2023 New York Laws › GMU - General Municipal › Article 16 - Urban Development Action Area Act › 696-A - Loans.

* §  696-a.  Loans.  1.    a.  Notwithstanding  the  provisions of any
  general, special or local law, an agency is hereby authorized to make or
  contract to make grants or loans to the owner of any  property  that  is
  part  of an urban development action area project for the purpose of (i)
  rehabilitation  of  an  existing  private  or   multiple   dwelling   or
  construction  of a new private or multiple dwelling, (ii) providing site
  improvements, incidental or appurtenant to such rehabilitation  or  such
  construction,  within  the  urban  development  action area in which the
  urban development action area project is  located,  including,  but  not
  limited  to,  water  and sewer facilities, sidewalks, landscaping, parks
  and open space, social, recreational, communal and other non-residential
  facilities and the outfitting thereof, the curing of problems caused  by
  abnormal  site  conditions,  excavation and construction of footings and
  foundations and other improvements  associated  with  the  provision  of
  infrastructure,  or  (iii) providing for other costs of construction for
  the development of private and multiple dwelling housing accommodations.
b.  In  the  case  of  a  grant  made  under  this  section  for   the
  rehabilitation of an existing multiple dwelling intended to be converted
  to a condominium or cooperative form of ownership or for the development
  of  one  to  four  unit  housing  accommodations  or  a  condominium  or
  cooperative housing corporation, such grant shall require  a  regulatory
  agreement with the agency limiting profits.
c. Any loan made in accordance with this section shall be secured by a
  note  and  mortgage  upon  the  property  improved,  other than any such
  property title to which is held by the municipality or, in the case of a
  condominium, a note and mortgage upon  each  of  the  condominium  units
  aided by such loan, or in the case of a cooperative housing corporation,
  a  note  and  mortgage upon the economic interest in such corporation of
  each tenant-shareholder  aided  by  such  loan,  or  upon  the  property
  improved,  other  than  any  such property title to which is held by the
  municipality, or upon both such economic interest or property; provided,
  however, that all or part of any such loan may be unsecured if necessary
  to satisfy the requirements of any participating lender,  and,  provided
  further,  that the lien created by the note and mortgage may be recorded
  in an equal or subordinate  position,  or  subsequently  made  equal  or
  subordinate, to a lien recorded by any participating lender against such
  property. Such loan shall be repaid over such period as the agency shall
  determine.
d.   Such   note   and  mortgage  may  provide  that  the  loan  shall
  automatically be reduced to zero over a period of up to thirty years  of
  continuous  compliance by the owner with a regulatory agreement with the
  agency  limiting  profits  and  rentals  charged  or   requiring   owner
  occupancy.   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 agency made
  a written determination that such reduction would be necessary to ensure
  the  continued  affordability  or  economic  viability  of  the  housing
  accommodations  assisted  by such loan. Such written determination shall
  document the basis upon which the loan was determined to be eligible for
  evaporation.
e. In the case of a grant or loan made  under  this  section  for  the
  purpose of providing rental housing for persons of low income as defined
  in  section  two  of the private housing finance law, such loan or grant
  shall require a regulatory agreement with the  agency  limiting  profits
  and rentals charged.
f.  The  repayment  of  any  loan made in accordance with this section
  shall be made in such manner  as  may  be  provided  in  such  note  and
  mortgage in connection with such loan, and may authorize the owner, with

  the  consent  of the agency, to prepay the principal of the loan subject
  to such terms and conditions as therein provided. Such note and mortgage
  may contain such other terms and conditions not  inconsistent  with  the
  provisions of this article as the agency may deem necessary or desirable
  to  carrying  out the purposes and provisions of this article including,
  but not limited to, provisions concerning the repayment of the loan, the
  interest, if any, thereon, and other charges in connection therewith.
g. For purposes of this article, (i) the term "mortgage" shall include
  any pledge or assignment of shares or assignment of a proprietary  lease
  in  a cooperative housing corporation where such pledge or assignment is
  intended as security for the performance  of  an  obligation  and  which
  imposes  a  lien  on or affects title to such shares or such proprietary
  lease; and (ii) the term "owner" shall mean an individual,  partnership,
  corporation  or  other  entity, including a non-profit company, a mutual
  company, or  a  housing  development  fund  company,  having  record  or
  beneficial  title  in  fee simple to real property or the lessee thereof
  under a lease having a term of at least forty-nine years.
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, and/or any local law  enacted  pursuant  thereto,
  upon completion of the rehabilitation of any building used primarily for
  residential  purposes,  which  is aided by a loan made by a municipality
  pursuant to subdivision one of this section in a jurisdiction  in  which
  rents  are  regulated  pursuant  to  any  of the above laws or acts, the
  agency shall establish the initial rent for each  rental  dwelling  unit
  within  the building. All dwelling units within such building subsequent
  to establishment of initial rents by the agency shall be subject to  the
  emergency  housing  rent  control  law, the local emergency housing rent
  control  act,  the  emergency  tenant   protection   act   of   nineteen
  seventy-four,   and/or  any  local  law  enacted  pursuant  thereto,  if
  applicable in the municipality, but only if such laws and/or acts  would
  otherwise apply to such dwelling units. The tenants in occupancy of such
  dwelling  units  in  such a building that are regulated pursuant to such
  laws and/or acts shall be offered a choice of  a  one-year  or  two-year
  lease at the initial rent established by the agency, notwithstanding any
  contrary  provisions  of,  or regulations adopted pursuant to, such laws
  and/or acts. The agency shall cause all tenants  in  occupancy  of  each
  dwelling unit affected by this subdivision to be notified of and have an
  opportunity  to  comment  upon  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 prior  to
  commencement of the rehabilitation and again after its completion before
  establishment of the initial rents.
3.  The  agency  shall  use  its  best  efforts to ensure that actions
  undertaken pursuant to subdivision two of this section 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 actions, provided, however, that if temporary physical displacement
  is required as a direct result of rehabilitation work which is performed
  in a multiple dwelling which is aided by a loan made by  a  municipality
  pursuant   to  subdivision  one  of  this  section,  suitable  temporary
  relocation arrangements shall be provided.
* NB Effective until July 1, 2024
* § 696-a. Loans.  Notwithstanding  the  provisions  of  any  general,
  special or local law, an agency is hereby authorized to make or contract
  to  make grants or loans to the owner of any property that is part of an

