§ 2405-F — New York state community restoration fund

§ 2405-f. New York state community restoration fund. (1) Definitions.\nFor the purposes of this section, the following terms shall have the\nfollowing meanings:\n (a) "fund" shall mean the New York state community restoration fund\nestablished pursuant to subdivision two of this section;\n (b) "residential home loan" shall mean a first or subordinate lien\nloan, including mortgage loans purchased by the agency under section\ntwenty-four hundred five-b of this part, that is secured by a borrower's\ninterest in: (i) residential real property, including as defined in\nsection thirteen hundred five of the real property actions and\nproceedings law, and any improvements or structures thereon; (ii) a\nshare or shares of a cooperative corporation that entitles a borrower to\na housing unit; or (iii) a residential structure that is part of a\ncondominium development. Residential home loan shall also include\ninterest, taxes, homeownership associations fees, carrying charges, and\nother liens encumbering the residence;\n (c) "vacant and abandoned" residential real property shall mean (i)\nresidential real property, as defined in section thirteen hundred five\nof the real property actions and proceedings law, where the property is\nnot occupied by the tenant, as that term is defined in section thirteen\nhundred five of the real property actions and proceedings law,\nhomeowner, or mortgagor and (ii) either:\n (A) the property is a risk to the health, safety, or welfare of the\npublic, or any adjoining or adjacent property owners, due to acts of\nvandalism, loitering, criminal conduct, or physical destruction or\ndeterioration of the property; or\n (B) the relevant governmental authority has declared the property\nunfit for occupancy and either ordered that the property remain vacant\nand unoccupied or ordered that the property be demolished; or\n (C) each homeowner or mortgagor has separately informed the mortgagee,\nin writing, that they do not intend to occupy the property in the\nfuture, and\n (iii) where indicia of lack of occupancy may include, but shall not be\nlimited to: (A) overgrown or dead vegetation; (B) accumulation of\nnewspapers, circulars, flyers, or mail; (C) past due utility notices,\ndisconnected utilities or utilities not in use; (D) accumulation of\ntrash, refuse or other debris; (E) absence of window coverings such as\ncurtains, blinds, or shutters; (F) absence of furnishings or personal\nitems consistent with residential habitation; (G) one or more boarded,\nmissing or broken windows; (H) the property is open to casual entry or\ntrespass; (I) the property has a building or structure that is or\nappears structurally unsound or has any other condition that presents a\npotential hazard or danger to the safety of persons, and\n (iv) where such residential real property shall not be considered\n"vacant and abandoned" if, on the property: (A) there is an unoccupied\nbuilding which is undergoing construction, renovation, or rehabilitation\nthat is proceeding to completion, and the building is in compliance with\nall applicable ordinances, codes, regulations, and statutes; (B) there\nis a building that is secure, but is the subject of a probate action,\naction to quiet title, or other similar ownership dispute; (C) there is\na building damaged by natural disaster upon declaration of a state\ndisaster emergency by the governor pursuant to section twenty-eight of\nthe executive law relating to any claim arising from the cause of such\ndeclaration, while awaiting funds to repair; or (D) there is a building\noccupied on a seasonal basis, but otherwise secure;\n (d) "homeowner" shall mean a natural person who has a legal interest\nin the property other than a tenant and is the occupant of a residence\nthat secures such residential home loan;\n (e) "eligible institution" shall mean a community development\nfinancial institution or a community development financial institution\npartnered with a not-for-profit, housing counseling agency, land bank,\nor other local government entity, or any of the aforementioned, either\non their own or partnered with a community development financial\ninstitution. An eligible community development financial institution\nshall have a record of success in serving investment areas or targeted\npopulations; and/or shall have agreed to expand its operations into a\nnew investment area or to serve a new targeted population, offer more\nproducts or services, or increase the volume of its current business.