2023 New York Laws › PVH - Private Housing Finance › Article 8 - Loans to Owners of Existing Multiple Dwellings › 402 - Loans to Owners.

§  402.  Loans  to  owners.   1. Notwithstanding the provisions of any
general, special or local law, a municipality, by such officer or agency
as determined by its local legislative body, 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, in such amounts  as  may
be  required  for  the  installation  of  proper heating facilities, the
incorporation of climate  resiliency  improvements,  or  elimination  of
conditions  dangerous  to human life or detrimental to health, including
nuisances as defined in section  three  hundred  nine  of  the  multiple
dwelling  law,  or  other rehabilitation, preservation or improvement of
such multiple  dwellings,  and  if  such  owner  acquires  the  multiple
dwelling  for  the  purposes  of  such  rehabilitation,  preservation or
improvement or owns the multiple  dwelling  subject  to  an  outstanding
indebtedness, such loans may be made exclusively for or may include such
amounts  as  may be required for the cost of such acquisition or for the
refinancing of such outstanding indebtedness,  and  may  make  temporary
loans  or  advances  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
any  provision  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-a.  (a)  Each permanent loan shall be secured by a bond and mortgage
or note and mortgage upon the multiple dwelling and the land upon  which
it is situated, provided that where the multiple dwelling is held in the
condominium  form of ownership, such loan shall be secured by a bond and
mortgage or note and mortgage upon the condominium  units  rehabilitated
or  improved with such loan; where the loan is made to an owner who is a
lessee, such loan shall be secured  by  a  leasehold  interest  in  such
property.
(b)  Each  such bond and mortgage or note and mortgage shall be repaid
over or within a period of forty years, provided that such period may be
extended as the agency may determine necessary to ensure  the  continued
affordability  or  economic  viability of the multiple dwelling, in such
manner as may be provided in such bond and mortgage or note and mortgage
and contract. Such bond and  mortgage  or  note  and  mortgage  and  the
contract  in  connection  with  such  permanent  and temporary loans may
contain such other  terms  and  provisions  not  inconsistent  with  the
provisions  of  this article as the local legislative body or the 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, providing that the lien created by such bond and mortgage or
note and mortgage, and, if applicable, any regulatory agreement executed
by  the  owner  and  the agency or restrictive covenant approved by such
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 such multiple dwelling.
2-b. If a loan pursuant to  this  article  is  made  to  a  non-profit
company  or  a  housing development fund 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 the
municipality  and  have  prior  to  their  initial  occupancy  in   such

accommodations resided in emergency shelter facilities operated by or on
behalf  of  the  municipality,  the agency may provide that the note and
mortgage shall automatically be reduced to zero  in  five  equal  annual
decrements  commencing  on  the  tenth  year after the initial occupancy
date, provided that such accommodations have been 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.
3.  The bond or note issued by the owner of such multiple dwelling and
the mortgage relating thereto may authorize such owner, with the consent
of the agency, to prepay the principal of the loan subject to such terms
and conditions as therein provided. Such bond or note and  mortgage  may
contain such other clauses and provisions as the agency shall require.
4.  The  agency may require the payment of charges by an owner of such
multiple  dwelling  in  consideration  for  the  financing,  regulation,
supervision  and  audit  of  such loan. Such fees 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.
5. Whenever reference is made in this article to a municipal  loan,  a
loan  by  a  municipality,  a loan from a municipality, a contract for a
loan between a municipality and an owner,  or  any  similar  term,  with
respect  to  the  territorial  limits of the city of New York such terms
shall be construed to refer to a loan made or to be made either by  such
municipality  or  by  the New York city housing development corporation,
whichever is applicable.
6. The bond and mortgage or note and mortgage issued by the  owner  of
any such multiple dwelling may provide that the loan shall be reduced to
zero  commencing  on  the fifteenth year after the execution of the bond
and mortgage or note and mortgage, provided that, as of the date of  any
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 bond
and mortgage or note and mortgage, the loan shall  be  reduced  to  zero
only  if,  prior  to  or  simultaneously  with delivery of such bond and
mortgage or 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  multiple  dwelling.  Such
written  determination  shall document the basis upon which the loan was
determined to be eligible for evaporation.