Bill Text: NY S02985 | 2023-2024 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Enacts the "housing affordability, resiliency, and energy efficiency investment act"; relates to the modernization of affordable housing financing authorities that authorize financing for the construction and rehabilitation of affordable housing.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2023-10-23 - SIGNED CHAP.535 [S02985 Detail]
Download: New_York-2023-S02985-Amended.html
Bill Title: Enacts the "housing affordability, resiliency, and energy efficiency investment act"; relates to the modernization of affordable housing financing authorities that authorize financing for the construction and rehabilitation of affordable housing.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2023-10-23 - SIGNED CHAP.535 [S02985 Detail]
Download: New_York-2023-S02985-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 2985--A 2023-2024 Regular Sessions IN SENATE January 26, 2023 ___________ Introduced by Sens. KAVANAGH, CLEARE, FERNANDEZ, SEPULVEDA -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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) EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07187-03-3S. 2985--A 2 1 providing for other costs of construction for the development of private 2 and multiple dwelling housing accommodations. 3 c. Any loan made in accordance with this section shall be secured by a 4 note and mortgage upon the property improved, other than any such prop- 5 erty title to which is held by the municipality or, in the case of a 6 condominium, a note and mortgage upon each of the [housing accommo-7dations] condominium units aided by such loan, or in the case of a coop- 8 erative housing corporation, a note and mortgage upon the economic 9 interest in such corporation of each tenant-shareholder aided by such 10 loan, or upon the property improved, other than any such property title 11 to which is held by the municipality, or upon both such economic inter- 12 est or property; provided, however, that all or part of any such loan 13 may be unsecured if necessary to satisfy the requirements of any partic- 14 ipating lender, and, provided further, that the lien created by the note 15 and mortgage may be recorded in an equal or subordinate position, or 16 subsequently made equal or subordinate, to a lien recorded by any 17 participating lender against such property. Such loan shall be repaid 18 over such period as the agency shall determine. 19 g. For purposes of this [section] article, (i) the term "mortgage" 20 shall include any pledge or assignment of shares or assignment of a 21 proprietary lease in a cooperative housing corporation where such pledge 22 or assignment is intended as security for the performance of an obli- 23 gation and which imposes a lien on or affects title to such shares or 24 such proprietary lease; and (ii) the term "owner" shall mean an individ- 25 ual, partnership, corporation or other entity, including a non-profit 26 company, a mutual company, or a housing development fund company, having 27 record or beneficial title in fee simple to real property or the lessee 28 thereof under a lease having a term of at least forty-nine years. 29 § 3. Section 696-a of the general municipal law, as amended by chapter 30 465 of the laws of 1993, is amended to read as follows: 31 § 696-a. Loans. Notwithstanding the provisions of any general, special 32 or local law, an agency is hereby authorized to make or contract to make 33 grants or loans[: (i)] to the owner of any property that is part of an 34 urban development action area project for the purpose of: (i) rehabili- 35 tation of an existing private or multiple dwelling or construction of a 36 new private or multiple dwelling, (ii) [for the purpose of] providing 37 site improvements, incidental or appurtenant to such rehabilitation or 38 such construction, within the urban development action area in which the 39 urban development action area project is located, including, but not 40 limited to, water and sewer facilities, sidewalks, landscaping, parks 41 and open space, social, recreational, communal and other non-residential 42 facilities and the outfitting thereof, the curing of problems caused by 43 abnormal site conditions, excavation and construction of footings and 44 foundations and other improvements associated with the provision of 45 infrastructure, or (iii) [for the purpose of] providing for other costs 46 of construction for the development of private and multiple dwelling 47 housing accommodations. In the case of a grant made under this section 48 for the rehabilitation of an existing multiple dwelling intended to be 49 converted to a condominium or cooperative form of ownership or for the 50 development of one to four unit housing accommodations or a condominium 51 or cooperative housing corporation, such grant shall require a regulato- 52 ry agreement with the agency limiting profits. Any loan made in accord- 53 ance with this section shall be secured by a note and mortgage upon the 54 property improved, other than any such property title to which is held 55 by the municipality, or, in the case of a condominium, a note and mort- 56 gage upon each of the [housing accommodations] condominium units aidedS. 2985--A 3 1 by such loan, or in the case of a cooperative housing corporation, a 2 note and mortgage upon the economic interest in such corporation of each 3 tenant-shareholder aided by such loan, or upon the property improved, 4 other than any such property title to which is held by the municipality, 5 or upon both such economic interest or property; provided, however, that 6 all or part of any such loan may be unsecured if necessary to satisfy 7 the requirements of any participating lender. Such loan shall be repaid 8 over such period as the agency shall determine. In the case of a loan 9 for rehabilitation of an existing multiple dwelling intended to be 10 converted to a condominium or cooperative form of ownership or a loan 11 for the provision of infrastructure or for the provision of other costs 12 of construction for the development of one to four unit housing accommo- 13 dations or a condominium or cooperative housing corporation, such note 14 and mortgage may provide that the loan shall automatically be reduced to 15 zero over a period of owner-occupancy of the housing accommodations 16 assisted by such loan. In the case of a grant or loan made under this 17 section for the purpose of providing rental housing for persons of low 18 income as defined in section two of the private housing finance law, 19 such loan or grant shall require a regulatory agreement with the agency 20 limiting profits and rentals charged. In the case of a loan made under 21 this section for the purpose of providing rental housing for persons of 22 low income as defined in section two of the private housing finance law, 23 such note and mortgage may provide that the loan shall automatically be 24 reduced to zero over a period of up to thirty years of compliance by the 25 owner with a regulatory agreement with the agency limiting profits and 26 rentals charged. The repayment of any loan made in accordance with this 27 section shall be made in such manner as may be provided in such note and 28 mortgage in connection with such loan, and may authorize the owner, with 29 the consent of the agency, to prepay the principal of the loan subject 30 to such terms and conditions as therein provided. Such note and mortgage 31 may contain such other terms and conditions not inconsistent with the 32 provisions of this article as the agency may deem necessary or desirable 33 to carrying out the purposes and provisions of this article including, 34 but not limited to, provisions concerning the repayment of the loan, the 35 interest, if any, thereon, and other charges in connection therewith. 36 For purposes of this [section] article, (1) the term "mortgage" shall 37 include any pledge or assignment of shares or assignment of a proprie- 38 tary lease in a cooperative housing corporation where such pledge or 39 assignment is intended as security for the performance of an obligation 40 and which imposes a lien on or affects title to such shares or such 41 proprietary lease; and (2) the term "owner" shall mean an individual, 42 partnership, corporation or other entity, including a non-profit compa- 43 ny, a mutual company, or a housing development fund company, having 44 record or beneficial title in fee simple to real property or the lessee 45 thereof under a lease having a term of at least forty-nine years. 46 § 4. The general municipal law is amended by adding two new sections 47 696-e and 696-f to read as follows: 48 § 696-e. Charges. A municipality, or an agency, making a loan or grant 49 pursuant to this article, may require the payment of charges by an owner 50 in consideration for the financing, regulation, supervision and audit of 51 such loan, or for regulation, supervision and audit of such grant. Such 52 charges shall be paid into the treasury of the municipality requiring 53 the charges and shall be paid and deposited in the general fund of any 54 such municipality. 55 § 696-f. Servicing. An agency may make provision in a note and loan 56 agreement or by separate agreement for the performance of loan or grantS. 2985--A 4 1 servicing functions, including, but not limited to, functions related to 2 lending or providing a grant for construction, as may generally be 3 performed by an institutional lender. Such agency may act in such capac- 4 ity or appoint or consent to the appointment of a financial institution 5 or other qualified entity, as determined by such agency, to act in such 6 capacity on behalf of such agency. Such agency may pay a reasonable and 7 customary fee to such financial institution or other qualified entity 8 appointed by such agency, or to whose appointment such agency provided 9 consent, for the performance of such loan or grant servicing functions. 10 § 5. Subdivision 41 of paragraph a of section 11.00 of the local 11 finance law, as amended by chapter 400 of the laws of 1994, is amended 12 to read as follows: 13 41. Housing. The effectuating of any of the purposes of the public 14 housing law, other than making loans to limited profit housing companies 15 pursuant to article two of the private housing finance law, and other 16 than making loans to owners of existing multiple dwellings, fifty years; 17 bonds issued by a housing authority pursuant to section forty-one of the 18 public housing law and guaranteed by a municipality pursuant to section 19 ninety-five of the public housing law, five years, in addition to the 20 foregoing period of fifty years, for the temporary financing of a 21 project prior to the permanent financing thereof; evidences of indebt- 22 edness issued to the state pursuant to paragraph c of section 20.00 of 23 this chapter, three years, in addition to the foregoing period of fifty 24 years for the temporary financing of a project prior to the permanent 25 financing thereof; loans to limited profit housing companies pursuant to 26 article two of the private housing finance law, fifty-five years; loans 27 or grants to owners of existing private or multiple dwellings, non-resi- 28 dential property, or vacant land pursuant to the provisions of article 29 eight, article eight-A, article eight-B, article eleven or article 30 fifteen of the private housing finance law, or loans for the 31 construction of multiple dwellings pursuant to article eleven of the 32 private housing finance law, or loans or grants for the pre-development 33 costs or construction of private or multiple dwellings pursuant to arti- 34 cle twenty-two of the private housing finance law, thirty years. 35 § 6. Section 2 of the private housing finance law is amended by adding 36 two new subdivisions 30 and 31 to read as follows: 37 30. "Climate resiliency improvements." Improvements for the purpose of 38 protecting land or any structures thereon from damage resulting from or 39 which may result from changes in climate, including, but not limited to, 40 extreme weather events, abnormal temperatures, and sea level rise, or of 41 reducing the impact of the operation of such structures on climate 42 change, including, but not limited to, improvements that reduce energy 43 consumption or promote the efficient use of natural resources. 