§ 696-A — Loans

* § 696-a. Loans. 1. a. Notwithstanding the provisions of any\ngeneral, special or local law, an agency is hereby authorized to make or\ncontract to make grants or loans to the owner of any property that is\npart of an urban development action area project for the purpose of (i)\nrehabilitation of an existing private or multiple dwelling or\nconstruction of a new private or multiple dwelling, (ii) providing site\nimprovements, incidental or appurtenant to such rehabilitation or such\nconstruction, within the urban development action area in which the\nurban development action area project is located, including, but not\nlimited to, water and sewer facilities, sidewalks, landscaping, parks\nand open space, social, recreational, communal and other non-residential\nfacilities and the outfitting thereof, the curing of problems caused by\nabnormal site conditions, excavation and construction of footings and\nfoundations and other improvements associated with the provision of\ninfrastructure, or (iii) providing for other costs of construction for\nthe development of private and multiple dwelling housing accommodations.\n b. In the case of a grant made under this section for the\nrehabilitation of an existing multiple dwelling intended to be converted\nto a condominium or cooperative form of ownership or for the development\nof one to four unit housing accommodations or a condominium or\ncooperative housing corporation, such grant shall require a regulatory\nagreement with the agency limiting profits.\n c. Any loan made in accordance with this section shall be secured by a\nnote and mortgage upon the property improved, other than any such\nproperty title to which is held by the municipality or, in the case of a\ncondominium, a note and mortgage upon each of the condominium units\naided by such loan, or in the case of a cooperative housing corporation,\na note and mortgage upon the economic interest in such corporation of\neach tenant-shareholder aided by such loan, or upon the property\nimproved, other than any such property title to which is held by the\nmunicipality, or upon both such economic interest or property; provided,\nhowever, that all or part of any such loan may be unsecured if necessary\nto satisfy the requirements of any participating lender, and, provided\nfurther, that the lien created by the note and mortgage may be recorded\nin an equal or subordinate position, or subsequently made equal or\nsubordinate, to a lien recorded by any participating lender against such\nproperty. Such loan shall be repaid over such period as the agency shall\ndetermine.\n d. Such note and mortgage may provide that the loan shall\nautomatically be reduced to zero over a period of up to thirty years of\ncontinuous compliance by the owner with a regulatory agreement with the\nagency limiting profits and rentals charged or requiring owner\noccupancy. Notwithstanding such provision as contained in the note and\nmortgage, the loan shall be reduced to zero only if, prior to or\nsimultaneously with delivery of such note and mortgage, the agency made\na written determination that such reduction would be necessary to ensure\nthe continued affordability or economic viability of the housing\naccommodations assisted by such loan. Such written determination shall\ndocument the basis upon which the loan was determined to be eligible for\nevaporation.\n e. In the case of a grant or loan made under this section for the\npurpose of providing rental housing for persons of low income as defined\nin section two of the private housing finance law, such loan or grant\nshall require a regulatory agreement with the agency limiting profits\nand rentals charged.\n f. The repayment of any loan made in accordance with this section\nshall be made in such manner as may be provided in such note and\nmortgage in connection with such loan, and may authorize the owner, with\nthe consent of the agency, to prepay the principal of the loan subject\nto such terms and conditions as therein provided. Such note and mortgage\nmay contain such other terms and conditions not inconsistent with the\nprovisions of this article as the agency may deem necessary or desirable\nto carrying out the purposes and provisions of this article including,\nbut not limited to, provisions concerning the repayment of the loan, the\ninterest, if any, thereon, and other charges in connection therewith.\n g. For purposes of this article, (i) the term "mortgage" shall include\nany pledge or assignment of shares or assignment of a proprietary lease\nin a cooperative housing corporation where such pledge or assignment is\nintended as security for the performance of an obligation and which\nimposes a lien on or affects title to such shares or such proprietary\nlease; and (ii) the term "owner" shall mean an individual, partnership,\ncorporation or other entity, including a non-profit company, a mutual\ncompany, or a housing development fund company, having record or\nbeneficial title in fee simple to real property or the lessee thereof\nunder a lease having a term of at least forty-nine years.\n 2. Notwithstanding the provisions of, or any regulation promulgated\npursuant to, the emergency housing rent control law, the local emergency\nhousing rent control act, the emergency tenant protection act of\nnineteen seventy-four, and/or any local law enacted pursuant thereto,\nupon completion of the rehabilitation of any building used primarily for\nresidential purposes, which is aided by a loan made by a municipality\npursuant to subdivision one of this section in a jurisdiction in which\nrents are regulated pursuant to any of the above laws or acts, the\nagency shall establish the initial rent for each rental dwelling unit\nwithin the building. All dwelling units within such building subsequent\nto establishment of initial rents by the agency shall be subject to the\nemergency housing rent control law, the local emergency housing rent\ncontrol act, the emergency tenant protection act of nineteen\nseventy-four, and/or any local law enacted pursuant thereto, if\napplicable in the municipality, but only if such laws and/or acts would\notherwise apply to such dwelling units. The tenants in occupancy of such\ndwelling units in such a building that are regulated pursuant to such\nlaws and/or acts shall be offered a choice of a one-year or two-year\nlease at the initial rent established by the agency, notwithstanding any\ncontrary provisions of, or regulations adopted pursuant to, such laws\nand/or acts. The agency shall cause all tenants in occupancy of each\ndwelling unit affected by this subdivision to be notified of and have an\nopportunity to comment upon the contemplated rehabilitation. Such\nnotification shall advise such tenants of the approximate expected rent\nincrease and the subsequent availability of a one- or two-year lease.