NY Priv Hous Fin L § 1152 (2021)
2021 New York Laws PVH - Private Housing Finance Article 22 - Affordable Housing Development Loans 1152 - Affordable Housing Development Loans.

§  1152.  Affordable housing development loans. 1. Notwithstanding the   provisions of any general, special or local law,  one  or  more  private   lenders  and  the city of New York, acting through the agency shall have   the power to participate and invest in making loans to sponsors for  the   construction  of  eligible projects. Such loans may include such amounts   as may be required for site acquisition. Each  such  participation  loan   shall  be secured by a bond or note and single participating mortgage or   by separate bonds or notes and mortgages upon the eligible project. Such   bond or note and mortgage or bonds or notes  or  mortgages  may  contain   such  other terms and provisions not inconsistent with the provisions of   this article as the agency may deem necessary or desirable.2. The portion of such loan funded by the agency shall not  exceed  an   amount equal to sixty percent of the actual total development cost of an   eligible  project. The agency may enter into an agreement with a private   lender to deposit its share of a loan with  the  private  lender  to  be   advanced  by  the  private lender. The portion of the loan funded by the   agency may be equal to or subordinate in lien to the portion of the loan   funded by the private lender and may contain such terms with respect  to   interest  rate,  if  any, rate of amortization of principal, if any, and   time of payment of interest and principal as determined by  the  agency.   The  agency may make provision either in the mortgage or mortgages or by   separate agreement for the performance by the  private  lender  of  such   services  as  are  generally  performed  by  a banking institution which   itself holds a mortgage,  including,  without  limitation,  construction   loan  advances,  construction  supervision,  initiation  of  foreclosure   proceedings,  procurement  of  insurance,  and  all  other  matters   in   connection  with the financing, supervision, regulation and audit of any   such loan to any such eligible project.3. If a portion of the loan is to be utilized for  acquisition  of  an   eligible  site  such portion shall in no event exceed fifteen percent of   the total amount of such loan  or  the  appraised  value  of  the  site,   whichever is the lesser.4.  If the eligible project is to consist of one to four unit dwelling   accommodations or cooperative or condominium units, the  agency's  share   of  the  loan  may  be  converted  after completion of construction into   mortgages on  such  dwelling  accommodations  or  condominium  units  or   financing  statements  filed  with  respect  to such cooperative shares,   provided such units or such cooperative shares are purchased by  persons   of   eligible   income.  Such  mortgages  may  provide  that  they  will   automatically  be  reduced  to  zero  over  a   period   of   continuous   owner-occupancy  of  the  housing  accommodations assisted by such loan.   Notwithstanding such provision as contained in such mortgage,  the  loan   shall  be  reduced  to  zero  only  if,  prior to or simultaneously with   delivery of such mortgage, the agency made a written determination  that   such  reduction would be necessary to ensure the continued affordability   or  economic  viability  of   the   eligible   project.   Such   written   determination   shall  document  the  basis  upon  which  the  loan  was   determined to be eligible for evaporation.  Such  period  of  continuous   owner-occupancy shall not be less than fifteen years.5.  If the eligible project is to consist of one to four unit dwelling   accommodations or cooperative or condominium  units,  the  agency  shall   require  that the dwelling units be offered only to bona fide purchasers   who intend to occupy a unit  as  their  principal  place  of  residence;   provided,  however,  that  in  the  case  of  two  to four unit dwelling   accommodations the bona fide purchaser may occupy only a single unit  as   a  principal  place  of residence. If the purchaser ceases to occupy the   unit as a principal place of  residence,  the  agency  may  provide  for   recapture of all or a portion of the agency's share of the loan. 6.  If the eligible project is a rental project, the agency's share of   the loan may be  converted  after  completion  of  construction  into  a   non-interest bearing, non-amortizing thirty year loan payable at the end   of  its  term,  provided  that  such  loan  shall be also payable out of   profits  upon any sale or refinancing of the project prior to the end of   such thirty year period. The sponsor or any subsequent owner  or  owners   of  such  a  project  shall  agree to rent such units only to persons of   eligible income for such thirty year period and  shall  agree  that  all   units shall be subject to the rent stabilization law of nineteen hundred   sixty-nine,  as  amended  for  a  period  of  thirty years after initial   occupancy, unless converted to a cooperative or condominium pursuant  to   subdivision  eight  of this section. At the end of such period each unit   shall continue to be subject to such  law  thereafter  until  the  first   vacancy  occurs  at  which  time the unit shall be decontrolled. Initial   rentals for all rental units shall be set by the agency.7. If the eligible project is a rental project annual profits shall be   limited to an amount set by the agency  for  as  long  as  the  loan  is   outstanding. Excess profits shall be used to establish project reserves,   provide  capital  improvements  or  reduce  the  principal amount of the   agency's loan, as determined by the agency.8. If the eligible project is a rental project,  no  conversion  to  a   cooperative  or  condominium  shall  be permitted for a period of twenty   years after initial occupancy, and unless (i) the agency's share of  the   loan  is prepaid upon such conversion, (ii) the conversion shall be done   pursuant to section three hundred fifty-two-eeee of the general business   law  as  a  non-eviction  plan,  and  (iii)   apartments   occupied   by   non-purchasing  tenants continue to be subject to the rent stabilization   law of nineteen hundred sixty-nine as amended, until the occurrence of a   vacancy.9. A loan made pursuant to this  article  shall  be  exempt  from  the   mortgage recording taxes imposed by article eleven of the tax law.10.  