44 31. "Private lender." One or more banking organizations, foundations, 45 labor unions, credit unions, employers' associations, veterans' organ- 46 izations, colleges, universities, educational institutions, child care 47 institutions, hospitals, medical research institutes, insurance compa- 48 nies, trustees or fiduciaries, trustees of pensions and retirement funds 49 and systems, corporations, partnerships, individuals or other entities 50 or any combination of the foregoing, and shall include any public bene- 51 fit corporation and the United States of America and any of its agencies 52 and departments. As used in this definition, the terms "trustees" and 53 "fiduciaries" shall include any fiduciary or fiduciaries holding funds 54 for investment and the term "banking organizations" shall have the same 55 meaning as in subdivision eleven of section two of the banking law.S. 2985--A 5 1 § 7. Section 400 of the private housing finance law is amended to read 2 as follows: 3 § 400. Policy and purposes of article. It is hereby declared that 4 there exists in municipalities in this state a seriously inadequate 5 supply of safe and sanitary dwelling accommodations for persons and 6 families of low income; that such shortage constitutes an emergency and 7 a grave menace to the health, safety, morals, welfare and comfort of 8 citizens of this state; that there exists in such municipalities a large 9 number of multiple dwellings which are inadequate, unsafe or insanitary 10 by reason of the absence of proper heating facilities or by reason of 11 the necessity for elimination of conditions dangerous to human life or 12 detrimental to health, including nuisances as defined[,] in section 13 three hundred nine of the multiple dwelling law, or for other rehabili- 14 tation or improvement and which can be made adequate, safe and sanitary, 15 by the installation of proper heating facilities or by other rehabili- 16 tation, preservation or improvement or by the elimination of such condi- 17 tions; that such installation, rehabilitation, preservation or improve- 18 ment cannot readily be provided by the ordinary unaided operation of 19 private enterprise for occupancy by persons or families of low income 20 without public aid in the form of low interest loans or grants to owners 21 of such multiple dwellings for the purpose of such installation, reha- 22 bilitation, preservation or improvement; that the installation of proper 23 heating facilities in such multiple dwellings or other rehabilitation, 24 preservation or improvement thereof for occupancy by persons of low 25 income as defined in this article is a public use and a public purpose 26 for which public money may be loaned or granted; that such conditions 27 require the provisions hereinafter enacted; and the necessity in the 28 public interest for the provisions hereinafter enacted is hereby 29 declared as a matter of legislative determination. 30 § 8. Subdivision 3 of section 401 of the private housing finance law, 31 paragraph a as amended by chapter 44 of the laws of 1976, and paragraph 32 b as amended by chapter 904 of the laws of 1962, is amended to read as 33 follows: 34 3. a. The term "persons or families of low income" shall mean "persons 35 of low income" or "families of low income" as defined in section two of 36 this chapter[, whose probable aggregate annual income during the period37of occupancy does not exceed six times the rental (including the value38or cost to them of heat, light, water and cooking fuel) of dwelling39units occupied by such persons or families in existing multiple dwell-40ings aided by a loan pursuant to this article, except that in the case41of persons or families with three or more dependents, such ratio shall42not exceed seven to one, and except further that the income limitations43prescribed by this paragraph shall be subject to the provisions of44subdivision two of section four hundred three of this article.45In calculating annual income, social security payments and income46received from private pension funds by any person sixty-two years of age47or more shall be excluded up to a total maximum amount of seventy-five48dollars per month. The term "probable aggregate annual income" means the49annual income of the chief wage earner of the family, plus all other50income of other members of the family over the age of twenty-one years,51plus a proportion of income of gainfully employed members under the age52of twenty-one years, the proportion to be determined by the agency. The53agency may exclude a proportion of the income of other members of the54family over the age of twenty-one years for the purpose of determining55eligibility for commencement of occupancy or continued occupancy, or for56establishing rental of such family, or for all such purposes].S. 2985--A 6 1 b. Notwithstanding the provisions of paragraph a of this subdivision, 2 [and subject to the provisions of subdivision three of section four3hundred three of this article] the term "persons or families of low 4 income" shall also mean any person or family who, immediately prior to 5 the date on which a contract for a loan with respect to an existing 6 multiple dwelling is entered into pursuant to the provisions of this 7 article, occupies any dwelling unit in such multiple dwelling and who 8 continuously occupies such unit during and after completion of central 9 heating or other rehabilitation or improvement performed pursuant to 10 such contract provided, however, that any person or family required to 11 remove from any such dwelling unit because of such installation, reha- 12 bilitation or improvement shall, for the purpose of this section, be 13 deemed to have continuously occupied such unit and shall have preference 14 in re-entering such multiple dwelling upon completion of the aforesaid 15 work. 16 § 9. Subdivision 6 of section 401 of the private housing finance law, 17 as added by chapter 505 of the laws of 1973, is amended to read as 18 follows: 19 6. The term "owner" shall mean a person having record or beneficial 20 title in fee simple to real property or the lessee thereof under a lease 21 having an unexpired term of at least thirty years. 22 § 10. Subdivision 1 of section 402 of the private housing finance law, 23 as amended by chapter 808 of the laws of 1971, is amended and a new 24 subdivision 1-a is added to read as follows: 25 1. Notwithstanding the provisions of any general, special or local 26 law, a municipality, by such officer or agency as determined by its 27 local legislative body, is hereby authorized: 28 (a) to make or contract to make loans to the owners of existing multi- 29 ple dwellings within its territorial limits, subject to the limitations 30 in subdivision two of this section, in such amounts as may be required 31 for the installation of proper heating facilities, the incorporation of 32 climate resiliency improvements, or elimination of conditions dangerous 33 to human life or detrimental to health, including nuisances as defined 34 in section three hundred nine of the multiple dwelling law, or other 35 rehabilitation, preservation or improvement of such multiple dwellings, 36 and if such owner acquires the multiple dwelling for the purposes of 37 such rehabilitation, preservation or improvement or owns the multiple 38 dwelling subject to an outstanding indebtedness, such loans may be made 39 exclusively for or may include such amounts as may be required for the 40 cost of such acquisition or for the refinancing of such outstanding 41 indebtedness, and may make temporary loans or advances to such owners in 42 anticipation of the permanent municipal loans for such purposes[.]; and 43 (b) to make or contract to make grants to any owner described in para- 44 graph (a) of this subdivision, on the same terms as permitted under such 45 paragraph for a loan. 46 1-a. As used in this article, the term "loan" shall include any grant 47 made by a municipality pursuant to this article, provided, however, that 48 any provision of this article concerning the repayment or forgiveness 49 of, or security for, a loan shall not apply to any grant made pursuant 50 to this article. 51 § 11. Subdivisions 2-a, 2-b, 2-c and 4 of section 402 of the private 52 housing finance law, subdivision 2-a as added by chapter 213 of the laws 53 of 1975, subdivision 2-b as amended by chapter 362 of the laws of 2000, 54 and subdivision 2-c as amended by chapter 101 of the laws of 1994, are 55 amended to read as follows:S. 2985--A 7 1 2-a. [As used in this section the term "value" shall mean the "as is"2value of the multiple dwelling and the land upon which it is situated3prior to such installation, elimination, other rehabilitation or4improvement referred to in subdivision one of this section plus the5total of all costs of such installation, elimination, rehabilitation or6improvement including, but not limited to, the costs of any or all7undertakings necessary for the planning, financing, tenant relocation,8acquisition, construction, equipment and development in connection ther-9ewith.102-b.] (a) Each permanent loan shall be secured by a bond and mortgage 11 or note and mortgage upon the multiple dwelling and the land upon which 12 it is situated, provided that where the multiple dwelling is held in the 13 condominium form of ownership, such loan shall be secured by a bond and 14 mortgage or note and mortgage upon the condominium units rehabilitated 15 or improved with such loan; where the loan is made to an owner who is a 16 lessee, such loan shall be secured by [a first lien on such property] a 17 leasehold interest in such property. 18 (b) [The amount of any such loan shall not exceed the cost of the19installation of proper heating facilities, or elimination of conditions20dangerous to human life or detrimental to health, including nuisances as21defined in section three hundred nine of the multiple dwelling law, or22other rehabilitation or improvement provided that, if any portion of23such loan is used for the cost of acquisition of the land and the multi-24ple dwelling or for re-financing, the total amount of such loan shall25not exceed two times the cost of such installation, elimination of such26conditions, rehabilitation or improvement.27(c) The amount of any such loan, together with the amount of all prior28liens and encumbrances, shall not exceed, except in the case of a loan29made to a non-profit company, a mutual company, or a housing development30fund company, ninety per centum of the value of the property, after31completion of the installation of proper heating facilities, or elimi-32nation of such conditions or other rehabilitation or improvement, as33estimated by the agency, unless the agency makes a written determination34that the owner has insufficient resources to pay for the remaining ten35per centum of the value of the property, after completion of such36installation, elimination, or other rehabilitation or improvement, as37estimated by the agency, in which case such loan shall not exceed nine-38ty-five per centum of the value of the property, after completion of the39installation of proper heating facilities, or elimination of such condi-40tions or other rehabilitation or improvement, as estimated by the agen-41cy. The amount of any such loan, together with the amount of all prior42liens and encumbrances, made to a non-profit company, a mutual company,43or a housing development fund company shall not exceed the value of the44property after completion of such installation, elimination, or other45rehabilitation or improvement, as estimated by the agency provided that46when after completion of such installation, elimination or other reha-47bilitation or improvement, such project is, or is to be operated exclu-48sively for the benefit of persons or families who are entitled to occu-49pancy by reason of ownership of stock in the corporate owners, such loan50shall not exceed ninety-eight percentum of the value of the property,51after completion of such installation, elimination, or other rehabili-52tation or improvement, as estimated by the agency, unless the agency53makes a written determination that the owner has insufficient resources54to pay for the remaining two per centum of the value of the property,55after completion of such installation, elimination, or other rehabili-56tation or improvement, as estimated by the agency, in which case suchS. 2985--A 8 1loan shall not exceed the value of the property, after completion of2such installation, elimination, or other rehabilitation or improvement,3as estimated by the agency.4(d)] Each such bond and mortgage or note and mortgage shall be repaid 5 over or within a period of [thirty] forty years, provided that such 6 period may be extended as the agency may determine necessary to ensure 7 the continued affordability or economic viability of the multiple dwell- 8 ing, in such manner as may be provided in such bond and mortgage or note 9 and mortgage and contract [but in no case to exceed the probable life of10the multiple dwelling which is hereby determined to be thirty years]. 11 Such bond and mortgage or note and mortgage and the contract in 12 connection with such permanent and temporary loans may contain such 13 other terms and provisions not inconsistent with the provisions of this 14 article as the local legislative body or the agency may deem necessary 15 or desirable to secure repayment of the loan, the interest thereon and 16 other charges in connection therewith and to carry out the purposes and 17 provisions of this article[; notwithstanding the foregoing, a loan made18prior to January first, nineteen hundred seventy-eight may, in the19discretion of the agency, be extended to a term up to forty-five years.20The agency may modify the rate and time of payment of interest on the21original loan and the rate and time of amortization of principal in such22manner as required to secure payment of the loan within the extended23term], including, but not limited to, providing that the lien created by 24 such bond and mortgage or note and mortgage, and, if applicable, any 25 regulatory agreement executed by the owner and the agency or restrictive 26 covenant approved by such agency, may be recorded in an equal or subor- 27 dinate position, or subsequently made equal or subordinate, to a lien 28 recorded by any private lender against such multiple dwelling. 