2023 New York Laws › PVH - Private Housing Finance › Article 8-A - Small Loans to Owners of Multiple Dwellings to Remove Substandard or Insanitary Conditions › 452 - Loans to Owners.

§  452.  Loans  to  owners.   1. Notwithstanding the provisions of any
general, special or local law, a municipality is hereby authorized:
(a) to make or contract to  make  loans  to  the  owners  of  existing
multiple  dwellings  within  its  territorial  limits,  subject  to  the
limitations in subdivision two of this section, for the  elimination  of
any  substandard  or  insanitary condition or conditions in violation of
the multiple dwelling law or local housing code, for  the  incorporation
of   climate   resiliency  improvements  or  for  such  replacement  and
rehabilitation of the heating, plumbing, electrical and related  systems
or  other  improvements  as shall be reasonably necessary to prolong the
useful life of such dwellings, and may  make  temporary  loans  to  such
owners  in  anticipation  of  the  permanent  municipal  loans  for such
purposes; and
(b) to make or contract to make  grants  to  any  owner  described  in
paragraph  (a) of this subdivision, on the same terms as permitted under
such paragraph for a loan.
1-a. As used in this article, the term "loan" shall include any  grant
made by a municipality pursuant to this article, provided, however, that
provisions  of  this article concerning the repayment or forgiveness of,
or security for, a loan shall not apply to any grant  made  pursuant  to
this article.
2. Each loan shall be evidenced by a note executed by the owner of the
existing multiple dwelling. The supervising agency in its discretion may
require  one or more of the shareholders of a corporate owner to co-sign
such note or to otherwise guarantee or pledge security for the repayment
of the loan. Each such note shall be repaid within  a  period  of  forty
years,  provided  that  such  period  may be extended as the supervising
agency may determine necessary to ensure the continued affordability  or
economic  viability  of  the  existing  multiple dwelling. The repayment
shall be made in such manner  as  may  be  provided  in  such  note  and
contract,  if  any,  in connection with such loan and may authorize such
owner, with the  consent  of  the  supervising  agency,  to  prepay  the
principal  of  the  loan subject to such terms and conditions as therein
provided. Such note and  contract  may  contain  such  other  terms  and
provisions  not  inconsistent with the provisions of this article as the
local legislative body or  supervising  agency  may  deem  necessary  or
desirable  to  secure  repayment  of  the loan, the interest thereon and
other charges in connection therewith and to carry out the purposes  and
provisions  of  this  article,  including  but not limited to provisions
ensuring  availability  of  rents  for  such  repayment  and  provisions
permitting  the  lien  created  by  such  note  and  mortgage,  and,  if
applicable,  a  regulatory  agreement  executed  by   such   owner   and
supervising agency, be recorded in an equal and subordinate position, or
subsequently  made  equal  or  subordinate,  to  a  lien recorded by any
private lender against such multiple dwelling.
3. The supervising agency in its discretion may require that the owner
execute a financing statement for real property  improvement  to  be  in
such  form  as  the  agency  shall  specify and to contain the following
information: the name and mailing address of the owner, the  address  of
the  real  property,  a  statement  that  a  loan  has  been made by the
municipality under this article, the amount and duration thereof and the
applicable interest  rate.  Said  financing  statement  shall  be  filed
without  charge  in  the office for recording mortgages of real property
and from the date of such filing the  municipality  shall  have  a  lien
against said real property for the amount advanced or so much thereof as
remains  unpaid  and interest thereon. If a financing statement is filed
as herein provided, the rights and remedies of the municipality and  the
priority  of  its  lien shall be the same as those of a holder of a lien

