2023 New York Laws › PBA - Public Authorities › Article 8 - Miscellaneous Authorities › Title 17 - State of New York Mortgage Agency Act › Part 1 › 2405-F - New York State Community Restoration Fund.

§  2405-f. New York state community restoration fund. (1) Definitions.
For the purposes of this section, the following  terms  shall  have  the
following meanings:
(a)  "fund"  shall  mean the New York state community restoration fund
established pursuant to subdivision two of this section;
(b) "residential home loan" shall mean a  first  or  subordinate  lien
loan,  including  mortgage  loans  purchased by the agency under section
twenty-four hundred five-b of this part, that is secured by a borrower's
interest in: (i) residential real  property,  including  as  defined  in
section   thirteen  hundred  five  of  the  real  property  actions  and
proceedings law, and any improvements  or  structures  thereon;  (ii)  a
share or shares of a cooperative corporation that entitles a borrower to
a  housing  unit;  or  (iii)  a  residential structure that is part of a
condominium  development.  Residential  home  loan  shall  also  include
interest,  taxes, homeownership associations fees, carrying charges, and
other liens encumbering the residence;
(c) "vacant and abandoned" residential real property  shall  mean  (i)
residential  real  property, as defined in section thirteen hundred five
of the real property actions and proceedings law, where the property  is
not  occupied by the tenant, as that term is defined in section thirteen
hundred  five  of  the  real  property  actions  and  proceedings   law,
homeowner, or mortgagor and (ii) either:
(A)  the  property  is a risk to the health, safety, or welfare of the
public, or any adjoining or adjacent property owners,  due  to  acts  of
vandalism,  loitering,  criminal  conduct,  or  physical  destruction or
deterioration of the property; or
(B) the relevant governmental  authority  has  declared  the  property
unfit  for  occupancy and either ordered that the property remain vacant
and unoccupied or ordered that the property be demolished; or
(C) each homeowner or mortgagor has separately informed the mortgagee,
in writing, that they do not  intend  to  occupy  the  property  in  the
future, and
(iii) where indicia of lack of occupancy may include, but shall not be
limited  to:  (A)  overgrown  or  dead  vegetation;  (B) accumulation of
newspapers, circulars, flyers, or mail; (C) past  due  utility  notices,
disconnected  utilities  or  utilities  not  in use; (D) accumulation of
trash, refuse or other debris; (E) absence of window coverings  such  as
curtains,  blinds,  or  shutters; (F) absence of furnishings or personal
items consistent with residential habitation; (G) one or  more  boarded,
missing  or  broken windows; (H) the property is open to casual entry or
trespass; (I) the property has  a  building  or  structure  that  is  or
appears  structurally unsound or has any other condition that presents a
potential hazard or danger to the safety of persons, and
(iv) where such residential real  property  shall  not  be  considered
"vacant  and  abandoned" if, on the property: (A) there is an unoccupied
building which is undergoing construction, renovation, or rehabilitation
that is proceeding to completion, and the building is in compliance with
all applicable ordinances, codes, regulations, and statutes;  (B)  there
is  a  building  that is secure, but is the subject of a probate action,
action to quiet title, or other similar ownership dispute; (C) there  is
a  building  damaged  by  natural  disaster  upon declaration of a state
disaster emergency by the governor pursuant to section  twenty-eight  of
the  executive  law relating to any claim arising from the cause of such
declaration, while awaiting funds to repair; or (D) there is a  building
occupied on a seasonal basis, but otherwise secure;
(d)  "homeowner"  shall mean a natural person who has a legal interest
in the property other than a tenant and is the occupant of  a  residence
that secures such residential home loan;
(e)   "eligible   institution"  shall  mean  a  community  development
financial institution or a community development  financial  institution
partnered  with  a not-for-profit, housing counseling agency, land bank,
or other local government entity, or any of the  aforementioned,  either
on  their  own  or  partnered  with  a  community  development financial
institution. An eligible  community  development  financial  institution
shall  have  a record of success in serving investment areas or targeted
populations; and/or shall have agreed to expand its  operations  into  a
new  investment  area  or to serve a new targeted population, offer more
products or services, or increase the volume of  its  current  business.