29 [2-c.] 2-b. If a loan pursuant to this article is made to a non-profit 30 company or a housing development fund company which agrees to provide 31 housing accommodations exclusively for persons and families of low 32 income, at least thirty percent of whom are referred to it by the muni- 33 cipality and have prior to their initial occupancy in such accommo- 34 dations resided in emergency shelter facilities operated by or on behalf 35 of the municipality, the agency may provide that the note and mortgage 36 shall automatically be reduced to zero in five equal annual decrements 37 commencing on the tenth year after the initial occupancy date, provided 38 that such accommodations have been owned and operated in a manner 39 consistent with an agreement with the municipality contained in such 40 note and mortgage to provide housing for such persons. 41 4. The agency may [charge the] require the payment of charges by an 42 owner of such multiple dwelling [reasonable fees] in consideration for 43 the financing, regulation, supervision and audit of such loan. Such fees 44 shall be [kept by the municipality in a separate fund to be known as the45housing rehabilitation fund and shall be used to pay for the expenses of46the municipality in administering and carrying out the provisions of47this article] paid into the treasury of the municipality requiring the 48 charges and shall be paid and deposited in the general fund of any such 49 municipality. 50 § 12. Subdivisions 2, 3, 4 and 5 of section 403 of the private housing 51 finance law, subdivision 2, paragraphs a, b and c of subdivision 3 and 52 subdivision 4 as amended by chapter 904 of the laws of 1962, are amended 53 to read as follows: 54 2. [In the event that after any person or family included within the55provisions of paragraph a of subdivision three of section four hundred56one of this article, but not included within the provisions of paragraphS. 2985--A 9 1b of such subdivision three, begins occupancy of any dwelling unit in2any multiple dwelling aided by a loan pursuant to this article, and3during the period while such dwelling unit is subject to a maximum rent4prescribed pursuant to this article, the income of such person or family5increases so as to exceed the applicable maximum prescribed by such6paragraph a by more than fifty per centum, such person shall be subject7to removal from such dwelling with the approval of the agency.83. a. In the event that on the date on which a contract for a loan is9made with respect to a multiple dwelling aided by a loan pursuant to10this article, any person or family occupying a dwelling unit in such11multiple dwelling and included within the provisions of paragraph b of12subdivision three of section four hundred one of this article, has a13probable aggregate annual income, as determined in accordance with the14provisions of paragraph a of such subdivision three, which exceeds the15income limits specified in such paragraph a by more than fifty per cent,16such person or family shall be subject to removal from such dwelling17unit with the approval of the agency upon the expiration of a period of18two years after the date on which such contract is entered into.19b. In the event that at any time within a period of two years after20any such contract is entered into, the income of any such person or21family increases so as to exceed the income limits specified in such22paragraph a by more than fifty per cent, such person or family shall be23subject to removal from such dwelling unit with the approval of the24agency upon the expiration of such period of two years.25c. If, at any time subsequent to the expiration of a period of two26years after any such contract is entered into, and during the period27while the dwelling unit occupied by any such person or family is subject28to a maximum rent prescribed pursuant to this article, the income of29such person or family increases so as to exceed the income limits speci-30fied in such paragraph a by more than fifty per cent, such person or31family shall be subject to removal from such dwelling unit with the32approval of the agency.334.] Any person or family in occupancy[, whether included within the34provisions of paragraph a or paragraph b of subdivision three of section35four hundred one of this article, whose income exceeds the maximum36prescribed by the provisions of such paragraph a with respect to the37time of beginning of occupancy, shall] whose income precludes the inclu- 38 sion of such person or family within the definition provided in para- 39 graph a of subdivision three of section four hundred one of this article 40 may be required to pay a rental surcharge in accordance with a schedule 41 of surcharges to be promulgated by the agency. In determining imposi- 42 tion of any such surcharge, the agency shall consider factors such as 43 the net operating income and debt service coverage ratio of the property 44 aided by a loan pursuant to this article. Rental surcharges collected 45 pursuant to this section shall be paid by the owner to the municipality 46 which has granted such owner tax exemption or tax abatement pursuant to 47 any law authorizing the granting of same, as reimbursement to such muni- 48 cipality therefor. In the event that such tax exemption and tax abate- 49 ment have not been granted, or in the event that a sum equal to the 50 total amount of tax exemption and tax abatement granted to the owner has 51 been paid to the municipality, the excess, if any, of surcharges shall 52 be paid to the municipality in reduction of the loan. 53 [5. Any person or family whose removal is required by any provision of54this article shall be subject to removal by summary proceedings.]S. 2985--A 10 1 § 13. The opening paragraph of subdivision 1 of section 404 of the 2 private housing finance law, as added by chapter 904 of the laws of 3 1962, is amended to read as follows: 4 No such loan shall be made by a municipality to an owner of an exist- 5 ing multiple dwelling unless the owner of such multiple dwelling [and6all persons holding a lien prior to that of the municipality] shall 7 covenant in writing that so long as any part of such loan remains 8 unpaid, any exemption and abatement from taxation on the property 9 resulting from the installations, alterations or improvements made with 10 such loan remains in effect or for a period of at least ten years from 11 the occupancy date, whichever is the later: 12 § 14. Section 450 of the private housing finance law, as amended by 13 chapter 273 of the laws of 1975, is amended to read as follows: 14 § 450. Policy and purposes of article. It is hereby declared that 15 there exists in municipalities in this state a seriously inadequate 16 supply of safe and sanitary dwelling accommodations; that such shortage 17 constitutes an emergency and a grave menace to the health, safety, 18 morals, welfare and comfort of citizens of this state; that existing 19 conditions of deterioration of housing marked by noncompliance with the 20 multiple dwelling law or local housing codes threaten a further decrease 21 in such supply; that rehabilitation and improvement of dwellings to 22 prolong the useful life of such dwellings may be necessary to arrest 23 such conditions of deterioration; that the elimination of such condi- 24 tions by rehabilitation or other improvement cannot readily be provided 25 by the ordinary unaided operation of private enterprise without public 26 aid in the form of low interest loans or grants to owners of such multi- 27 ple dwellings; that such rehabilitation or other improvement of such 28 dwellings to bring them into conformance with the multiple dwelling law 29 and local housing codes is a public use, a public purpose and a city 30 purpose for which public money may be loaned or granted by a munici- 31 pality and for which indebtedness may be contracted by a municipality; 32 that such conditions require the provisions hereinafter enacted, and the 33 necessity in the public interest for the provisions hereinafter enacted 34 is hereby declared as a matter of legislative determination. 35 § 15. Subdivisions 2 and 3 of section 451 of the private housing 36 finance law, subdivision 2 as amended by chapter 705 of the laws of 1976 37 and subdivision 3 as amended by chapter 269 of the laws of 1985, are 38 amended to read as follows: 39 2. "Occupancy by persons of low income." Occupancy by [persons paying40rentals or carrying charges not in excess of the average rentals or41carrying charges prevailing in local projects of municipally-aided42limited-profit housing companies aided under article two of this chap-43ter, the occupancy of which commenced on or after May eighteenth, nine-44teen hundred seventy] "persons of low income" or "families of low 45 income," as such terms are defined in section two of this chapter. 46 3. "Owner." An individual, partnership, corporation or other entity, 47 including a non-profit company, a mutual company, or a housing develop- 48 ment fund company, which holds record or beneficial title in fee simple 49 to the multiple dwelling and the real property upon which it is situate 50 or the lessee thereof under a lease the unexpired term of which shall be 51 not less than the term of the loan to be made under this article. 52 § 16. Subdivision 1 of section 452 of the private housing finance law, 53 as amended by chapter 923 of the laws of 1983, is amended and a new 54 subdivision 1-a is added to read as follows: 55 1. Notwithstanding the provisions of any general, special or local 56 law, a municipality is hereby authorized:S. 2985--A 11 1 (a) to make or contract to make loans to the owners of existing multi- 2 ple dwellings within its territorial limits, subject to the limitations 3 in subdivision two of this section, for the elimination of any substand- 4 ard or insanitary condition or conditions in violation of the multiple 5 dwelling law or local housing code, for the incorporation of climate 6 resiliency improvements or for such replacement and rehabilitation of 7 the heating, plumbing, electrical and related systems or other improve- 8 ments as shall be reasonably necessary to prolong the useful life of 9 such dwellings, and may make temporary loans to such owners in antic- 10 ipation of the permanent municipal loans for such purposes; and 11 (b) to make or contract to make grants to any owner described in 12 paragraph (a) of this subdivision, on the same terms as permitted under 13 such paragraph for a loan. 14 1-a. As used in this article, the term "loan" shall include any grant 15 made by a municipality pursuant to this article, provided, however, that 16 provisions of this article concerning the repayment or forgiveness of, 17 or security for, a loan shall not apply to any grant made pursuant to 18 this article. 19 § 17. Subdivisions 2 and 5 of section 452 of the private housing 20 finance law, subdivision 2 as amended by chapter 408 of the laws of 2009 21 and subdivision 5 as amended by chapter 273 of the laws of 1975, are 22 amended to read as follows: 23 2. Each loan shall be evidenced by a note executed by the owner of the 24 existing multiple dwelling. The supervising agency in its discretion may 25 require one or more of the shareholders of a corporate owner to co-sign 26 such note or to otherwise guarantee or pledge security for the repayment 27 of the loan. [The amount of any such loan shall not exceed the sum of28thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of29eliminating such substandard or insanitary condition or conditions, or30effecting such rehabilitation or improvement, whichever is less.] Each 31 such note shall be repaid within a period [of the probable life of the32existing multiple dwelling which is hereby determined to be thirty33years, or such shorter period as the supervising agency shall determine] 34 of forty years, provided that such period may be extended as the super- 35 vising agency may determine necessary to ensure the continued afforda- 36 bility or economic viability of the existing multiple dwelling. The 37 repayment shall be made in such manner as may be provided in such note 38 and contract, if any, in connection with such loan and may authorize 39 such owner, with the consent of the supervising agency, to prepay the 40 principal of the loan subject to such terms and conditions as therein 41 provided. Such note and contract may contain such other terms and 42 provisions not inconsistent with the provisions of this article as the 43 local legislative body or supervising agency may deem necessary or 44 desirable to secure repayment of the loan, the interest thereon and 45 other charges in connection therewith and to carry out the purposes and 46 provisions of this article, including but not limited to provisions 47 ensuring availability of rents for such repayment and provisions permit- 48 ting the lien created by such note and mortgage, and, if applicable, a 49 regulatory agreement executed by such owner and supervising agency, be 50 recorded in an equal and subordinate position, or subsequently made 51 equal or subordinate, to a lien recorded by any private lender against 52 such multiple dwelling. 