2023 New York Laws › PVH - Private Housing Finance › Article 11 - Housing Development Fund Companies › 576-C - Loans to Housing Development Companies by a Municipality.

* §  576-c.  Loans to housing development companies by a municipality.
  1. In addition to the powers granted to municipalities pursuant to  this
  article,  a  municipality,  acting  by  its supervising agency, may make
  loans for the purposes of acquisition, rehabilitation or construction of
  dwelling  accommodations  to  a  non-profit  housing  development   fund
  company,  a  wholly-owned  subsidiary of such company, a partnership the
  controlling interest of which is held by  such  company  and  which  has
  agreed  to  limit  profits  or rate of return of investors in accordance
  with a formula established or approved by  the  company,  or  a  private
  developer  which  has  agreed  to  limit  profits  or  rate of return of
  investors in accordance with a formula established or  approved  by  the
  company,  which agrees to provide housing accommodations exclusively for
  persons and families of low income, at least thirty percent of whom  are
  referred  to  it  by  a  municipality  and  have  prior to their initial
  occupancy in such accommodations resided in emergency shelter facilities
  operated by or on behalf of the municipality or  who  are  otherwise  in
  need  of emergency shelter as determined by the municipality, providing,
  however, that in the case of a building  acquired  by  such  a  company,
  subsidiary,  partnership, or developer the obligation to provide housing
  accommodations for such persons shall be  applicable  only  to  dwelling
  accommodations which are or become vacant after the date of acquisition.
  Such  loans  may  be  made  for such period of time and pursuant to such
  terms and conditions as may be required by the municipality,  including,
  but not limited to, terms and conditions providing that the lien created
  by  the  note and mortgage, and, if applicable, any regulatory agreement
  executed by the owner and  such  municipality  or  restrictive  covenant
  approved  by  a  supervising  agency,  may  be  recorded  in an equal or
  subordinate position, or subsequently made equal or  subordinate,  to  a
  lien  recorded  by  any private lender against the dwelling aided by the
  loan made pursuant to this article, and the supervising agency  of  such
  municipality  may provide that the amount of the note and mortgage shall
  automatically be reduced to zero in five equal decrements commencing  on
  the  tenth  year  after the initial occupancy date, provided that, as of
  the date of such reduction, such accommodations have been  and  continue
  to  be  owned and operated in a manner consistent with an agreement with
  the municipality contained in such note and mortgage to provide  housing
  for  such  persons.  Notwithstanding  such provision as contained in the
  note and mortgage, the loan shall be reduced to zero only if,  prior  to
  or   simultaneously  with  delivery  of  such  note  and  mortgage,  the
  supervising agency made a  written  determination  that  such  reduction
  would  be  necessary  to  ensure the continued affordability or economic
  viability of such housing  project.  Such  written  determination  shall
  document the basis upon which the loan was determined to be eligible for
  evaporation.
2.  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  any  building  used  primarily  for
  residential  purposes,  in  a  jurisdiction in which rents are regulated
  pursuant to any of the above laws and which is aided by a loan  pursuant
  to  this  section made by the municipality, the supervising agency shall
  establish the initial rent for each  rental  dwelling  unit  within  the
  building.   All   dwelling  units  within  the  building  subsequent  to
  establishment of initial  rents  by  the  supervising  agency  shall  be
  subject  to  either  the  rent  stabilization  law  of  nineteen hundred
  sixty-nine  or  the  emergency  tenant  protection   act   of   nineteen
  seventy-four,  or  both,  if  applicable to the locality. The tenants in

  occupancy of such a dwelling unit regulated pursuant to any of the above
  laws shall be offered a choice of a one or two year lease at the initial
  rents established by the supervising 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 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  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.
3.  The  supervising  agency shall use its best efforts to ensure that
  activities carried out pursuant to this article are structured so as  to
  minimize  the  likelihood  of  any  involuntary economic displacement of
  tenants who reside in multiple dwellings which are the subject  of  such
  activities. However, if temporary physical displacement is required as a
  direct result of rehabilitation work which is performed in such multiple
  dwelling  receiving  a loan pursuant to this article, suitable temporary
  relocation arrangements shall be provided.
* NB Effective until July 1, 2024
* § 576-c. Loans to housing development companies by  a  municipality.
  In  addition  to  the  powers granted to municipalities pursuant to this
  article, a municipality, acting by  its  supervising  agency,  may  make
  loans for the purposes of acquisition, rehabilitation or construction of
  dwelling   accommodations  to  a  non-profit  housing  development  fund
  company, a wholly-owned subsidiary of such company,  a  partnership  the
  controlling  interest  of  which  is  held by such company and which has
  agreed to limit profits or rate of return  of  investors  in  accordance
  with  a  formula  established  or  approved by the company, or a private
  developer which has agreed  to  limit  profits  or  rate  of  return  of
  investors  in  accordance  with a formula established or approved by the
  company, which agrees to provide housing accommodations exclusively  for
  persons  and families of low income, at least thirty percent of whom are
  referred to it by  a  municipality  and  have  prior  to  their  initial
  occupancy in such accommodations resided in emergency shelter facilities
  operated  by  or  on  behalf of the municipality or who are otherwise in
  need of emergency shelter as determined by the municipality,  providing,
  however,  that  in  the  case  of a building acquired by such a company,
  subsidiary, partnership, or developer the obligation to provide  housing
  accommodations  for  such  persons  shall be applicable only to dwelling
  accommodations which are or become vacant after the date of acquisition.
  Such loans may be made for such period of  time  and  pursuant  to  such
  terms  and conditions as may be required by the municipality, including,
  but not limited to, terms and conditions providing that the lien created
  by the note and mortgage, and, as applicable, any  regulatory  agreement
  executed by the owner and such municipality, may be recorded in an equal
  or  subordinate  position, or subsequently made equal or subordinate, to
  the lien recorded by any private lender against the  dwelling  aided  by
  the  loan  made  pursuant to this article, and the supervising agency of
  such municipality may provide that the amount of the note  and  mortgage
  shall  automatically  be  reduced  to  zero  in  five  equal  decrements
  commencing on the tenth year after the initial occupancy date,  provided
  that,  as  of  the date of such reduction, such accommodations have been
  and continue to be owned and operated in a  manner  consistent  with  an
  agreement  with  the municipality contained in such note and mortgage to

  provide housing for such  persons.  Notwithstanding  such  provision  as
  contained  in  the  note and mortgage, the loan shall be reduced to zero
  only if, prior to or simultaneously  with  delivery  of  such  note  and
  mortgage,  the supervising agency made a written determination that such
  reduction would be necessary to ensure the  continued  affordability  or
  economic  viability  of such housing project. Such written determination
  shall document the basis upon  which  the  loan  was  determined  to  be
  eligible for evaporation.
* NB Effective July 1, 2024