for the materials furnished or labor performed  in  the  improvement  of
real property pursuant to articles two and three of the lien law, except
that the lien shall be valid for one year after the maturity date of the
final  installment payable under said note and thereafter as provided in
section seventeen of the lien law. Upon payment of all sums advanced  by
the municipality and interest thereon and upon demand of the then record
owner  of  the  real property, the agency shall deliver to him a copy of
the financing statement with an endorsement thereon  that  the  lien  is
satisfied;  upon  filing  of such copy in the office where the financing
statement was filed and upon payment of the  proper  fee  therefor,  the
lien of such financing statement shall be discharged.
4.  The supervising agency may require the owner to execute a mortgage
as security for a loan in lieu of a financing statement as  provided  in
the  foregoing  subsection three. Such mortgage shall contain such terms
and provisions not inconsistent with the provisions of this  article  as
the  supervising  agency  shall  deem  necessary  or desirable to secure
repayment of the loan under this article.
5. The supervising agency may require the payment of  charges  by  the
owner  of  such  existing  multiple  dwelling  in  consideration for the
financing, regulation, supervision and audit of such loan. Such  charges
shall  be  paid  into  the  treasury  of  the municipality requiring the
charges and shall be paid and deposited in the general fund of any  such
municipality.
6.  In  the  case  of  a  loan  made  pursuant  to  this  article, the
supervising agency may pay any liens and charges the priority  of  which
is  superior  to  its mortgage and may pay such other expenses as may be
appropriate to protect its loan or to protect the lien of  the  mortgage
relating  thereto,  provided that such expenditures shall not exceed the
total amount of such loan.
* 7. Notwithstanding the provisions of, or any regulation  promulgated
pursuant to, the emergency housing rent control law, the local emergency
housing  rent  control  act,  the  emergency  tenant  protection  act of
nineteen seventy-four, or any local law enacted pursuant  thereto,  upon
completion  of  the rehabilitation of a multiple dwelling which is aided
by a loan made pursuant to this article, the supervising agency, may  as
an  alternative  to  permissible  rental adjustments under such laws and
regulations, adjust the rent for each rental dwelling  unit  within  the
multiple  dwelling.  The  initial  rental  adjustment,  if  set  by  the
supervising agency, shall  be  established  based  solely  on  the  debt
service  attributable to the loan, provided, that the supervising agency
may establish rental adjustments less than such debt  service,  provided
further  that  the  supervising  agency  may  establish  greater  rental
adjustments for vacant dwelling units than for occupied dwelling  units.
The  supervising  agency  shall  cause  all tenants in occupancy of each
dwelling unit affected by the  provisions  of  this  subdivision  to  be
notified   of  and  have  an  opportunity  to  comment  on  contemplated
rehabilitation. Such notification  shall  advise  such  tenants  of  the
approximate expected rent increase. Such notification and opportunity to
comment  shall be provided before the rehabilitation and again after the
construction is completed and before the  establishment  of  the  rental
adjustment.
* NB Expires July 1, 2024
* 8.  Notwithstanding the provisions of, or any regulation promulgated
pursuant to, the emergency housing rent control law, the local emergency
housing rent  control  act,  the  emergency  tenant  protection  act  of
nineteen  seventy-four,  or any local law enacted pursuant thereto, upon
completion of the rehabilitation of a class B multiple dwelling, class A
multiple dwelling used for single room occupancy purposes, lodging house

or  a  substantially  vacant  building  intended  to   be   used   after
rehabilitation  for single room occupancy purposes and which is aided by
a loan pursuant to this article made by the  municipality  on  or  after
September   first,   nineteen  hundred  eighty-five,  the  agency  shall
establish the initial rent for each  rental  dwelling  unit  within  the
multiple  dwelling.  All  dwelling  units  within  the multiple dwelling
subsequent to establishment of initial rents  by  the  agency  shall  be
subject  to  the  rent stabilization law of nineteen hundred sixty-nine.
The occupant in possession of such a  dwelling  unit  when  it  is  made
subject  to  the  rent  stabilization law of nineteen hundred sixty-nine
shall be offered a choice of a one or two  year  lease  at  the  initial
rents  established by the agency notwithstanding any contrary provisions
of, or regulations adopted pursuant to, the rent  stabilization  law  of
nineteen  hundred  sixty-nine and the emergency tenant protection act of
nineteen seventy-four. The agency shall cause all tenants  in  occupancy
of  each dwelling unit affected by the provisions of this subdivision to
be notified of and have an opportunity to comment  on  the  contemplated
rehabilitation.  Such  notification  shall  advise  such  tenants of the
approximate expected rent increase and the subsequent availability of  a
one  or  two  year  lease.  Such notification and opportunity to comment
shall  be  provided  before  the  rehabilitation  and  again  after  the
construction  is  completed  and before the establishment of the initial
rents.
* NB Expires July 1, 2024
9. The note or note and contract issued  by  the  owner  of  any  such
multiple dwelling to secure such loan may provide that the loan shall be
reduced  to zero commencing on the fifteenth year after the execution of
the note or note and contract, provided that, as of  the  date  of  such
reduction,  the multiple dwelling has been and continues to be owned and
operated in a manner consistent with a  regulatory  agreement  with  the
municipality. Notwithstanding such provision as contained in the note or
note  and  contract, the loan shall be reduced to zero only if, prior to
or simultaneously with delivery of such note or note and  contract,  the
agency  made  a  written  determination  that  such  reduction  would be
necessary to ensure the continued affordability or economic viability of
the multiple dwelling. Such written  determination  shall  document  the
basis upon which the loan was determined to be eligible for evaporation.