53 5. The supervising agency may [charge] require the payment of charges 54 by the owner of such existing multiple dwelling [reasonable fees] in 55 consideration for the financing, regulation, supervision and audit of 56 such loan. Such [fees] charges shall be [kept by the municipality in aS. 2985--A 12 1separate fund to be known as the article VIII-A housing rehabilitation2fund and shall be used to help meet the expenses of the municipality in3administering and carrying out the provisions of this article] paid into 4 the treasury of the municipality requiring the charges and shall be paid 5 and deposited in the general fund of any such municipality. 6 § 18. Section 453 of the private housing finance law, as added by 7 chapter 924 of the laws of 1970, paragraphs (c) and (d) as amended and 8 paragraph (e) of subdivision 1 as added by chapter 273 of the laws of 9 1975, is amended to read as follows: 10 § 453. Conditions precedent to making such loans. [1.] No such loan 11 shall be made by a municipality to an owner of an existing multiple 12 dwelling unless the owner of such multiple dwelling shall covenant in 13 writing that so long as any part of such loan shall remain unpaid or 14 for a period of at least ten years from the date of the loan, whichever 15 is later: 16 [(a)] 1. Each dwelling unit in such multiple dwelling shall be avail- 17 able solely for occupancy by persons of low income; 18 [(b)] 2. No person who lives in such multiple dwelling at the time the 19 loan is made shall be required to move because of the rehabilitation or 20 improvement financed thereby, except that a temporary relocation may be 21 required in connection with such rehabilitation or improvement; 22 [(c)] 3. All persons operating or managing such multiple dwelling will 23 permit the duly authorized officers, employees, agents or inspectors of 24 the municipality to enter in or upon and inspect such multiple dwelling 25 at all reasonable hours; [and26(d)] 4. The municipality by such duly authorized representatives as 27 aforesaid shall have full power to investigate into and order the owner 28 of such multiple dwelling to furnish such reports and information as it 29 may require concerning such rehabilitation or improvement and shall have 30 full power to audit the books of said owner with respect to such 31 matters; and 32 [(e)] 5. The owner will submit to the supervising agency annually a 33 statement of the income and expenses of such multiple dwelling, in such 34 form as shall be approved by such agency. 35 [2. No such loan shall be made by a municipality unless such owner36executed an affidavit that he was unable to obtain financing for such37rehabilitation or improvement because of the neighborhood, the age of38the building, or other factors indicating an inability of the private39sector unaided to cause such rehabilitation or improvement to be made.] 40 § 19. The article heading of article 8-B of the private housing 41 finance law, as added by chapter 786 of the laws of 1987, is amended to 42 read as follows: 43 LOANS TO [OWNER-OCCUPANTS] OWNERS OF ONE TO FOUR UNIT 44 PRIVATE AND MULTIPLE DWELLINGS 45 § 20. Section 470 of the private housing finance law, as amended by 46 chapter 200 of the laws of 1997, is amended to read as follows: 47 § 470. Policy and purposes of article. It is hereby declared and found 48 that there exists in municipalities within the state substandard and 49 unsanitary areas and neighborhoods containing deteriorated [owner-occu-50pied] one to four unit private and multiple dwellings, and that the 51 rehabilitation or preservation of such dwellings is necessary in order 52 to aid in the prevention and elimination of slums and blight in such 53 areas and neighborhoods. 54 It further is found that there exists in such municipalities a seri- 55 ously inadequate supply of safe and sanitary [owner-occupied] one to 56 four unit private and multiple dwellings, particularly for persons ofS. 2985--A 13 1 low and moderate income, that existing non-compliance with local housing 2 codes and with the multiple dwelling law and the multiple residence law 3 threatens to decrease such supply, and that the rehabilitation, preser- 4 vation and improvement of such dwellings is necessary to arrest such 5 conditions of deterioration. 6 It further is found that there exists in such municipalities a seri- 7 ously inadequate supply of dwelling units, particularly for persons of 8 low and moderate income, and that there are many basements and cellars 9 in one to four unit private and multiple dwellings that could be 10 converted into lawful dwelling units. 11 It further is found that the elimination of such conditions by reha- 12 bilitation or other improvements in one to four unit private and multi- 13 ple dwellings, and the conversion of basements and cellars in existing 14 one to four unit private and multiple dwellings into lawful dwelling 15 units, cannot be readily provided without public aid in the form of low 16 interest loans or grants to [low and moderate income owner-occupants] 17 owners of such one to four unit dwellings. 18 The rehabilitation, preservation or other [improvements] improvement 19 of such private and multiple dwellings [owned and occupied by low and20moderate income persons or families,] and the conversion of basements 21 and cellars in such private and multiple dwellings into lawful dwelling 22 units is hereby declared a public purpose and a municipal purpose for 23 which public monies may be loaned or granted. 24 In order, further, to promote the preservation and rehabilitation of 25 such dwellings and the conversion of basements and cellars in such 26 dwellings into lawful dwelling units, it is hereby declared that addi- 27 tional provisions should be made to provide public monies for interest 28 reduction subsidies for private loans made by private investors for such 29 rehabilitation. 30 The necessity in the public interest for the provisions of this arti- 31 cle is hereby declared as a matter of legislative determination. 32 § 21. Section 471 of the private housing finance law, as amended by 33 chapter 200 of the laws of 1997, is amended to read as follows: 34 § 471. Definitions. 1. "Agency" shall mean any agency or instrumental- 35 ity of a municipality that is created by legislation and designated by 36 the chief executive to act on behalf of the municipality with regard to 37 the provisions of this article. 38 1-a. "Basement" shall have the same meaning as provided in subdivision 39 thirty-eight of section four of the multiple dwelling law. 40 2. "Banking organization" shall mean any corporation, association or 41 organization organized under the banking laws of New York state or the 42 United States which is authorized to transact business in this state. 43 2-a. "Cellar" shall have the same meaning as provided in subdivision 44 thirty-seven of section four of the multiple dwelling law. 45 3. "Existing multiple dwelling" shall mean any dwelling classified as 46 a multiple dwelling pursuant to the multiple dwelling law or the multi- 47 ple residence law and in existence on the date upon which an application 48 for a loan pursuant to this article is received by the agency. 49 4. "Existing private dwelling" shall mean any dwelling classified as a 50 private dwelling pursuant to the multiple dwelling law or the multiple 51 residence law and in existence on the date upon which an application for 52 a loan pursuant to this article is received by the agency. 53 5. "Federal grant funds" shall mean any grants received from the 54 federal government for community development activities or for the reha- 55 bilitation or conservation of private or multiple dwellings.S. 2985--A 14 1 6. "Low and moderate income persons" shall mean persons and families 2 who cannot afford to improve their homes by relying upon the ordinary 3 unaided operation of private enterprise. 4 7. "Municipality" shall mean any city, town or village. 5 8. "Owner" shall mean an individual or individuals, a partnership, 6 [or] a corporation or other entity, including but not limited to, a 7 trust, a joint tenancy, tenancy in common or tenancy by the entirety 8 holding record or beneficial title in fee simple to an existing private 9 or multiple dwelling and the real property upon which it is situated, or 10 the lessee thereof under a lease having an unexpired term of at least 11 thirty years. "Owner" shall be deemed to also include a cooperative 12 corporation or a condominium association. 13 9. ["Owner-occupant" shall mean an owner who occupies at least one of14the units in a one to four unit dwelling as his or her principal resi-15dence. In the case of a partnership, joint tenancy, tenancy in common or16tenancy by the entirety, at least one partner or tenant must be an17owner-occupant. In the case of a cooperative or condominium a majority18of the units must be owner-occupied. The term "owner-occupant" shall19include an owner of a vacant one to four unit dwelling who demonstrates20an intention to move into one of the units after the rehabilitation of21the property] Reserved. 22 10. "Private investor" shall mean one or more banking organizations, 23 foundations, public benefit corporations, labor unions, credit unions, 24 employers' associations, veterans' organizations, colleges, universi- 25 ties, educational institutions, child care institutions, hospitals, 26 medical research institutes, insurance companies, trustees or fiduciar- 27 ies, trustees of pension and retirement funds and systems, corporations, 28 partnerships, individuals or other entities or any combination of the 29 foregoing, and shall include the United States of America and any of its 30 agencies and departments. 31 11. "Rehabilitation" shall mean the installation, replacement, or 32 repair of heating, plumbing, electrical and related systems or the elim- 33 ination of conditions dangerous to human life or detrimental to health, 34 including nuisances as defined in local housing or health codes or as 35 defined in section three hundred nine of the multiple dwelling law, or 36 in section three hundred five of the multiple residence law, or other 37 rehabilitation or general property and energy conservation improvements. 38 12. "State grant funds" shall mean any grants received from the state 39 or any public benefit corporation for community development activities 40 or for the rehabilitation or conservation of private or multiple dwell- 41 ings. 42 § 22. Section 472 of the private housing finance law, as added by 43 chapter 786 of the laws of 1987, subdivision 1 as amended by chapter 479 44 of the laws of 2005, subdivision 2 as amended by chapter 408 of the laws 45 of 2009, subdivision 3 as amended by chapter 84 of the laws of 2001, and 46 subdivision 7 as added by chapter 705 of the laws of 1991, is amended to 47 read as follows: 48 § 472. Loans to [owner-occupants] owners. 1. Notwithstanding the 49 provisions of any general, special or local law, a municipality, acting 50 through an agency, is authorized: 51 (a) to make, or contract to make, loans to [low and moderate income52owner-occupants] owners of one to four unit existing private or multiple 53 dwellings within its territorial limits, subject to the limitation of 54 subdivisions two through seven of this section, in such amounts as shall 55 be required for the rehabilitation, improvement or acquisition of such 56 dwellings[,] provided, [however, that such loans shall not exceed sixtyS. 2985--A 15 1thousand dollars per dwelling unit. Such] that any such rehabilitation 2 or improvement may include climate resiliency improvements and the 3 conversion of basements and cellars to lawful dwelling units. Such 4 loans may also be made exclusively for or include the refinancing of the 5 outstanding indebtedness of such dwellings, and the municipality may 6 make temporary loans or advances to such [owner-occupants] owners in 7 anticipation of permanent loans for such purposes; and 8 (b) to make or contract to make grants to any owner described in para- 9 graph (a) of this subdivision, on the same terms as permitted under such 10 paragraph for a loan. 11 1-a. As used in this article, the term "loan" shall include any grant 12 made by a municipality pursuant to this article, provided, however, that 13 provisions of this article concerning the repayment or forgiveness of, 14 or security for, a loan shall not apply to any grant made pursuant to 15 this article. 