2 as amended by chapter 567 of the laws of 1993
    27  and  subdivisions  3  and 6 as added by chapter 639 of the laws of 1989,
    28  are amended to read as follows:
    29    2. "Eligible project" shall mean a project intended to  construct  new
    30  housing  accommodations  on  an  eligible  site  by  new construction or
    31  substantial rehabilitation,  provided  that  such  new  construction  or
    32  substantial  rehabilitation may include climate resiliency improvements.
    33  An eligible project shall serve the needs  of  persons  of  low  income,
    34  including privately-owned one to four family dwellings, condominiums and
    35  cooperatives, and rental projects.
    36    3.  ["Development costs" shall mean the reasonable and necessary costs
    37  for  planning,  financing,  acquisition  of  land   or   buildings   and
    38  construction  of  new  buildings  or the reconstruction, rehabilitation,
    39  repair or remodeling of existing buildings and the  costs  of  necessary
    40  site  improvements]  "Participation loan" and the city's "participation"
    41  in, "portion" of, or "investment" in a loan, or words of  similar  mean-
    42  ing,  shall  mean  any loan or grant made by the agency pursuant to this
    43  article either with or without a private lender, provided, however, that
    44  provisions of this article concerning the repayment or  forgiveness  of,
    45  or security for, a loan shall not apply to any grant.
    46    6.  "Loan" shall mean a [first] mortgage loan made by a private lender
    47  in participation with the city of New York to a sponsor for the  purpose
    48  of  construction  of  an  eligible project including a loan in which the
    49  portion of the loan funded by the agency is represented  by  a  separate
    50  note and mortgage.
    51    §  35.  Section  1152  of the private housing finance law, as added by
    52  chapter 639 of the laws of 1989, subdivision 4 as amended  and  subdivi-
    53  sion  13  as added by chapter 241 of the laws of 1998, subdivision 12 as
    54  added by chapter 400 of the laws of 1994 and paragraph e of  subdivision
    55  12  as amended by chapter 118 of the laws of 2003, is amended to read as
    56  follows:

        A. 6655--A                         24
 
     1    § 1152. Affordable housing development loans. 1.  (a)  Notwithstanding
     2  the provisions of any general, special or local law, one or more private
     3  lenders  and the city of New York, acting through the agency, shall have
     4  the power to participate and invest in making loans to sponsors for  the
     5  construction  of  eligible  projects. Such loans may be made exclusively
     6  for or may include such amounts as may be required for site  acquisition
     7  or  the  refinancing  of eligible projects. Each such participation loan
     8  shall be secured by a bond or note and single participating mortgage  or
     9  by separate bonds or notes and mortgages upon the eligible project. Such
    10  bond  or  note  and  mortgage or bonds or notes or mortgages may contain
    11  such other terms and provisions not inconsistent with the provisions  of
    12  this  article  as the agency may deem necessary or desirable, including,
    13  but not limited to, terms providing that the lien created by  such  note
    14  and  mortgage,  and, if applicable, any regulatory agreement executed by
    15  the sponsor and such agency or restrictive  covenant  approved  by  such
    16  agency,  may  be recorded in an equal or subordinate position, or subse-
    17  quently made equal or subordinate, to the lien created  by  any  private
    18  lender against such eligible project.
    19    (b)    Notwithstanding the provisions of any general, special or local
    20  law, and in addition to the power to make or contract  to  make  partic-
    21  ipation  loans granted by paragraph (a) of this subdivision, the city of
    22  New York, acting through the agency, shall have the  power  to  make  or
    23  contract to make loans or grants to any owner described in paragraph (a)
    24  of  this  subdivision  without the participation of a private lender, on
    25  the same terms as permitted under such  paragraph  for  a  participation
    26  loan.
    27    2.  [The portion of such loan funded by the agency shall not exceed an
    28  amount equal to sixty percent of the actual total development cost of an
    29  eligible project.] The agency may enter into an agreement with a private
    30  lender to deposit its share of a loan with  the  private  lender  to  be
    31  advanced  by  the  private lender. The portion of the loan funded by the
    32  agency may be equal to or subordinate in lien to the portion of the loan
    33  funded by the private lender and may contain such terms with respect  to
    34  interest  rate,  if  any, rate of amortization of principal, if any, and
    35  time of payment of interest and principal as determined by  the  agency.
    36  The  agency may make provision either in the mortgage or mortgages or by
    37  separate agreement for the performance by the  private  lender  of  such
    38  services  as  are  generally  performed  by  a banking institution which
    39  itself holds a mortgage,  including,  without  limitation,  construction
    40  loan  advances,  construction  supervision,  initiation  of  foreclosure
    41  proceedings,  procurement  of  insurance,  and  all  other  matters   in
    42  connection  with the financing, supervision, regulation and audit of any
    43  such loan to any such eligible project.
    44    3. [If a portion of the loan is to be utilized for acquisition  of  an
    45  eligible  site  such portion shall in no event exceed fifteen percent of
    46  the total amount of such loan or the appraised value of the site, which-
    47  ever is the lesser.
    48    4.] If the eligible project is to consist of one to four unit dwelling
    49  accommodations or cooperative or condominium units, the  agency's  share
    50  of the loan may be converted after completion of construction into mort-
    51  gages  on such dwelling accommodations or condominium units or financing
    52  statements filed with respect to such cooperative shares, provided  such
    53  units  or such cooperative shares are purchased by persons of [eligible]
    54  low income. Such mortgages and any  blanket  mortgage  that  the  agency
    55  retains  on  any  portion  of,  or  on  all of, the eligible project may
    56  provide that [they] such mortgages and such blanket mortgage will  auto-