\nSuch notification and opportunity to comment shall be provided prior to\ncommencement of the rehabilitation and again after its completion before\nestablishment of the initial rents.\n 3. The agency shall use its best efforts to ensure that actions\nundertaken pursuant to subdivision two of this section are structured so\nas to minimize the likelihood of any involuntary economic displacement\nof tenants who reside in multiple dwellings which are the subject of\nsuch actions, provided, however, that if temporary physical displacement\nis required as a direct result of rehabilitation work which is performed\nin a multiple dwelling which is aided by a loan made by a municipality\npursuant to subdivision one of this section, suitable temporary\nrelocation arrangements shall be provided.\n * NB Effective until July 1, 2027\n * § 696-a. Loans. Notwithstanding the provisions of any general,\nspecial or local law, an agency is hereby authorized to make or contract\nto make grants or loans to the owner of any property that is part of an\nurban development action area project for the purpose of: (i)\nrehabilitation of an existing private or multiple dwelling or\nconstruction of a new private or multiple dwelling, (ii) providing site\nimprovements, incidental or appurtenant to such rehabilitation or such\nconstruction, within the urban development action area in which the\nurban development action area project is located, including, but not\nlimited to, water and sewer facilities, sidewalks, landscaping, parks\nand open space, social, recreational, communal and other non-residential\nfacilities and the outfitting thereof, the curing of problems caused by\nabnormal site conditions, excavation and construction of footings and\nfoundations and other improvements associated with the provision of\ninfrastructure, or (iii) providing for other costs of construction for\nthe development of private and multiple dwelling housing accommodations.\nIn the case of a grant made under this section for the rehabilitation of\nan existing multiple dwelling intended to be converted to a condominium\nor cooperative form of ownership or for the development of one to four\nunit housing accommodations or a condominium or cooperative housing\ncorporation, such grant shall require a regulatory agreement with the\nagency limiting profits. Any loan made in accordance with this section\nshall be secured by a note and mortgage upon the property improved,\nother than any such property title to which is held by the municipality,\nor, in the case of a condominium, a note and mortgage upon each of the\ncondominium units aided by such loan, or in the case of a cooperative\nhousing corporation, a note and mortgage upon the economic interest in\nsuch corporation of each tenant-shareholder aided by such loan, or upon\nthe property improved, other than any such property title to which is\nheld by the municipality, or upon both such economic interest or\nproperty; provided, however, that all or part of any such loan may be\nunsecured if necessary to satisfy the requirements of any participating\nlender. Such loan shall be repaid over such period as the agency shall\ndetermine. In the case of a loan for rehabilitation of an existing\nmultiple dwelling intended to be converted to a condominium or\ncooperative form of ownership or a loan for the provision of\ninfrastructure or for the provision of other costs of construction for\nthe development of one to four unit housing accommodations or a\ncondominium or cooperative housing corporation, such note and mortgage\nmay provide that the loan shall automatically be reduced to zero over a\nperiod of owner-occupancy of the housing accommodations assisted by such\nloan. In the case of a grant or loan made under this section for the\npurpose of providing rental housing for persons of low income as defined\nin section two of the private housing finance law, such loan or grant\nshall require a regulatory agreement with the agency limiting profits\nand rentals charged. In the case of a loan made under this section for\nthe purpose of providing rental housing for persons of low income as\ndefined in section two of the private housing finance law, such note and\nmortgage may provide that the loan shall automatically be reduced to\nzero over a period of up to thirty years of compliance by the owner with\na regulatory agreement with the agency limiting profits and rentals\ncharged. The repayment of any loan made in accordance with this section\nshall be made in such manner as may be provided in such note and\nmortgage in connection with such loan, and may authorize the owner, with\nthe consent of the agency, to prepay the principal of the loan subject\nto such terms and conditions as therein provided. Such note and mortgage\nmay contain such other terms and conditions not inconsistent with the\nprovisions of this article as the agency may deem necessary or desirable\nto carrying out the purposes and provisions of this article including,\nbut not limited to, provisions concerning the repayment of the loan, the\ninterest, if any, thereon, and other charges in connection therewith.\nFor purposes of this article, (1) the term "mortgage" shall include any\npledge or assignment of shares or assignment of a proprietary lease in a\ncooperative housing corporation where such pledge or assignment is\nintended as security for the performance of an obligation and which\nimposes a lien on or affects title to such shares or such proprietary\nlease; and (2) the term "owner" shall mean an individual, partnership,\ncorporation or other entity, including a non-profit company, a mutual\ncompany, or a housing development fund company, having record or\nbeneficial title in fee simple to real property or the lessee thereof\nunder a lease having a term of at least forty-nine years.\n * NB Effective July 1, 2027\n