16 2. Each loan shall be evidenced by a note executed by the [owner-occu-17pant] owner of the existing dwelling. Repayment of each such note shall 18 be within a period of [the probable life of the existing dwelling which19is hereby determined to be thirty years, or such shorter period as the20agency shall determine] forty years, provided that such period may be 21 extended as the agency may determine necessary to ensure the continued 22 affordability or economic viability of the existing dwelling. The 23 repayment shall be made in such manner as may be provided in such note 24 and contract, if any, in connection with such loan, and may authorize 25 such [owner-occupant] owner, with the consent of the agency, to prepay 26 the principal of the loan subject to such terms and conditions as there- 27 in provided. In order to make any such loan affordable to the [owner-oc-28cupant] owner, the agency may provide in such note and contract that all 29 of the outstanding principal of said loan may be self-liquidated over a 30 [fifteen year] period of [owner-occupancy] not less than fifteen years 31 of continuous compliance by the owner with a regulatory agreement or 32 other restrictive covenant with or approved by the agency and upon the 33 satisfaction of any additional conditions specified therein. Such note 34 and contract may contain such other terms and provisions not inconsist- 35 ent with the provisions of this article as the agency may deem necessary 36 or desirable to secure repayment of the loan, the interest thereon, if 37 any, and other charges in connection therewith, and to carry out the 38 purposes and provisions of this article, including, but not limited to, 39 providing that the lien created by the note and mortgage, and, if appli- 40 cable, any regulatory agreement executed by such owner and agency, or 41 restrictive covenant approved by such agency, may be recorded in an 42 equal or subordinate position, or subsequently made equal or subordi- 43 nate, to a lien recorded by any private lender against such existing 44 dwelling. 45 3. The agency in its discretion may require that the [owner-occupant] 46 owner execute, acknowledge and deliver a uniform commercial code financ- 47 ing statement for the real property improvement to be in such form as 48 the agency shall specify and in accordance with the requirements of 49 section 9--502 of the uniform commercial code of the state of New York. 50 Said financing statement shall be filed or recorded without charge in 51 accordance with the provisions of paragraph one of subsection (a) of 52 section 9--501 of the uniform commercial code, and from the date of such 53 filing the municipality shall have a lien against said real property 54 improvement for the amount advanced or so much thereof as remains unpaid 55 together with the interest thereon. Upon payment of all sums advanced by 56 the municipality and interest thereon, and upon demand of the thenS. 2985--A 16 1 record owner of the real property, the agency shall deliver a copy of 2 the financing statement with an endorsement thereon that the lien is 3 satisfied. Upon filing of such copy in the office where the financing 4 statement was filed and upon payment of the proper fee therefor, the 5 lien of such financing statement shall be discharged. 6 4. The agency may require the [owner-occupant] owner to execute a 7 mortgage as security for a loan in lieu of or in addition to a financing 8 statement as provided in subdivision three of this section. Such mort- 9 gage shall contain such terms and provisions not inconsistent with the 10 provisions of this article as the agency shall deem necessary or desira- 11 ble to secure repayment of the loan. 12 5. Loans may be made with respect to a one to four unit private or 13 multiple dwelling encumbered by mortgages, provided no mortgage is in 14 default, except if such default shall be remedied by the proposed reha- 15 bilitation or improvement. 16 6. The agency may [charge] require the [owner-occupant] payment of 17 charges by the owner of such existing private or multiple dwelling 18 [reasonable fees] in consideration for [administration,] the financing, 19 regulation, supervision and audit of such loan. Such charges shall be 20 paid into the treasury of the municipality requiring the charges and 21 shall be paid and deposited in the general fund of any such munici- 22 pality. 23 7. In making a loan under this article, an agency shall have the power 24 to participate in a loan made by any private investor[, provided that25the portion of the loan funded by the agency shall not exceed an amount26equal to seventy-five percent of the total loan.] The agency may enter 27 into an agreement with a private investor to deposit funds with such 28 private investor to cover the agency's participation in loans to 29 [owner-occupants] owners of one to four unit existing private and multi- 30 ple dwellings with such funds advanced by such private investor to 31 [owner-occupants] owners of existing dwellings. The portion of the loan 32 funded by the agency may be equal to or subordinate in lien to the 33 portion of the loan funded by the private investor and the note and 34 contract may contain such terms with respect to interest rate, if any, 35 and time of payment of principal and interest as determined by the agen- 36 cy. The agency may make provision, either in the mortgage or mortgages 37 or by separate agreement, for the performance by the private investor of 38 such 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. In order to make the loan affordable to the [owner-occupant] 44 owner, the agency may provide an interest reduction subsidy pursuant to 45 section four hundred seventy-five of this article, or may provide that 46 all or part of the agency's portion of the outstanding principal of any 47 such participation loan may be self-liquidated over a [fifteen year] 48 period of [owner-occupancy] not less than fifteen years of continuous 49 compliance by the owner with a regulatory agreement or other restrictive 50 covenant with or approved by the agency and upon the satisfaction of any 51 additional conditions specified therein. 52 § 23. Subdivisions 1 and 2 of section 473 of the private housing 53 finance law, as added by chapter 786 of the laws of 1987, are amended to 54 read as follows: 55 1. No such loan shall be made to an [owner-occupant] owner of an 56 existing private or multiple dwelling unless the [owner-occupant] ownerS. 2985--A 17 1 of such private or multiple dwelling shall covenant in writing that so 2 long as any part of such loan shall remain unpaid or any requirement 3 imposed as a condition for making such loan that survives the repayment 4 of such loan, including, but not limited to, in a regulatory agreement 5 executed by such owner and the agency or a restrictive covenant approved 6 by such agency, remains in effect: (i) the [owner-occupant] owner or 7 managing agent or operator of such dwelling shall permit the duly 8 authorized officers, employees, agents or inspectors of the agency to 9 enter in or upon and inspect such private or multiple dwelling at all 10 reasonable hours; (ii) the agency by such duly authorized represen- 11 tatives as aforesaid shall have full power to investigate into and order 12 the [owner-occupant] owner of such dwelling to furnish such reports and 13 information as it may require concerning such rehabilitation or improve- 14 ment and shall have full power to audit the books of said owner with 15 respect to such matters; and (iii) if the property to be rehabilitated 16 is a multiple dwelling, the [owner-occupant] owner will submit to the 17 agency annually a statement of income and expenses of such dwelling, in 18 such form as shall be approved by the agency. 19 2. A municipality shall neither make nor participate in a loan to an 20 [owner-occupant] owner of an existing private or multiple dwelling 21 pursuant to this article unless the agency finds that (i) the area in 22 which such dwelling is situated is a blighted, deteriorated or deteri- 23 orating area or has a blighting influence on the surrounding area, or is 24 in danger of becoming a slum or a blighted area because of the existence 25 of substandard, unsanitary, deteriorating or deteriorated conditions, an 26 aged housing stock, or other factors indicating an inability of the 27 private sector to cause such rehabilitation to be made; (ii) the loan 28 will be used to finance the conversion of a basement or cellar in such 29 private or multiple dwelling to one or more lawful dwelling units and 30 any additional rehabilitation or improvement of such dwelling; or (iii) 31 the owner of such private or multiple dwelling is a person or family of 32 low income. 33 § 24. Subdivision 2 of section 474 of the private housing finance law, 34 as added by chapter 786 of the laws of 1987, is amended to read as 35 follows: 36 2. The agency is authorized to make provision in the note and loan 37 agreement or by separate agreement for the servicing of such loans by a 38 loan servicing company or other qualified entity, as determined by the 39 agency, and such services may include, but not be limited to, the 40 collection of the debt services on such loans and the establishment, 41 administration, and distribution of an escrow account for the payment of 42 the [owner-occupant's] owner's real estate taxes, sewer and water rents 43 and fire insurance. 44 § 25. Section 475 of the private housing finance law, as added by 45 chapter 786 of the laws of 1987, is amended to read as follows: 46 § 475. Interest reduction subsidies. Notwithstanding the provisions of 47 any general, special or local law, a municipality, acting through an 48 agency, is authorized to provide, or contract to provide, interest 49 reduction subsidies for loans made by private investors to [low and50moderate income owner-occupants] owners of one to four unit existing 51 private or multiple dwellings within its territorial limits, if such 52 [owner-occupants] owners would have been eligible under the provisions 53 of this article for a loan made by the municipality pursuant to this 54 article.S. 2985--A 18 1 § 26. Subdivision 1 of section 576-c of the private housing finance 2 law, as amended by section 1 of chapter 254 of the laws of 1998, is 3 amended to read as follows: 4 1. In addition to the powers granted to municipalities pursuant to 5 this article, a municipality, acting by its supervising agency, may make 6 loans for the purposes of acquisition, rehabilitation or construction of 7 dwelling accommodations to a non-profit housing development fund compa- 8 ny, a wholly-owned subsidiary of such company, a partnership the 9 controlling interest of which is held by such company and which has 10 agreed to limit profits or rate of return of investors in accordance 11 with a formula established or approved by the company, or a private 12 developer which has agreed to limit profits or rate of return of inves- 13 tors in accordance with a formula established or approved by the compa- 14 ny, which agrees to provide housing accommodations exclusively for 15 persons and families of low income, at least thirty percent of whom are 16 referred to it by a municipality and have prior to their initial occu- 17 pancy in such accommodations resided in emergency shelter facilities 18 operated by or on behalf of the municipality or who are otherwise in 19 need of emergency shelter as determined by the municipality, providing, 20 however, that in the case of a building acquired by such a company, 21 subsidiary, partnership, or developer the obligation to provide housing 22 accommodations for such persons shall be applicable only to dwelling 23 accommodations which are or become vacant after the date of acquisition. 24 Such loans may be made for such period of time and pursuant to such 25 terms and conditions as may be required by the municipality, including, 26 but not limited to, terms and conditions providing that the lien created 27 by the note and mortgage, and, if applicable, any regulatory agreement 28 executed by the owner and such municipality or restrictive covenant 29 approved by a supervising agency, may be recorded in an equal or subor- 30 dinate position, or subsequently made equal or subordinate, to a lien 31 recorded by any private lender against the dwelling aided by the loan 32 made pursuant to this article, and the supervising agency of such muni- 33 cipality may provide that the amount of the note and mortgage shall 34 automatically be reduced to zero in five equal decrements commencing on 35 the tenth year after the initial occupancy date, provided that, as of 36 the date of such reduction, such accommodations have been and continue 37 to be owned and operated in a manner consistent with an agreement with 38 the municipality contained in such note and mortgage to provide housing 39 for such persons. Notwithstanding such provision as contained in the 40 note and mortgage, the loan shall be reduced to zero only if, prior to 41 or simultaneously with delivery of such note and mortgage, the supervis- 42 ing agency made a written determination that such reduction would be 43 necessary to ensure the continued affordability or economic viability of 44 such housing project. Such written determination shall document the 45 basis upon which the loan was determined to be eligible for evaporation. 