        A. 6655--A                         25
 
     1  matically be reduced to zero over a period of continuous [owner-occupan-
     2  cy  of  the  housing accommodations assisted by such loan] compliance by
     3  the mortgagor with a regulatory agreement or restrictive  covenant  with
     4  or  approved  by  the agency and upon the satisfaction of any additional
     5  conditions  specified  therein.    Notwithstanding  such  provision   as
     6  contained  in  such mortgage, the loan shall be reduced to zero only if,
     7  prior to or simultaneously with delivery of such  mortgage,  the  agency
     8  made  a  written determination that such reduction would be necessary to
     9  ensure the continued affordability or economic viability of the eligible
    10  project. Such written determination shall document the basis upon  which
    11  the  loan  was determined to be eligible for evaporation. Such period of
    12  continuous [owner-occupancy] compliance with such  regulatory  agreement
    13  or restrictive covenant shall not be less than fifteen years.
    14    [5.]  4.  If  the  eligible  project is to consist of one to four unit
    15  dwelling accommodations or cooperative or condominium units, the  agency
    16  shall  require  that  the  dwelling  units  be offered only to bona fide
    17  purchasers who intend to occupy a unit as their principal place of resi-
    18  dence; provided, however, that in the case of two to four unit  dwelling
    19  accommodations  the bona fide purchaser may occupy only a single unit as
    20  a principal place of residence. If the purchaser ceases  to  occupy  the
    21  unit  as  a  principal  place  of  residence, the agency may provide for
    22  recapture of all or a portion of the agency's share of the loan.
    23    [6.] 5. If the eligible project is  a  rental  project,  the  agency's
    24  share of the loan may be converted after completion of construction into
    25  a [non-interest bearing, non-amortizing thirty year loan] permanent loan
    26  with a term of forty years, provided that such period may be extended as
    27  the  agency  may determine is necessary to ensure the continued afforda-
    28  bility or economic viability of the eligible project,  payable  [at  the
    29  end  of  its  term, provided that such loan shall be also payable out of
    30  profits upon any sale or refinancing of the project prior to the end  of
    31  such  thirty  year period] in such manner as may be provided in the note
    32  and any mortgage in connection with such loan. Such  note  and  mortgage
    33  may  contain  such terms and conditions as the agency may deem necessary
    34  or desirable to effectuate the purposes and provisions of this  article.
    35  The  sponsor  or  any subsequent owner or owners of such a project shall
    36  agree to rent such units only to persons of [eligible]  low  income  for
    37  such  [thirty  year] period [and shall agree that all] as the agency may
    38  determine. All such units shall  be  subject  to  the  emergency  tenant
    39  protection  act  of nineteen seventy-four and the rent stabilization law
    40  of nineteen hundred sixty-nine, as amended [for a period of thirty years
    41  after initial occupancy], unless converted to a cooperative or condomin-
    42  ium pursuant to subdivision [eight] seven of this section. [At  the  end
    43  of such period each unit shall continue to be subject to such law there-
    44  after  until  the  first  vacancy occurs at which time the unit shall be
    45  decontrolled.] Initial rentals for all rental units shall be set by  the
    46  agency.
    47    [7.]  6.  If  the  eligible project is a rental project annual profits
    48  shall be limited to an amount set by the agency for as long as the  loan
    49  is  outstanding.  Excess  profits  shall  be  used  to establish project
    50  reserves, provide capital improvements or reduce the principal amount of
    51  the agency's loan, as determined by the agency.
    52    [8.] 7. If the eligible project is a rental project, no conversion  to
    53  a  cooperative  or condominium shall be permitted for a period of twenty
    54  years after initial occupancy, and unless (i) the agency's share of  the
    55  loan  is prepaid upon such conversion, (ii) the conversion shall be done
    56  pursuant to section three hundred fifty-two-eeee of the general business