  urban  development  action  area  project  for  the  purpose   of:   (i)
  rehabilitation   of   an   existing  private  or  multiple  dwelling  or
  construction of a new private or multiple dwelling, (ii) providing  site
  improvements,  incidental  or appurtenant to such rehabilitation or such
  construction, within the urban development  action  area  in  which  the
  urban  development  action  area  project is located, including, but not
  limited to, water and sewer facilities,  sidewalks,  landscaping,  parks
  and open space, social, recreational, communal and other non-residential
  facilities  and the outfitting thereof, the curing of problems caused by
  abnormal site conditions, excavation and construction  of  footings  and
  foundations  and  other  improvements  associated  with the provision of
  infrastructure, or (iii) providing for other costs of  construction  for
  the development of private and multiple dwelling housing accommodations.
  In the case of a grant made under this section for the rehabilitation of
  an  existing multiple dwelling intended to be converted to a condominium
  or cooperative form of ownership or for the development of one  to  four
  unit  housing  accommodations  or  a  condominium or cooperative housing
  corporation, such grant shall require a regulatory  agreement  with  the
  agency  limiting  profits. Any loan made in accordance with this section
  shall be secured by a note and  mortgage  upon  the  property  improved,
  other than any such property title to which is held by the municipality,
  or,  in  the case of a condominium, a note and mortgage upon each of the
  condominium units aided by such loan, or in the case  of  a  cooperative
  housing  corporation,  a note and mortgage upon the economic interest in
  such corporation of each tenant-shareholder aided by such loan, or  upon
  the  property  improved,  other than any such property title to which is
  held by the  municipality,  or  upon  both  such  economic  interest  or
  property;  provided,  however,  that all or part of any such loan may be
  unsecured if necessary to satisfy the requirements of any  participating
  lender.  Such  loan shall be repaid over such period as the agency shall
  determine. In the case of a  loan  for  rehabilitation  of  an  existing
  multiple   dwelling  intended  to  be  converted  to  a  condominium  or
  cooperative  form  of  ownership  or  a  loan  for  the   provision   of
  infrastructure  or  for the provision of other costs of construction for
  the development  of  one  to  four  unit  housing  accommodations  or  a
  condominium  or  cooperative housing corporation, such note and mortgage
  may provide that the loan shall automatically be reduced to zero over  a
  period of owner-occupancy of the housing accommodations assisted by such
  loan.  In  the  case  of a grant or loan made under this section for the
  purpose of providing rental housing for persons of low income as defined
  in section two of the private housing finance law, such  loan  or  grant
  shall  require  a  regulatory agreement with the agency limiting profits
  and rentals charged. In the case of a loan made under this  section  for
  the  purpose  of  providing  rental housing for persons of low income as
  defined in section two of the private housing finance law, such note and
  mortgage may provide that the loan shall  automatically  be  reduced  to
  zero over a period of up to thirty years of compliance by the owner with
  a  regulatory  agreement  with  the  agency limiting profits and rentals
  charged. The repayment of any loan made in accordance with this  section
  shall  be  made  in  such  manner  as  may  be provided in such note and
  mortgage in connection with such loan, and may authorize the owner, with
  the consent of the agency, to prepay the principal of the  loan  subject
  to such terms and conditions as therein provided. Such note and mortgage
  may  contain  such  other terms and conditions not inconsistent with the
  provisions of this article as the agency may deem necessary or desirable
  to carrying out the purposes and provisions of this  article  including,
  but not limited to, provisions concerning the repayment of the loan, the
  interest,  if  any,  thereon, and other charges in connection therewith.

  For purposes of this article, (1) the term "mortgage" shall include  any
  pledge or assignment of shares or assignment of a proprietary lease in a
  cooperative  housing  corporation  where  such  pledge  or assignment is
  intended  as  security  for  the  performance of an obligation and which
  imposes a lien on or affects title to such shares  or  such  proprietary
  lease;  and  (2) the term "owner" shall mean an individual, partnership,
  corporation or other entity, including a non-profit  company,  a  mutual
  company,  or  a  housing  development  fund  company,  having  record or
  beneficial title in fee simple to real property or  the  lessee  thereof
  under a lease having a term of at least forty-nine years.
* NB Effective July 1, 2024