Notwithstanding  the  provisions of any general, special or local   law  or  charter,  the  agency  shall  have  power,  without  soliciting   competing  bids,  to contract with any sponsor or to make provision in a   loan for the construction or reconstruction  of  any  site  improvements   located   in  the  public  right-of-way  which  are  necessary  for  the   development of an eligible project. Such site improvements may  include,   but  shall not be limited to, streets, sidewalks, lighting fixtures, and   water and sewer lines.11. No loan shall be made pursuant to the provisions of  this  article   unless  the  agency  finds  that:  (a)  the construction of the eligible   project does not directly  displace  current  low  and  moderate  income   residents  of  the  eligible  site;  (b)  the eligible project leverages   private and other public investment, if any, so as to reduce the  amount   of  assistance  provided  pursuant to this article to the minimal amount   which is necessary for construction of the  eligible  project;  (c)  the   eligible  project  will  be built by a private developer/builder who has   agreed to limit its profit in accordance with a formula satisfactory  to   the  agency; (d) the eligible project will provide assistance to an area   which is blighted or deteriorated or has a blighting  influence  on  the   surrounding  area, or is in danger of becoming a slum or a blighted area   because  of  neighborhood  conditions   indicating   an   inability   or   unwillingness  of  the  private sector to cause the type of construction   for which a loan is to be provided; and (e) the  eligible  project  will   make  home  ownership or rental housing affordable to persons who cannot   presently afford the housing available based upon the  ordinary  unaided   operation of private enterprise. 12.  a.  The agency may make non-interest bearing advances to sponsors   to defray the pre-development costs of eligible projects  in  accordance   with the provisions of this chapter.b.  No  such  advances shall be made unless the agency finds that: (i)   the sponsor proposes to finance the eligible project in whole or in part   by a loan granted pursuant to this  article  or  that  the  project,  if   otherwise  financed, will provide housing for persons or families of low   income, and that such project is otherwise consistent with the  purposes   of  this article; (ii) the project site is suitable, there is a need for   the housing type proposed in the area to be served and  the  project  is   feasible;  and  (iii) it is reasonable to anticipate that financing will   be obtained and the agency makes a finding to that effect.c. No such advances may be made  to  a  sponsor  unless  such  sponsor   enters  into  an  agreement  with  the  agency  which provides that such   sponsor shall be regulated with respect to rents, profits, dividends and   disposition of  its  property  or  franchise,  in  accordance  with  the   provisions of this article.d.  An  advance granted pursuant to this section shall be used only to   defray the pre-development costs of eligible projects. For  purposes  of   this  subdivision,  the  term  pre-development  costs shall include, but   shall not  be  limited  to:  the  reasonable  and  necessary  costs  for   planning,   site  preparation,  developing  architectural  drawings  and   conducting engineering and environmental studies, but shall not  include   acquisition  of  land  or  buildings, drainage and landscaping of vacant   land,  construction  of  new  buildings   or   the   reconstruction   or   rehabilitation of existing buildings.e.  Each  such  advance  shall  be repaid in full to the agency by the   sponsor. Such repayment shall be made upon receipt by the sponsor or its   successor in interest of the proceeds of its  mortgage  or  construction   loan  for the eligible project, unless the agency extends the period for   the repayment of such advances. In no event shall the time of  repayment   be  extended  to  a  date  later than the date of final advance of funds   pursuant to such mortgage or  construction  loan.  Notwithstanding  this   paragraph,  the  agency may reduce such advance to zero over a period of   continued compliance  with  the  agency's  agreement  with  the  sponsor   pursuant  to  paragraph  c  of this subdivision if the agency has made a   written determination that such reduction would be necessary  to  ensure   the  continued  affordability  or  economic  viability  of  the eligible   project. Such written determination shall document the basis upon  which   the  agency's  non-interest  bearing advance was determined eligible for   evaporation.f. If the agency, in its  discretion,  determines  at  any  time  that   mortgage  or  construction financing for the eligible project may not be   obtained, then all  advances  made  to  the  sponsor  pursuant  to  this   subdivision  shall become immediately due and payable upon the demand of   the agency.13. If the eligible project is a rental project, the bond or note  and   mortgage  or  bonds  or  notes or mortgages issued by the sponsor of any   eligible project to secure a participation loan  may  provide  that  the   city's  portion  of such loan shall be reduced to zero commencing on the   fifteenth year after the execution of such bond or note and mortgage  or   bonds  or  notes or mortgages, provided that, as of the date of any such   reduction, the eligible project has been and continues to be  owned  and   operated  in  a  manner  consistent with a regulatory agreement with the   city. Notwithstanding such provision as contained in the  bond  or  note   and  mortgage  or bonds or notes or mortgages, the loan shall be reduced   to zero only if, prior to or simultaneously with delivery of  such  bond   or  note  and mortgage or bonds or notes or mortgages, the agency made a    written determination that such reduction would be necessary  to  ensure   the  continued  affordability  or  economic  viability  of  the eligible   project. Such written determination shall document the basis upon  which   the loan was determined to be eligible for evaporation.