        A. 6655--A                         26
 
     1  law as a non-eviction plan, and (iii) apartments  occupied  by  non-pur-
     2  chasing  tenants continue to be subject to the rent stabilization law of
     3  nineteen hundred sixty-nine as amended, until the occurrence of a vacan-
     4  cy.
     5    [9.]  8. A loan made pursuant to this article shall be exempt from the
     6  mortgage recording taxes imposed by article eleven of the tax law.
     7    [10.] 9. Notwithstanding the provisions of  any  general,  special  or
     8  local  law  or  charter, the agency shall have power, without soliciting
     9  competing bids, to contract with any sponsor or to make provision  in  a
    10  loan  for  the  construction  or reconstruction of any site improvements
    11  located in the public right-of-way or on the  eligible  site  which  are
    12  necessary for the development of an eligible project. Such site improve-
    13  ments  may  include,  but  shall  not be limited to, streets, sidewalks,
    14  landscaping, parks and open space, social,  recreational,  communal  and
    15  other  non-residential  facilities  and the outfitting thereof, lighting
    16  fixtures, and water and sewer lines, incidental or  appurtenant  to  the
    17  construction of such eligible projects.
    18    [11.]  10.  No  loan  shall be made pursuant to the provisions of this
    19  article unless the agency finds that: (a) the construction of the eligi-
    20  ble project does not directly displace current low and  moderate  income
    21  residents  of  the  eligible  site;  (b)  the eligible project leverages
    22  private and other public investment, if any, so as to reduce the  amount
    23  of  assistance  provided  pursuant to this article to the minimal amount
    24  which is necessary for construction of the  eligible  project;  (c)  the
    25  eligible  project  will  be built by a private developer/builder who has
    26  agreed to limit its profit in accordance with a formula satisfactory  to
    27  the  agency; (d) the eligible project will provide assistance to an area
    28  which is blighted or deteriorated or has a blighting  influence  on  the
    29  surrounding  area, or is in danger of becoming a slum or a blighted area
    30  because of neighborhood conditions indicating an inability or unwilling-
    31  ness of the private sector to cause the type of construction for which a
    32  loan is to be provided; and (e) the  eligible  project  will  make  home
    33  ownership  or  rental housing affordable to persons who cannot presently
    34  afford the housing available based upon the ordinary  unaided  operation
    35  of private enterprise.
    36    [12.]  11.  a.  The  agency  may make non-interest bearing advances to
    37  sponsors to defray the pre-development costs  of  eligible  projects  in
    38  accordance with the provisions of this chapter.
    39    b.  No  such  advances shall be made unless the agency finds that: (i)
    40  the sponsor proposes to finance the eligible project in whole or in part
    41  by a loan granted pursuant to this  article  or  that  the  project,  if
    42  otherwise  financed, will provide housing for persons or families of low
    43  income, and that such project is otherwise consistent with the  purposes
    44  of  this article; (ii) the project site is suitable, there is a need for
    45  the housing type proposed in the area to be served and  the  project  is
    46  feasible;  and  (iii) it is reasonable to anticipate that financing will
    47  be obtained and the agency makes a finding to that effect.
    48    c. No such advances may be made  to  a  sponsor  unless  such  sponsor
    49  enters  into an agreement with the agency which provides that such spon-
    50  sor shall be regulated with respect to  rents,  profits,  dividends  and
    51  disposition  of  its  property  or  franchise,  in  accordance  with the
    52  provisions of this article.
    53    d. An advance granted pursuant to this section shall be used  only  to
    54  defray  the  pre-development costs of eligible projects. For purposes of
    55  this subdivision, the term  pre-development  costs  shall  include,  but
    56  shall  not  be  limited to: the reasonable and necessary costs for plan-