46 § 27. Section 576-c of the private housing finance law, as amended by 47 section 2 of chapter 254 of the laws of 1998, is amended to read as 48 follows: 49 § 576-c. Loans to housing development companies by a municipality. In 50 addition to the powers granted to municipalities pursuant to this arti- 51 cle, a municipality, acting by its supervising agency, may make loans 52 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 accordanceS. 2985--A 19 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, as applicable, any regulatory agreement 18 executed by the owner and such municipality, may be recorded in an equal 19 or subordinate position, or subsequently made equal or subordinate, to 20 the lien recorded by any private lender against the dwelling aided by 21 the loan made pursuant to this article, and the supervising agency of 22 such municipality may provide that the amount of the note and mortgage 23 shall automatically be reduced to zero in five equal decrements commenc- 24 ing on the tenth year after the initial occupancy date, provided that, 25 as of the date of such reduction, such accommodations have been and 26 [continues] continue to be owned and operated in a manner consistent 27 with an agreement with the municipality contained in such note and mort- 28 gage to provide housing for such persons. Notwithstanding such 29 provision as contained in the note and mortgage, the loan shall be 30 reduced to zero only if, prior to or simultaneously with delivery of 31 such note and mortgage, the supervising agency made a written determi- 32 nation that such reduction would be necessary to ensure the continued 33 affordability or economic viability of such housing project. Such writ- 34 ten determination shall document the basis upon which the loan was 35 determined to be eligible for evaporation. 36 § 28. The private housing finance law is amended by adding four new 37 sections 611, 612, 613 and 614 to read as follows: 38 § 611. Rent stabilization and regulatory agreements. 1. Notwithstand- 39 ing any other provision of law, including the provisions of, or any 40 regulation promulgated pursuant to, the emergency tenant protection act 41 of nineteen seventy-four or the rent stabilization law of nineteen 42 hundred sixty-nine, the state division of housing and community renewal, 43 when supervising housing accommodations under provisions of law other 44 than the emergency tenant protection act of nineteen seventy-four or the 45 rent stabilization law of nineteen hundred sixty-nine, the New York city 46 department of housing preservation and development, the New York state 47 urban development corporation, the New York state housing finance agen- 48 cy, the New York state housing trust fund, and the New York city housing 49 development corporation, or such other state or municipal agency, poli- 50 tical subdivision, public benefit corporation, or instrumentality as 51 the state division of housing and community renewal shall identify, may, 52 by agreement with an owner of a multiple dwelling, subject any housing 53 accommodation in such multiple dwelling to the emergency tenant 54 protection act of nineteen seventy-four or the rent stabilization law of 55 nineteen hundred sixty-nine, or both, if applicable to the municipality. 56 The requirements of such agreement shall supplement any requirementsS. 2985--A 20 1 imposed on such housing accommodation pursuant to any other provisions 2 of law. 3 2. Any agreement between a state or municipal agency, political subdi- 4 vision, public benefit corporation, or instrumentality described in 5 subdivision one of this section and an owner of a multiple dwelling that 6 contains provisions that are consistent with subdivision one of this 7 section and that is in effect as of the effective date of this section 8 is and will remain valid and enforceable. 9 § 612. Compliance monitoring. 1. Any supervising agency and any corpo- 10 rate governmental agency that constitutes a public benefit corporation 11 created pursuant to this chapter shall have the power to: (a) subpoena, 12 require the attendance of and examine and take testimony under oath of 13 such persons as it deems necessary to monitor, and enforce compliance 14 with, a note, mortgage, other financing agreement, regulatory agreement, 15 deed, land disposition agreement, or restrictive covenant with or 16 approved by such agency or corporation and entered into in connection 17 with an action taken pursuant to this chapter, the general municipal 18 law, the real property tax law, or the New York city zoning resolution; 19 and (b) subpoena and require the production of books, accounts, papers, 20 documents and other evidence related to such monitoring and enforcement. 21 2. Any person who has been issued a subpoena, or any other require- 22 ment to testify or produce books and records, pursuant to subdivision 23 one of this section, shall be required to comply with such subpoena or 24 other requirement within a reasonable period of time established by the 25 supervising agency or public benefit corporation that issued such 26 subpoena. Each day in which a person fails to comply with such subpoena, 27 or with any other such requirement to testify or produce books and 28 records, shall constitute a separate violation of this section. The 29 civil penalty for each such violation shall be not more than two hundred 30 fifty dollars, provided that such penalty shall not apply to any period 31 during which such subpoena or other requirement to testify or produce 32 books and records is the subject of a pending judicial proceeding 33 commenced prior to the expiration of the period of time established by 34 such supervising agency or public benefit corporation for compliance 35 with such subpoena or other requirement to testify or produce books and 36 records. 37 3. Any such supervising agency or public benefit corporation may 38 promulgate rules and regulations to carry out the provisions of this 39 section. 40 § 613. Charges. A municipality, or a supervising agency thereunder, 41 may require the payment of charges by an owner in consideration for 42 financing, regulation, supervision and audit of loans and grants made 43 pursuant to the provisions of this chapter. Such charges shall be paid 44 into the treasury of the municipality requiring the charges and shall be 45 paid and deposited in the general fund of any such municipality. 46 § 614. Servicing loans. An agency may make provision in a note and 47 loan agreement or by separate agreement for the performance of loan or 48 grant servicing functions, including, but not limited to, functions 49 related to lending or providing a grant for construction, as may gener- 50 ally be performed by an institutional lender. Such agency may act in 51 such capacity or appoint or consent to the appointment of a financial 52 institution or other qualified entity, as determined by such agency, to 53 act in such capacity on behalf of such agency. Such agency may pay a 54 reasonable and customary fee to such financial institution or other 55 qualified entity appointed by such agency, or to whose appointment suchS. 2985--A 21 1 agency provided consent, for the performance of such loan or grant 2 servicing functions. 3 § 29. Section 800 of the private housing finance law, as amended by 4 chapter 456 of the laws of 2003, is amended to read as follows: 5 § 800. Policy and purposes of article. It is hereby declared and found 6 that there exists in municipalities in this state substandard and insan- 7 itary areas and neighborhoods characterized by undermaintained and dete- 8 riorating housing accommodations and under-utilized non-residential 9 buildings and under-utilized vacant land. It is further found that there 10 exists in such municipalities a diminishing and seriously inadequate 11 supply of safe and sanitary dwelling accommodations, particularly for 12 persons of low income; that the loss of housing accommodations is caused 13 by the inability of the ordinary unaided operations of private enter- 14 prise to make loans for rehabilitation or construction purposes or for 15 conversion which accelerates the process of deterioration and abandon- 16 ment, turning active and viable neighborhoods into slums and blighted 17 areas; and that the prevention of deterioration and loss through aban- 18 donment can only be achieved by the elimination of conditions which are 19 unsafe or detrimental to health, the replacement of antiquated heating, 20 plumbing, and electrical systems and, where necessary, the overall reha- 21 bilitation of certain housing accommodations, the construction of new 22 housing accommodations on vacant land and the conversion of under-uti- 23 lized non-residential property to residential use, and that the unavail- 24 ability of funds for the conversion of under-utilized property to resi- 25 dential use, for the preservation and rehabilitation of housing 26 accommodations and for the construction of new housing accommodations on 27 vacant land constitutes a threat to the health, safety and well-being of 28 the persons who occupy them and denies to others the possibility of 29 living in safe and sanitary housing accommodations. 30 In order to promote the preservation and rehabilitation of such hous- 31 ing accommodations, the creation of new housing accommodations by the 32 conversion of under-utilized non-residential property into multiple 33 dwellings and the construction of new housing accommodations on vacant 34 land in such areas and to encourage the investment of private capital in 35 such areas, provision should be made for a municipality to attract 36 private investment for such purposes by utilizing funds, which are 37 available from the federal government through specific or discretionary 38 grants, or are available from other financing sources, for joint partic- 39 ipation loans with private investors, or loans or grants by the munici- 40 pality, to effect the required construction, rehabilitation or conver- 41 sion. 42 The necessity in the public interest for the provisions hereinafter 43 enacted is hereby declared as a matter of legislative determination. 44 § 30. Subdivision 5 of section 801 of the private housing finance law, 45 as amended by chapter 456 of the laws of 2003, is amended to read as 46 follows: 47 5. "Owner" shall mean an individual, partnership, corporation or other 48 entity, including a non-profit company, a mutual company, or a housing 49 development fund company, which holds record or beneficial title in fee 50 simple to the existing multiple dwelling to be rehabilitated or the 51 non-residential property to be converted into a multiple dwelling and 52 the real property upon which it is situate or to vacant land upon which 53 the new multiple dwelling is to be constructed, or is the lessee of any 54 such real property having an unexpired term of at least thirty years. 55 § 31. Section 801 of the private housing finance law is amended by 56 adding a new subdivision 5-a to read as follows:S. 2985--A 22 1 5-a. "Participation loan" and the municipality's "participation" in, 2 "portion" of, or "investment" in a loan, or words of similar meaning, 3 shall mean any loan or grant made by the municipality or the New York 4 city housing development corporation pursuant to this article either 5 with or without a private investor, provided, however, that provisions 6 of this article concerning the repayment or forgiveness of, or security 7 for, a loan shall not apply to any grant made pursuant to this article. 