New York Codes, Rules and Regulations › Title 9 - EXECUTIVE DEPARTMENT › Subtitle C - Division of the Budget › Part 153 - Guidelines For Mortgage Modification Agreements › Section 153.4 - Guidelines approved by director of division of the budget

Current through Register Vol. 46, No. 28, July 10, 2024
(a) These
				guidelines apply to all mortgage modification agreements whereby a housing
				company seeks to qualify for moneys from the Project Repair Fund.
(b) The existence of a 20-percent or $10 per
				room per month difference between current rent and total economic rent at an
				HFA-financed housing project will not automatically qualify that project for a
				mortgage modification agreement. Rather, the existence of that situation shall
				be considered a necessary but not a sufficient test or criterion that must be
				met if a mortgage modification agreement is to be valid. Mortgage modification
				agreements must also satisfy or meet the other guidelines for mortgage
				modifications approved by the director of the Division of the Budget as set
				forth in these guidelines.
(c)
				Applicants for mortgage modifications shall demonstrate, in a manner
				satisfactory to the agency, that all reasonable efforts to manage a project
				economically and efficiently, to minimize project operating costs, and to
				secure available Federal subsidies or grants that may be used to increase
				project income or to effect energy conservation improvements, have been taken.
				In making this determination, the agency shall consider the findings and
				recommendations of the commissioner made pursuant to paragraph (i)(2) of this
				section. Applications for rent or carrying charge increases should not be
				delayed, nor should project expenditures be allowed to increase without
				sufficient cause, so that a project may eventually qualify for a mortgage
				modification.
(d) Mortgage
				modification agreements may be made only in those cases when a housing project
				is unable or will be unable, as determined by the commissioner of the Division
				of Housing and Community Renewal (the commissioner) and the executive director
				of the Housing Finance Agency, to fully satisfy, on a timely basis, its
				obligations for debt service, water and sewer or property tax payments for an
				extended period.
(e) The inability
				of a housing project to make payments into reserve accounts or to generate a
				return on owner's equity because of a shortfall in total project revenues will
				not be sufficient to qualify that project for a mortgage modification. However,
				in order to be eligible for a mortgage modification, projects will not be
				required to fully expend or disburse the balance of their escrow or reserve
				funds.
(f) The commissioner shall
				certify that:
(1) the project has an approved
				operating budget for the current fiscal year as required by section 32-a  of the
				Private Housing Finance Law;
(2) no
				expenditures have been made by the project in the current fiscal year except as
				authorized by that budget, or as authorized by the commissioner or his
				designated representative; and
(3)
				he has reviewed the project's operating budget for the current fiscal year in
				light of the need for a mortgage modification and in recognition that the
				project may fail to make timely and full debt service payments, and has
				therefore approved only those expenditures necessary to protect the health and
				safety of tenants and to maintain the project in a habitable
				condition.