        A. 6655--A                         27

     1  ning, site preparation, developing architectural drawings and conducting
     2  engineering and environmental studies, but shall not include acquisition
     3  of  land  or  buildings,  drainage  and  landscaping  of  vacant   land,
     4  construction of new buildings or the reconstruction or rehabilitation of
     5  existing buildings.
     6    e.  Each  such  advance  shall  be repaid in full to the agency by the
     7  sponsor. Such repayment shall be made upon receipt by the sponsor or its
     8  successor in interest of the proceeds of its  mortgage  or  construction
     9  loan  for the eligible project, unless the agency extends the period for
    10  the repayment of such advances. In no event shall the time of  repayment
    11  be  extended  to  a  date  later than the date of final advance of funds
    12  pursuant to such mortgage or  construction  loan.  Notwithstanding  this
    13  paragraph,  the  agency may reduce such advance to zero over a period of
    14  continued compliance with the agency's agreement with the sponsor pursu-
    15  ant to paragraph c of this subdivision if the agency has made a  written
    16  determination  that  such  reduction  would  be  necessary to ensure the
    17  continued affordability or economic viability of the  eligible  project.
    18  Such written determination shall document the basis upon which the agen-
    19  cy's  non-interest  bearing  advance  was determined eligible for evapo-
    20  ration.
    21    f. If the agency, in its discretion, determines at any time that mort-
    22  gage or construction financing for  the  eligible  project  may  not  be
    23  obtained,  then all advances made to the sponsor pursuant to this subdi-
    24  vision shall become immediately due and payable upon the demand  of  the
    25  agency.
    26    [13.]  12.  If  the  eligible project is a rental project, the bond or
    27  note and mortgage or bonds or notes or mortgages issued by  the  sponsor
    28  of  any eligible project to secure a participation loan may provide that
    29  the city's portion of such loan shall be reduced to zero  commencing  on
    30  the fifteenth year after the execution of such bond or note and mortgage
    31  or  bonds  or  notes  or mortgages, provided that, as of the date of any
    32  such reduction, the eligible project has been and continues to be  owned
    33  and operated in a manner consistent with a regulatory agreement with the
    34  city.  Notwithstanding  such  provision as contained in the bond or note
    35  and mortgage or bonds or notes or mortgages, the loan shall  be  reduced
    36  to  zero  only if, prior to or simultaneously with delivery of such bond
    37  or note and mortgage or bonds or notes or mortgages, the agency  made  a
    38  written  determination  that such reduction would be necessary to ensure
    39  the continued  affordability  or  economic  viability  of  the  eligible
    40  project.  Such written determination shall document the basis upon which
    41  the loan was determined to be eligible for evaporation.
    42    § 36. Paragraph (g) of subdivision 6 of section 1802 of the  New  York
    43  city  charter,  as amended by vote of the people of the city of New York
    44  at the general election held in November of 1989, is amended to read  as
    45  follows:
    46    (g)  [impose and collect] require the payment of charges [and fees] in
    47  consideration for the financing, regulation, supervision  and  audit  of
    48  municipally-aided projects and loan programs administered by the commis-
    49  sioner,  which  charges  [and  fees]  shall  be  [set aside in a special
    50  account for administrative expenses of the  department]  paid  into  the
    51  treasury of the city and shall be paid and deposited in the general fund
    52  of the city;
    53    §  37. This act shall take effect immediately, provided that:  (i) the
    54  amendments to subdivision 1 of section 696-a of  the  general  municipal
    55  law  made  by section two of this act shall be subject to the expiration
    56  and reversion of such subdivision pursuant to section 2 of  chapter  613

        A. 6655--A                         28
 
     1  of  the  laws of 1996, as amended, when upon such date the provisions of
     2  section three of this act shall take effect; and (ii) the amendments  to
     3  subdivision  1  of section 576-c of the private housing finance law made
     4  by section twenty-six of this act shall be subject to the expiration and
     5  reversion of such subdivision pursuant to section 2 of chapter 84 of the
     6  laws  of 1993, as amended, when upon such date the provisions of section
     7  twenty-seven of this act shall take effect.
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