8 § 32. Subdivision 6 of section 801 of the private housing finance law, 9 as amended by chapter 456 of the laws of 2003, is amended to read as 10 follows: 11 6. "Private investor" shall mean one or more banking organizations, 12 foundations, labor unions, credit unions, employers' associations, 13 veterans' organizations, colleges, universities, educational insti- 14 tutions, child care institutions, hospitals, medical research insti- 15 tutes, insurance companies, trustees or fiduciaries, trustees of pension 16 and retirement funds and systems, corporations, partnerships, individ- 17 uals or other entities or any combination of the foregoing, and shall 18 include the United States of America and the state of New York and any 19 [of its agencies acting as a lender under the loan program pursuant to20section three hundred twelve of the housing act of nineteen hundred21sixty-four and any amendments thereto or any similar program] agency, 22 office or public benefit corporation thereof. As used in this subdivi- 23 sion, the terms "trustees" and "fiduciaries" shall include any fiduciary 24 or fiduciaries holding funds for investment, and the term "banking 25 organizations" shall have the same meaning as in subdivision eleven of 26 section two of the banking law. 27 § 33. Subdivisions 1, 3 and 4 of section 802 of the private housing 28 finance law, subdivisions 1 and 3 as amended by chapter 456 of the laws 29 of 2003 and subdivision 4 as added by chapter 822 of the laws of 1976, 30 are amended to read as follows: 31 1. (a) Notwithstanding the provisions of any general, special or local 32 law, one or more private investors and a municipality, acting through 33 its agency, shall have the power to participate and invest in making 34 loans to the owners of existing multiple dwellings or to the owners of 35 non-residential property or to the owners of vacant land subject to the 36 limitations of subdivisions two through seven of this section, in such 37 amounts as shall be required for (i) the rehabilitation of such existing 38 multiple dwellings or for the conversion of such non-residential proper- 39 ty or for the construction of [a] new multiple [dwelling] dwellings on 40 such vacant land, provided that such rehabilitation, conversion or 41 construction may include climate resiliency improvements, and if any 42 such owner acquires the existing multiple dwelling or the non-residen- 43 tial property or the vacant land for the purpose of such rehabilitation, 44 conversion or construction or owns the existing multiple dwelling or the 45 non-residential property or the vacant land subject to an outstanding 46 indebtedness, such loans may be made exclusively for or may include such 47 amounts as may be required for the cost of such acquisition or for the 48 refinancing of such outstanding indebtedness, (ii) providing site 49 improvements located on the property on which such existing multiple 50 dwellings are located or on such non-residential property or vacant land 51 or in a public right-of-way, incidental or appurtenant to such rehabili- 52 tation, conversion or construction, including, but not limited to, water 53 and sewer facilities, sidewalks, landscaping, parks and open space, 54 social, recreational, communal and other non-residential facilities and 55 the outfitting thereof, the curing of problems caused by abnormal site 56 conditions, excavation and construction of footings and foundations andS. 2985--A 23 1 other improvements associated with the provision of infrastructure for 2 housing accommodations, or (iii) providing for other costs of developing 3 housing accommodations, and such private investors and a municipality 4 may jointly participate or invest in the making of temporary loans or 5 advances to such owners in anticipation of the permanent participation 6 loans for such purposes. 7 (b) Notwithstanding the provisions of any general, special or local 8 law, and in addition to the power to make or contract to make partic- 9 ipation loans granted by paragraph (a) of this subdivision, the munici- 10 pality, acting through its agency, and the New York city housing devel- 11 opment corporation shall each have the power to make or contract to make 12 loans or grants to any owner described in paragraph (a) of this subdivi- 13 sion without the participation of a private investor, on the same terms 14 as permitted under such paragraph for a participation loan. 15 3. [(a)] Each participation loan shall be secured by a bond or note 16 and single participating mortgage or by separate bonds or notes and 17 mortgages upon the existing multiple dwelling or the non-residential 18 property and the land upon which it is situated or, in the case of the 19 construction of a new multiple dwelling, upon the vacant land and the 20 multiple dwelling to be constructed, or, in the case of a multiple 21 dwelling held in the condominium form of ownership, a note and mortgage 22 upon the condominium units rehabilitated with such participation loan, 23 provided that a participation loan to an owner who is a lessee shall be 24 secured by a leasehold interest in such property, and provided, further, 25 that each such loan shall be made upon such terms and conditions as may 26 be approved by the agency, including but not limited to, provisions that 27 [(i)] (a) priority may be given to the payment of the principal of and 28 interest on that portion of the mortgage indebtedness attributable to 29 participation in the loan by one or more private investors, [(ii)] (b) 30 the interest of the municipality created as a result of making such a 31 mortgage loan may be subordinated to the interest that one or more of 32 such private investors may have upon such participation, [(iii)] (c) the 33 interest of each upon such participation need not be of equal priority 34 as to lien nor be equal as to interest rate, time or rate of amorti- 35 zation of principal or time of payment of interest, or otherwise, [(iv)] 36 (d) the bond or note and mortgage may provide that the municipality's 37 portion of a participation loan made to an owner shall be reduced to 38 zero commencing in the fifteenth year after the execution of the bond or 39 note and mortgage, provided that, as of the date of any such reduction, 40 such multiple dwelling has been and continues to be owned and operated 41 in a manner consistent with a regulatory agreement with the munici- 42 pality. Notwithstanding such provision as contained in the bond or note 43 and mortgage, the municipality's portion of the loan shall be reduced to 44 zero only if, prior to or simultaneously with delivery of such bond or 45 note and mortgage, the agency made a written determination that such 46 reduction would be necessary to ensure the continued affordability or 47 economic viability of the multiple dwelling. Such written determination 48 shall document the basis upon which the loan was determined to be eligi- 49 ble for evaporation. 50 [(b) The aggregate amount of each such participation loan shall not51exceed the cost of the rehabilitation, conversion or construction, plus52the costs of any or all undertakings necessary for the planning, financ-53ing, acquisition, satisfaction of tax liens and other municipal liens54and encumbrances, construction, equipment and development in connection55therewith, provided that, if any portion of such loan is used for the56cost of acquisition or for refinancing, the amount of a municipality'sS. 2985--A 24 1portion of such loan shall not exceed one and one-half times the cost of2rehabilitation, conversion or construction.3(c) The amount of any such loan, together with the amount of all prior4liens and encumbrances, shall not exceed, except in the case of a loan5made to a non-profit company, a mutual company, or a housing development6fund company, ninety per centum of value unless the agency makes a writ-7ten determination that the owner has insufficient resources to pay for8the remaining ten per centum of value, in which case such loan shall not9exceed ninety-five per centum of value. The amount of any such loan,10together with the amount of all prior liens and encumbrances, made to a11non-profit company, a mutual company, or a housing development fund12company shall not exceed value, provided that when after completion of13such rehabilitation, conversion or construction, such multiple dwelling14is, or is to be operated, exclusively for the benefit of persons and15families who are entitled to occupancy by reason of ownership of stock16in the corporate owners, such loan shall not exceed ninety-eight per17centum of value unless the agency makes a written determination that the18owner has insufficient resources to pay for the remaining two per centum19of value, in which case such loan shall not exceed value.] 20 4. Each such bond or note and mortgage or bonds or notes and mortgages 21 shall be repaid over or within a period of [thirty] forty years, 22 provided that such period may be extended as the agency may determine 23 necessary to ensure the continued affordability or economic viability of 24 the multiple dwelling, in such manner as may be provided in such bond or 25 note and mortgage or bonds or notes and mortgages [but in no case shall26the term of such loan exceed the probable life of the multiple dwelling27which is hereby determined to be thirty years]. Such bond or note and 28 mortgage or bonds or notes and mortgages and any contract in connection 29 with such permanent and temporary loans may contain such other terms and 30 provisions not inconsistent with the provisions of this article as the 31 local legislative body or the agency may deem necessary or desirable to 32 secure repayment of the loan, the interest thereon and other charges in 33 connection therewith and to carry out the purposes and provisions of 34 this article. 35 § 34. Subdivisions 2, 3 and 6 of section 1151 of the private housing 36 finance law, subdivision 2 as amended by chapter 567 of the laws of 1993 37 and subdivisions 3 and 6 as added by chapter 639 of the laws of 1989, 38 are amended to read as follows: 39 2. "Eligible project" shall mean a project intended to construct new 40 housing accommodations on an eligible site by new construction or 41 substantial rehabilitation, provided that such new construction or 42 substantial rehabilitation may include climate resiliency improvements. 43 An eligible project shall serve the needs of persons of low income, 44 including privately-owned one to four family dwellings, condominiums and 45 cooperatives, and rental projects. 46 3. ["Development costs" shall mean the reasonable and necessary costs47for planning, financing, acquisition of land or buildings and48construction of new buildings or the reconstruction, rehabilitation,49repair or remodeling of existing buildings and the costs of necessary50site improvements] "Participation loan" and the city's "participation" 51 in, "portion" of, or "investment" in a loan, or words of similar mean- 52 ing, shall mean any loan or grant made by the agency pursuant to this 53 article either with or without a private lender, provided, however, that 54 provisions of this article concerning the repayment or forgiveness of, 55 or security for, a loan shall not apply to any grant.S. 2985--A 25 1 6. "Loan" shall mean a [first] mortgage loan made by a private lender 2 in participation with the city of New York to a sponsor for the purpose 3 of construction of an eligible project including a loan in which the 4 portion of the loan funded by the agency is represented by a separate 5 note and mortgage. 6 § 35. Section 1152 of the private housing finance law, as added by 7 chapter 639 of the laws of 1989, subdivision 4 as amended and subdivi- 8 sion 13 as added by chapter 241 of the laws of 1998, subdivision 12 as 9 added by chapter 400 of the laws of 1994 and paragraph e of subdivision 10 12 as amended by chapter 118 of the laws of 2003, is amended to read as 11 follows: 12 § 1152. Affordable housing development loans. 1. (a) Notwithstanding 13 the provisions of any general, special or local law, one or more private 14 lenders and the city of New York, acting through the agency, shall have 15 the power to participate and invest in making loans to sponsors for the 16 construction of eligible projects. Such loans may be made exclusively 17 for or may include such amounts as may be required for site acquisition 18 or the refinancing of eligible projects. Each such participation loan 19 shall be secured by a bond or note and single participating mortgage or 20 by separate bonds or notes and mortgages upon the eligible project. Such 21 bond or note and mortgage or bonds or notes or mortgages may contain 22 such other terms and provisions not inconsistent with the provisions of 23 this article as the agency may deem necessary or desirable, including, 24 but not limited to, terms providing that the lien created by such note 25 and mortgage, and, if applicable, any regulatory agreement executed by 26 the sponsor and such agency or restrictive covenant approved by such 27 agency, may be recorded in an equal or subordinate position, or subse- 28 quently made equal or subordinate, to the lien created by any private 29 lender against such eligible project. 30 (b) Notwithstanding the provisions of any general, special or local 31 law, and in addition to the power to make or contract to make partic- 32 ipation loans granted by paragraph (a) of this subdivision, the city of 33 New York, acting through the agency, shall have the power to make or 34 contract to make loans or grants to any owner described in paragraph (a) 35 of this subdivision without the participation of a private lender, on 36 the same terms as permitted under such paragraph for a participation 37 loan. 38 2. [The portion of such loan funded by the agency shall not exceed an39amount equal to sixty percent of the actual total development cost of an40eligible project.] The agency may enter into an agreement with a private 41 lender to deposit its share of a loan with the private lender to be 42 advanced by the private lender. The portion of the loan funded by the 43 agency may be equal to or subordinate in lien to the portion of the loan 44 funded by the private lender and may contain such terms with respect to 45 interest rate, if any, rate of amortization of principal, if any, and 46 time of payment of interest and principal as determined by the agency. 47 The agency may make provision either in the mortgage or mortgages or by 48 separate agreement for the performance by the private lender of such 49 services as are generally performed by a banking institution which 50 itself holds a mortgage, including, without limitation, construction 51 loan advances, construction supervision, initiation of foreclosure 52 proceedings, procurement of insurance, and all other matters in 53 connection with the financing, supervision, regulation and audit of any 54 such loan to any such eligible project. 