2023 New York Laws › PVH - Private Housing Finance › Article 8-B - Loans to Owners of One to Four Unit Private and Multiple Dwellings › 472 - Loans to Owners.

§  472.  Loans  to  owners.  1.  Notwithstanding the provisions of any
general, special or local law, a municipality, acting through an agency,
is authorized:
(a) to make, or contract to make, loans to owners of one to four  unit
existing  private  or  multiple dwellings within its territorial limits,
subject to the limitation of subdivisions  two  through  seven  of  this
section,  in  such  amounts as shall be required for the rehabilitation,
improvement or acquisition of such dwellings  provided,  that  any  such
rehabilitation   or   improvement   may   include   climate   resiliency
improvements. Such loans may also be made exclusively for or include the
refinancing of the outstanding indebtedness of such dwellings,  and  the
municipality  may  make  temporary  loans  or advances to such owners in
anticipation of permanent 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
provisions  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. Each loan shall be evidenced by a note executed by the owner of the
existing  dwelling. Repayment of each such note shall be 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 existing dwelling. The repayment shall be made
in such manner as may be provided in such note and contract, if any,  in
connection  with  such  loan,  and  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. In order to make any such
loan  affordable  to  the owner, the agency may provide in such note and
contract that all of the outstanding  principal  of  said  loan  may  be
self-liquidated  over  a  period  of  not  less  than  fifteen  years of
continuous compliance by the owner with a regulatory agreement or  other
restrictive  covenant  with  or  approved  by  the  agency  and upon the
satisfaction of any additional conditions specified therein.  Such  note
and   contract   may   contain  such  other  terms  and  provisions  not
inconsistent with the provisions of this article as the agency may  deem
necessary  or  desirable  to  secure repayment of the loan, the interest
thereon, if any, 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 the note and mortgage,
and, if applicable, any regulatory agreement executed by such owner  and
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
existing dwelling.
3.  The  agency  in its discretion may require that the owner execute,
acknowledge and deliver a uniform commercial  code  financing  statement
for the real property improvement to be in such form as the agency shall
specify and in accordance with the requirements of section 9--502 of the
uniform  commercial  code  of  the  state  of  New  York. Said financing
statement shall be filed or recorded without charge in  accordance  with
the  provisions  of paragraph one of subsection (a) of section 9--501 of
the uniform commercial code, and  from  the  date  of  such  filing  the
municipality  shall  have  a lien against said real property improvement
for the amount advanced or so much thereof as  remains  unpaid  together
with  the  interest  thereon.  Upon  payment of all sums advanced by the

municipality and interest thereon, and upon demand of  the  then  record
owner  of  the  real  property,  the  agency shall deliver a copy of the
financing statement  with  an  endorsement  thereon  that  the  lien  is
satisfied.  Upon  filing  of such copy in the office where the financing
statement was filed and upon payment of the  proper  fee  therefor,  the
lien of such financing statement shall be discharged.
4.  The agency may require the owner to execute a mortgage as security
for a loan in lieu of  or  in  addition  to  a  financing  statement  as
provided  in  subdivision  three  of  this  section. Such mortgage shall
contain such terms and provisions not inconsistent with  the  provisions
of  this  article  as  the  agency  shall deem necessary or desirable to
secure repayment of the loan.
5. Loans may be made with respect to a one to  four  unit  private  or
multiple  dwelling  encumbered  by mortgages, provided no mortgage is in
default, except if such  default  shall  be  remedied  by  the  proposed
rehabilitation or improvement.
6.  The agency may require the payment of charges by the owner of such
existing  private  or  multiple  dwelling  in  consideration   for   the
financing,  regulation, supervision and audit of such loan. Such charges
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.
7. In making a loan under this article, an agency shall have the power
to participate in a loan made by any private  investor  The  agency  may
enter  into  an  agreement with a private investor to deposit funds with
such private investor to cover the agency's participation  in  loans  to
owners  of one to four unit existing private and multiple dwellings with
such funds advanced by such  private  investor  to  owners  of  existing
dwellings.  The portion of the loan funded by the agency may be equal to
or subordinate in lien to the portion of the loan funded by the  private
investor  and  the note and contract may contain such terms with respect
to interest rate, if any, and time of payment of principal and  interest
as  determined  by  the agency. The agency may make provision, either in
the mortgage or mortgages or by separate agreement, for the  performance
by the private investor of such services as are generally performed by a
banking  institution  which  itself holds a mortgage, including, without
limitation,  construction  loan  advances,   construction   supervision,
initiation of foreclosure proceedings, procurement of insurance, and all
other  matters in connection with the financing, supervision, regulation
and audit of any such loan. In order to make the loan affordable to  the
owner,  the agency may provide an interest reduction subsidy pursuant to
section four hundred seventy-five of this article, or may  provide  that
all  or part of the agency's portion of the outstanding principal of any
such participation loan may be self-liquidated over a period of not less
than fifteen  years  of  continuous  compliance  by  the  owner  with  a
regulatory  agreement  or other restrictive covenant with or approved by
the agency and  upon  the  satisfaction  of  any  additional  conditions
specified therein.