2023 New York Laws › PVH - Private Housing Finance › Article 2 - Limited-Profit Housing Companies › 26 - Conditions and Security for Loans.

§  26.  Conditions and security for loans. 1. No loan shall be made by
the state, the New York state housing finance agency, a municipality  or
the   New   York   city   housing  development  corporation  unless  the
commissioner, with respect to a project aided by a  state  loan  or  New
York  state housing finance agency loan, or the supervisory agency, with
respect to a municipally-aided project, finds that:
(a)  The  municipality  has  approved  the  project  as  provided   in
subdivision  five  of  this  section  and  has  enacted  or  will  enact
regulations  or  appropriate  restrictions  adequately  protecting   the
project  against  future  uses  likely to depreciate unduly the value of
such project;
(b) The estimated revenues of the project will be sufficient to  cover
all  probable  costs  of operation and maintenance, of fixed charges and
operating reserves and depreciation reserves if any;
(c) The plans and specifications conform to the  requirements  of  all
laws  applicable thereto, and assure adequate light, air, sanitation and
fire protection;
(d) If the project is aided by a state  loan,  or  a  New  York  state
housing  finance  agency loan, the commissioner shall also find that the
project is in conformity with a plan or undertaking  for  providing  low
rent housing facilities for persons of low income and for the clearance,
replanning,  reconstruction  or  rehabilitation  of  a  substandard  and
insanitary area  or  areas,  and  for  other  facilities  incidental  or
appurtenant thereto as may be approved by the commissioner.
1-a.  No  company  may be aided pursuant to this article by a mortgage
loan or tax exemption or both to finance the acquisition of  a  building
by  residents thereof unless the commissioner or the supervising agency,
as the case may be, finds that:
(a) the condition of such building is deteriorating and  the  building
is  located  in  a  deteriorating  area  or  in  an area threatened with
deterioration  by  reason  of  economic,  social  or  physical   changes
occurring therein or in nearby areas;
(b) the building is not yielding sufficient revenues to cover costs of
operation and maintenance, of fixed charges and of reserves, if any, and
also a reasonable profit to the owner;
(c)  the  making  of  such loan will prevent further deterioration and
abandonment;
(d) at least two-thirds of  the  present  residents  consent  to  such
acquisition;
(e) financing for such acquisition is otherwise unavailable because of
the  neighborhood, the age of the buildings, or other factors indicating
an inability of the private sector unaided to cause such acquisition  to
be effected;
(f)  the  proceeds of such loan will not be used to refinance existing
debt in excess of a reasonable relationship to current value; and
(g) the term for repayment of such loan does not exceed the  remaining
useful life of the building.
2.  The  principal  of a loan made by the state shall be repaid by the
company over a period of not to exceed fifty years except in the case of
a loan to rehabilitate an existing building, in which  case  the  period
shall  not  exceed  thirty-five  years,  or  the  estimated  life of the
project, whichever is shorter,  in  annual  installments  equal  to  the
amount  payable  by  the  state  on the moneys borrowed for the project.
Such annual installment of principal need not be uniform in amount,  but
may  be so varied that the total payment of principal and interest shall
be approximately equal and constant during the period of the loan.  Each
payment of principal and interest shall be made to the state comptroller
not  later  than five days before each payment by the state is required.

The loan shall bear the same rate of interest paid or to be paid by  the
state  for  the definitive housing bonds issued on account of such loan.
The company shall pay to the state comptroller a proportionate share  of
the  cost  of  borrowing  not  later  than  thirty  days after the state
comptroller has certified the amount of such share.
3. Any bonds or notes issued by the company and any mortgages relating
thereto may authorize  the  company,  with  the  consent  of  the  state
comptroller  in  the  case  of a state-aided project, or the supervising
agency in the  case  of  a  municipally-aided  project,  to  prepay  the
principal  of  the  loan.  Such bonds or notes and mortgages may contain
such other clauses and provisions as the commissioner in the case  of  a
state-aided  project  or  the  supervising  agency  in  the  case  of  a
municipally-aided project, shall require. Notwithstanding the provisions
of any general, special or local law, the principal of  any  loans  made
pursuant  to  subdivision  one of section fifteen of this article or the
principal of a loan made by a municipality pursuant to this article  and
secured  by  a mortgage lien subordinate to the lien of a first mortgage
made pursuant to paragraph (b) of subdivision one of section fifteen  of
this  article  may be amortized at such time or times or at such rate as
the supervising agency shall approve.
4. With respect to a state-aided project the commissioner  may  charge
the  company  reasonable fees for financing, regulation, supervision and
audit. Fees collected for such services shall be paid into and disbursed
from such fund or funds as may be provided by law.
5. (a) In a municipality where there is  a  planning  commission,  the
project  shall  first  be submitted to it for approval. Where changes in
the city map and zoning amendments or variances are necessitated by such
project, such amendments,  variances  and  changes  shall  be  submitted
together  with  such  project  and  considered  as  a part thereof. Such
planning commission, not later than ten  weeks  from  the  date  of  the
referral  of  the  project  to  it,  after  a public hearing held on due
notice, notice of which shall be  published  at  least  ten  days  prior
thereto  in  the  official  publication  of the municipality, or if none
exists, in a newspaper circulating in the municipality, shall submit its
report  to  the  local  legislative  body  certifying  its   unqualified
approval,    its   disapproval,   or   its   qualified   approval   with
recommendations for modifications therein.
After public hearing held on  due  notice  and  after  the  report  is
received or due from the planning commission, the local legislative body
may:
(i)  if  the  planning commission shall have certified its unqualified
approval, approve the project by a majority vote;
(ii) if the planning commission shall have certified  its  disapproval
or  shall  have failed to make its report within ten weeks from the date
such project was submitted to it, nevertheless approve the project,  but
only by a three-fourths vote;
(iii)  if  the  planning commission shall have certified its qualified
approval together with recommendations for  modifications,  approve  the
project  together  with  the  modifications  recommended by the planning
commission by a majority vote,  or  approve  the  project  without  such
modifications but only by a three-fourths vote.
(b)  In  a  municipality  where  there  is  no planning commission the
project shall be submitted to the local legislative  body  which,  after
public  hearing held on due notice, may either approve or disapprove the
project.
(c) Notwithstanding any other provision of law, changes  in  the  city
map,  zoning  amendments,  or  variances  contained in the plan shall be
deemed approved by the local  legislative  body  when  it  approves  the

project.  Any  such  changes  in  the  city  map,  zoning amendments, or
variances shall become effective on the date on  which  the  supervising
agency  shall  file  a  resolution  with  the  local legislative body in
implementation thereof.
6.  The  provisions of subdivisions one and five of this section shall
not apply to a state urban development corporation  project  or  to  any
loan  made  by  the  state  or  the state housing finance agency to such
project, notwithstanding anything to the contrary contained herein.
7. Notwithstanding anything to the  contrary  contained  therein,  the
provisions  of subdivisions one and five of this section shall not apply
to a Battery Park city project or to any loan made by the state  or  the
New York state housing finance agency to such project.