55 3. [If a portion of the loan is to be utilized for acquisition of an56eligible site such portion shall in no event exceed fifteen percent ofS. 2985--A 26 1the total amount of such loan or the appraised value of the site, which-2ever is the lesser.34.] If the eligible project is to consist of one to four unit dwelling 4 accommodations or cooperative or condominium units, the agency's share 5 of the loan may be converted after completion of construction into mort- 6 gages on such dwelling accommodations or condominium units or financing 7 statements filed with respect to such cooperative shares, provided such 8 units or such cooperative shares are purchased by persons of [eligible] 9 low income. Such mortgages and any blanket mortgage that the agency 10 retains on any portion of, or on all of, the eligible project may 11 provide that [they] such mortgages and such blanket mortgage will auto- 12 matically be reduced to zero over a period of continuous [owner-occupan-13cy of the housing accommodations assisted by such loan] compliance by 14 the mortgagor with a regulatory agreement or restrictive covenant with 15 or approved by the agency and upon the satisfaction of any additional 16 conditions specified therein. Notwithstanding such provision as 17 contained in such mortgage, the loan shall be reduced to zero only if, 18 prior to or simultaneously with delivery of such mortgage, the agency 19 made a written determination that such reduction would be necessary to 20 ensure the continued affordability or economic viability of the eligible 21 project. Such written determination shall document the basis upon which 22 the loan was determined to be eligible for evaporation. Such period of 23 continuous [owner-occupancy] compliance with such regulatory agreement 24 or restrictive covenant shall not be less than fifteen years. 25 [5.] 4. If the eligible project is to consist of one to four unit 26 dwelling accommodations or cooperative or condominium units, the agency 27 shall require that the dwelling units be offered only to bona fide 28 purchasers who intend to occupy a unit as their principal place of resi- 29 dence; provided, however, that in the case of two to four unit dwelling 30 accommodations the bona fide purchaser may occupy only a single unit as 31 a principal place of residence. If the purchaser ceases to occupy the 32 unit as a principal place of residence, the agency may provide for 33 recapture of all or a portion of the agency's share of the loan. 34 [6.] 5. If the eligible project is a rental project, the agency's 35 share of the loan may be converted after completion of construction into 36 a [non-interest bearing, non-amortizing thirty year loan] permanent loan 37 with a term of forty years, provided that such period may be extended as 38 the agency may determine is necessary to ensure the continued afforda- 39 bility or economic viability of the eligible project, payable [at the40end of its term, provided that such loan shall be also payable out of41profits upon any sale or refinancing of the project prior to the end of42such thirty year period] in such manner as may be provided in the note 43 and any mortgage in connection with such loan. Such note and mortgage 44 may contain such terms and conditions as the agency may deem necessary 45 or desirable to effectuate the purposes and provisions of this article. 46 The sponsor or any subsequent owner or owners of such a project shall 47 agree to rent such units only to persons of [eligible] low income for 48 such [thirty year] period [and shall agree that all] as the agency may 49 determine. All such units shall be subject to the emergency tenant 50 protection act of nineteen seventy-four and the rent stabilization law 51 of nineteen hundred sixty-nine, as amended [for a period of thirty years52after initial occupancy], unless converted to a cooperative or condomin- 53 ium pursuant to subdivision [eight] seven of this section. [At the end54of such period each unit shall continue to be subject to such law there-55after until the first vacancy occurs at which time the unit shall beS. 2985--A 27 1decontrolled.] Initial rentals for all rental units shall be set by the 2 agency. 3 [7.] 6. If the eligible project is a rental project annual profits 4 shall be limited to an amount set by the agency for as long as the loan 5 is outstanding. Excess profits shall be used to establish project 6 reserves, provide capital improvements or reduce the principal amount of 7 the agency's loan, as determined by the agency. 8 [8.] 7. If the eligible project is a rental project, no conversion to 9 a cooperative or condominium shall be permitted for a period of twenty 10 years after initial occupancy, and unless (i) the agency's share of the 11 loan is prepaid upon such conversion, (ii) the conversion shall be done 12 pursuant to section three hundred fifty-two-eeee of the general business 13 law as a non-eviction plan, and (iii) apartments occupied by non-pur- 14 chasing tenants continue to be subject to the rent stabilization law of 15 nineteen hundred sixty-nine as amended, until the occurrence of a vacan- 16 cy. 17 [9.] 8. A loan made pursuant to this article shall be exempt from the 18 mortgage recording taxes imposed by article eleven of the tax law. 19 [10.] 9. Notwithstanding the provisions of any general, special or 20 local law or charter, the agency shall have power, without soliciting 21 competing bids, to contract with any sponsor or to make provision in a 22 loan for the construction or reconstruction of any site improvements 23 located in the public right-of-way or on the eligible site which are 24 necessary for the development of an eligible project. Such site improve- 25 ments may include, but shall not be limited to, streets, sidewalks, 26 landscaping, parks and open space, social, recreational, communal and 27 other non-residential facilities and the outfitting thereof, lighting 28 fixtures, and water and sewer lines, incidental or appurtenant to the 29 construction of such eligible projects. 30 [11.] 10. No loan shall be made pursuant to the provisions of this 31 article unless the agency finds that: (a) the construction of the eligi- 32 ble project does not directly displace current low and moderate income 33 residents of the eligible site; (b) the eligible project leverages 34 private and other public investment, if any, so as to reduce the amount 35 of assistance provided pursuant to this article to the minimal amount 36 which is necessary for construction of the eligible project; (c) the 37 eligible project will be built by a private developer/builder who has 38 agreed to limit its profit in accordance with a formula satisfactory to 39 the agency; (d) the eligible project will provide assistance to an area 40 which is blighted or deteriorated or has a blighting influence on the 41 surrounding area, or is in danger of becoming a slum or a blighted area 42 because of neighborhood conditions indicating an inability or unwilling- 43 ness of the private sector to cause the type of construction for which a 44 loan is to be provided; and (e) the eligible project will make home 45 ownership or rental housing affordable to persons who cannot presently 46 afford the housing available based upon the ordinary unaided operation 47 of private enterprise. 48 [12.] 11. a. The agency may make non-interest bearing advances to 49 sponsors to defray the pre-development costs of eligible projects in 50 accordance with the provisions of this chapter. 51 b. No such advances shall be made unless the agency finds that: (i) 52 the sponsor proposes to finance the eligible project in whole or in part 53 by a loan granted pursuant to this article or that the project, if 54 otherwise financed, will provide housing for persons or families of low 55 income, and that such project is otherwise consistent with the purposes 56 of this article; (ii) the project site is suitable, there is a need forS. 2985--A 28 1 the housing type proposed in the area to be served and the project is 2 feasible; and (iii) it is reasonable to anticipate that financing will 3 be obtained and the agency makes a finding to that effect. 4 c. No such advances may be made to a sponsor unless such sponsor 5 enters into an agreement with the agency which provides that such spon- 6 sor shall be regulated with respect to rents, profits, dividends and 7 disposition of its property or franchise, in accordance with the 8 provisions of this article. 9 d. An advance granted pursuant to this section shall be used only to 10 defray the pre-development costs of eligible projects. For purposes of 11 this subdivision, the term pre-development costs shall include, but 12 shall not be limited to: the reasonable and necessary costs for plan- 13 ning, site preparation, developing architectural drawings and conducting 14 engineering and environmental studies, but shall not include acquisition 15 of land or buildings, drainage and landscaping of vacant land, 16 construction of new buildings or the reconstruction or rehabilitation of 17 existing buildings. 18 e. Each such advance shall be repaid in full to the agency by the 19 sponsor. Such repayment shall be made upon receipt by the sponsor or its 20 successor in interest of the proceeds of its mortgage or construction 21 loan for the eligible project, unless the agency extends the period for 22 the repayment of such advances. In no event shall the time of repayment 23 be extended to a date later than the date of final advance of funds 24 pursuant to such mortgage or construction loan. Notwithstanding this 25 paragraph, the agency may reduce such advance to zero over a period of 26 continued compliance with the agency's agreement with the sponsor pursu- 27 ant to paragraph c of this subdivision if the agency has made a written 28 determination that such reduction would be necessary to ensure the 29 continued affordability or economic viability of the eligible project. 30 Such written determination shall document the basis upon which the agen- 31 cy's non-interest bearing advance was determined eligible for evapo- 32 ration. 33 f. If the agency, in its discretion, determines at any time that mort- 34 gage or construction financing for the eligible project may not be 35 obtained, then all advances made to the sponsor pursuant to this subdi- 36 vision shall become immediately due and payable upon the demand of the 37 agency. 38 [13.] 12. If the eligible project is a rental project, the bond or 39 note and mortgage or bonds or notes or mortgages issued by the sponsor 40 of any eligible project to secure a participation loan may provide that 41 the city's portion of such loan shall be reduced to zero commencing on 42 the fifteenth year after the execution of such bond or note and mortgage 43 or bonds or notes or mortgages, provided that, as of the date of any 44 such reduction, the eligible project has been and continues to be owned 45 and operated in a manner consistent with a regulatory agreement with the 46 city. Notwithstanding such provision as contained in the bond or note 47 and mortgage or bonds or notes or mortgages, the loan shall be reduced 48 to zero only if, prior to or simultaneously with delivery of such bond 49 or note and mortgage or bonds or notes or mortgages, the agency made a 50 written determination that such reduction would be necessary to ensure 51 the continued affordability or economic viability of the eligible 52 project. Such written determination shall document the basis upon which 53 the loan was determined to be eligible for evaporation. 54 § 36. Paragraph (g) of subdivision 6 of section 1802 of the charter of 55 the city of New York, as amended by vote of the people of the city ofS. 2985--A 29 1 New York at the general election held in November of 1989, is amended to 2 read as follows: 3 (g) [impose and collect] require the payment of charges [and fees] in 4 consideration for the financing, regulation, supervision and audit of 5 municipally-aided projects and loan programs administered by the commis- 6 sioner, which charges [and fees] shall be [set aside in a special7account for administrative expenses of the department] paid into the 8 treasury of the city and shall be paid and deposited in the general fund 9 of the city; 10 § 37. This act shall take effect immediately, provided that: (i) the 11 amendments to subdivision 1 of section 696-a of the general municipal 12 law made by section two of this act shall be subject to the expiration 13 and reversion of such subdivision pursuant to section 2 of chapter 613 14 of the laws of 1996, as amended, when upon such date the provisions of 15 section three of this act shall take effect; and (ii) the amendments to 16 subdivision 1 of section 576-c of the private housing finance law made 17 by section twenty-six of this act shall be subject to the expiration and 18 reversion of such subdivision pursuant to section 2 of chapter 84 of the 19 laws of 1993, as amended, when upon such date the provisions of section 20 twenty-seven of this act shall take effect.
