New York Codes, Rules and Regulations › Title 9 - EXECUTIVE DEPARTMENT › Subtitle S - Division of Housing and Community Renewal › Chapter III - Low Rent Housing › Subchapter D - Accounting Manual For Public Housing Agencies › Part 1643 - Financing › Subpart 1643-1 - Methods Of Financing State-aided Projects › Section 1643-1.3 - Borrowing from private investors

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Temporary loan notes. Local agencies may
						be authorized or directed by the division to issue their own short term notes
						directly to private investors, such as banks, to finance the cost of project
						development, prior to the issue of housing bonds by the State. These notes are
						termed temporary loan notes and are issued in anticipation of the loan to be
						made by the State. Temporary loan notes may have a maturity not in excess of
						one year from the date of issue, but subject to prepayment in advance of
						maturity, and may be refunded, upon maturity, through the sale of a similar
						issue of short-term notes by the local agency, subject to the limitations of
						the Public Housing Law. Where a project has been declared substantially
						completed, the local agency may only issue temporary loan notes that mature
						within a period not to exceed one year beyond the date of maturity of notes
						outstanding on the date of substantial completion. Temporary loan notes may
						also be refunded out of advances made by the State representing either the
						proceeds of a bond issue or an issue of short-term notes by the State. No
						refunding of temporary loan notes, may, however, take place after the bonds
						have been issued for same. The Public Housing Law further provides that the
						proceeds of an issue of short-term notes by the local agency in anticipation of
						a loan from the State shall be used only for the purposes for which the
						proceeds of the loan itself may be used.
(b) Requisition agreements and advance loan
						notes. Where the temporary financing of project cost is by borrowing from
						private investors, such as banks, the security for the temporary loan notes
						issued is a requisition agreement between the State and the local agency and an
						advance loan note, executed simultaneously with the temporary loan notes and
						deposited in escrow. The advance loan note is made payable by the local agency
						to the State of New York, is dated as of the date of maturity of the temporary
						loan notes for which the advance loan note is the security, matures one year
						from such date and is made out in a principal amount, rounded off to the
						nearest $1,000, sufficient to pay the principal of and the interest on the
						temporary loan notes. The requisition agreement, in turn, specifies that the
						State will purchase the local agency's advance loan note on the date of
						maturity of the temporary loan notes and that the proceeds of such purchase
						will be applied to the payment of the principal of and the interest on the
						temporary loan notes, the balance, if any, being paid to the local agency for
						deposit in the project's development fund. In the event that the temporary loan
						notes are refunded, upon maturity, by a similar issue of temporary loan notes,
						the old requisition agreement and advance loan note are cancelled and replaced
						by a new requisition agreement and advance loan note securing the new issue of
						temporary loan notes. In the event the State purchases the advance loan note,
						upon maturity of the temporary loan notes, out of the proceeds of a bond issue
						or an issue of short-term notes, the division will hold the advance loan note
						against the receipt of the local agency's certificate of indebtedness. The
						advance loan note will thereupon be cancelled and returned to the local
						agency.