Eligible not-for-profits shall, among other things, have the ability to:
undertake repair or rehabilitation efforts; carry out property and asset
management,  including  servicing,  undertake demolition; and/or provide
assistance in finding housing options, market  properties  for  sale  or
rental;  coordinate,  provide,  and/or connect homeowners to counseling,
mediation, legal representation, and negotiate on behalf  of  homeowners
seeking  a  residential home loan payment modification, provide training
and support for counselors,  mediators,  and  attorneys  regarding  such
assistance to homeowners, as well as provide credit counseling;
(f) "community development financial institution" or "CDFI" shall mean
an  organization  located  in  this  state which has been certified as a
community development financial institution  by  the  federal  community
development  financial  institutions fund, as established pursuant to 12
U.S.C. 4701 et seq., as amended from time to time;
(g) "investment area" means a geographic area that  is  determined  by
the  agency,  from  time  to time, as meeting criteria indicative, as of
such  time,  of  economic   distress,   including   unemployment   rate;
foreclosure  rate;  percentages and numbers of low-income residents; per
capita income and per  capita  real  property  wealth;  and  such  other
indicators  of  distress  as  the  agency  shall determine. Economically
distressed areas may include  counties,  cities,  municipalities,  block
numbering  areas,  and  census  tracts. The program shall to the fullest
extent possible strive for regional diversity in  providing  foreclosure
relief  and  assistance consistent with the program goals to communities
throughout New York state that are impacted by the foreclosure crises;
(h) "lender" means banks as defined in section twenty-four hundred two
of this part, investors including institutional investors,  the  agency,
any  state agency authorized to acquire and hold residential home loans,
mortgage servicers and other private, non-bank entities that may own and
hold a mortgage and mortgage note, the federal  housing  administration,
the  U.S.  department  of agriculture rural development corporation, the
U.S. department of housing and urban development,  the  federal  housing
finance agency, and any privately owned, publicly chartered entities and
wholly-owned corporate instrumentalities of the United States within the
U.S.  department of housing and urban development created by congress to
encourage lending and reduce costs primarily in the  housing  sector  of
the economy; and
(i)  "residence" means residential real property as defined in section
thirteen hundred five of the real property actions and proceedings law.
(2) The agency is hereby directed to establish and administer  a  fund
to  be  known  as the "New York state community restoration fund," which
shall consist of monies deposited therein.  Nothing  contained  in  this
section  shall prevent the agency from receiving grants, gifts, or other
monies from other sources, or bequests  and  depositing  them  into  the
fund.  The  agency  shall not commingle the monies in such fund with any
other monies of the agency.
(3) The monies in the fund shall be eligible to be used by the  agency
under  program  guidelines  established by the board of directors of the

agency, in consultation with an advisory council to be  created  by  the
agency  comprised of a minimum of seven members, where a majority of the
membership of the council will  be  comprised  of  representatives  from
non-profit  members  of  the  community  with knowledge of foreclosures,
housing, or community development  needs  in  communities  hard  hit  by
foreclosures.   The   guidelines  shall  include,  among  other  things,
requirements  to  ensure  that  fund  monies  are  expended  based  upon
demonstrable  community  needs,  for  the  purposes  set  forth  in this
subdivision,  and  may  also  be  awarded  by  the  agency  to  eligible
institutions  following  the process established pursuant to subdivision
four of this section, to:
(a) acquire, purchase, or sell residences  and/or  mortgage  notes  on
residential  home  loans  and residences at or below market rates, or at
par if  so  required  to  satisfy  legal  or  programmatic  restrictions
applicable  to  the  purchase  of  any  mortgage  loans  expected  to be
acquired, from  lenders,  or  from  local,  state,  and/or  the  federal
government  at auction, short sale, or other private or public sale with
the intent to:
(i) where possible, provided the homeowner can demonstrate an economic
hardship, as such term is defined  under  the  agency's  guidelines,  in
consultation with the advisory council, modify the residential home loan
to an affordable rate to keep the current homeowners in the property;
(ii)  permit  the homeowner, provided the homeowner can demonstrate an
economic  hardship,  as  such  term  is  defined  under   the   agency's
guidelines,  in  consultation with the advisory council, to transfer his
or her ownership interest in the home to the agency or  to  an  eligible
institution  and  to  remain in the residence as a tenant on agreed-upon
terms, or obtain assistance from the agency or an  eligible  institution
to acquire a new affordable residence;
(iii) rehabilitate distressed properties; and/or
(iv) demolish homes that are dilapidated or reasonably beyond repair.
(b)  make  grants  and  loans  to  eligible homeowners or to potential
buyers of residences in the investment areas; or
(c) fund not-for-profit developers, affordable housing developers, and
not-for-profit agencies to acquire vacant and  abandoned  properties  or
other  real  property,  mortgages, or mortgage notes acquired under this
program, and develop such properties into affordable housing and to work
with homeowners in the investment area eligible  to  be  assisted  under
this   section,   through  activities  such  as  foreclosure  prevention
counseling,  providing  new  homeowner   training,   home   repair   and
rehabilitation, property and asset management, demolition, and marketing
properties for sale and rental.
(4) (a) In awarding funding to eligible institutions, the agency shall
select  from  eligible  institutions pursuant to criteria established by
the agency's board of  directors,  in  consultation  with  the  advisory
council established in subdivision three of this section, which criteria
shall include, but not be limited to:
(i)  the experience and background of the eligible institution's board
of directors or management team;
(ii) the extent of  need  within  the  investment  areas  or  targeted
populations;
(iii)  the  extent of economic distress within the investment areas or
the extent of need within the targeted populations;
(iv) the extent of the  eligible  institution's  current  and  planned
community involvement;
(v)  the  extent  to  which the eligible institution will increase its
resources through  coordination  with  other  eligible  institutions  or
encourage collaborative applications by multiple eligible institutions;
(vi)  in  the  case  of an institution with a prior history of serving
investment areas or targeted  populations,  the  extent  of  success  in
serving such areas or populations;
(vii)  the  extent  to  which eligible institutions would use funds to
restructure residential home loans to allow homeowners  to  continue  to
occupy their residences; and
(viii) other factors deemed to be appropriate by the agency.
(b)  In  allocating funding to eligible institutions, the agency shall
be authorized to make funding available in any manner necessary for such
eligible institution to participate in auctions  disposing  of  mortgage
notes or residences.
(5)  The  agency's board of directors shall establish, in consultation
with the advisory council  established  in  subdivision  three  of  this
section, guidelines to:
(a)   develop   application  and  reporting  procedures  for  eligible
institutions to use to apply for funds to carry out  the  provisions  of
this  section  and  criteria  for  use by the eligible institutions that
receive funds pursuant to this  section  to  evaluate  applications  for
assistance from homeowners;
(b)  develop  guidelines  for  funds issued to and loans issued by the
agency and by eligible institutions, including guidelines for use by the
agency for purchase and sales of residences and/or mortgages and notes;
(c)  establish  the  procedure  by  which  eligible  institutions  are
selected and compensated, including establishing the relative importance
and/or weight given to each criterion;
(d)  establish terms by which eligible institutions shall maintain and
utilize funds received pursuant to this section, provided  however  that
eligible  institutions  shall keep such funds separate from all other of
its business or fiduciary accounts; and
(e) establish terms by which the eligible institutions shall repay the
fund  for  monies  allocated  to  them  pursuant  to  this  section,  if
applicable.
(6)  Nothing  in  this  section shall preclude an eligible institution
from working with or coordinating activities and/or  services  with  any
entity  that  handles  and  facilitates  the transfers of mortgage notes
and/or property to  eligible  entities  under  this  section;  provided,
however, that any funds awarded to an eligible institution shall only be
used to advance the purposes of this section.
(7)  The  agency shall submit a report to the governor, the speaker of
the assembly,  the  minority  leader  of  the  assembly,  the  temporary
president  of  the  senate,  and the minority leader of the senate on or
before the first of February each year. Such report shall  include,  but
not  be  limited  to,  a detailed description of the use of funds by the
agency for programs under this section, and of the use of funds for each
eligible institution receiving funds under this section.