\nEligible not-for-profits shall, among other things, have the ability to:\nundertake repair or rehabilitation efforts; carry out property and asset\nmanagement, including servicing, undertake demolition; and/or provide\nassistance in finding housing options, market properties for sale or\nrental; coordinate, provide, and/or connect homeowners to counseling,\nmediation, legal representation, and negotiate on behalf of homeowners\nseeking a residential home loan payment modification, provide training\nand support for counselors, mediators, and attorneys regarding such\nassistance to homeowners, as well as provide credit counseling;\n (f) "community development financial institution" or "CDFI" shall mean\nan organization located in this state which has been certified as a\ncommunity development financial institution by the federal community\ndevelopment financial institutions fund, as established pursuant to 12\nU.S.C. 4701 et seq., as amended from time to time;\n (g) "investment area" means a geographic area that is determined by\nthe agency, from time to time, as meeting criteria indicative, as of\nsuch time, of economic distress, including unemployment rate;\nforeclosure rate; percentages and numbers of low-income residents; per\ncapita income and per capita real property wealth; and such other\nindicators of distress as the agency shall determine. Economically\ndistressed areas may include counties, cities, municipalities, block\nnumbering areas, and census tracts. The program shall to the fullest\nextent possible strive for regional diversity in providing foreclosure\nrelief and assistance consistent with the program goals to communities\nthroughout New York state that are impacted by the foreclosure crises;\n (h) "lender" means banks as defined in section twenty-four hundred two\nof this part, investors including institutional investors, the agency,\nany state agency authorized to acquire and hold residential home loans,\nmortgage servicers and other private, non-bank entities that may own and\nhold a mortgage and mortgage note, the federal housing administration,\nthe U.S. department of agriculture rural development corporation, the\nU.S. department of housing and urban development, the federal housing\nfinance agency, and any privately owned, publicly chartered entities and\nwholly-owned corporate instrumentalities of the United States within the\nU.S. department of housing and urban development created by congress to\nencourage lending and reduce costs primarily in the housing sector of\nthe economy; and\n (i) "residence" means residential real property as defined in section\nthirteen hundred five of the real property actions and proceedings law.\n (2) The agency is hereby directed to establish and administer a fund\nto be known as the "New York state community restoration fund," which\nshall consist of monies deposited therein. Nothing contained in this\nsection shall prevent the agency from receiving grants, gifts, or other\nmonies from other sources, or bequests and depositing them into the\nfund. The agency shall not commingle the monies in such fund with any\nother monies of the agency.\n (3) The monies in the fund shall be eligible to be used by the agency\nunder program guidelines established by the board of directors of the\nagency, in consultation with an advisory council to be created by the\nagency comprised of a minimum of seven members, where a majority of the\nmembership of the council will be comprised of representatives from\nnon-profit members of the community with knowledge of foreclosures,\nhousing, or community development needs in communities hard hit by\nforeclosures. The guidelines shall include, among other things,\nrequirements to ensure that fund monies are expended based upon\ndemonstrable community needs, for the purposes set forth in this\nsubdivision, and may also be awarded by the agency to eligible\ninstitutions following the process established pursuant to subdivision\nfour of this section, to:\n (a) acquire, purchase, or sell residences and/or mortgage notes on\nresidential home loans and residences at or below market rates, or at\npar if so required to satisfy legal or programmatic restrictions\napplicable to the purchase of any mortgage loans expected to be\nacquired, from lenders, or from local, state, and/or the federal\ngovernment at auction, short sale, or other private or public sale with\nthe intent to:\n (i) where possible, provided the homeowner can demonstrate an economic\nhardship, as such term is defined under the agency's guidelines, in\nconsultation with the advisory council, modify the residential home loan\nto an affordable rate to keep the current homeowners in the property;\n (ii) permit the homeowner, provided the homeowner can demonstrate an\neconomic hardship, as such term is defined under the agency's\nguidelines, in consultation with the advisory council, to transfer his\nor her ownership interest in the home to the agency or to an eligible\ninstitution and to remain in the residence as a tenant on agreed-upon\nterms, or obtain assistance from the agency or an eligible institution\nto acquire a new affordable residence;\n (iii) rehabilitate distressed properties; and/or\n (iv) demolish homes that are dilapidated or reasonably beyond repair.\n (b) make grants and loans to eligible homeowners or to potential\nbuyers of residences in the investment areas; or\n (c) fund not-for-profit developers, affordable housing developers, and\nnot-for-profit agencies to acquire vacant and abandoned properties or\nother real property, mortgages, or mortgage notes acquired under this\nprogram, and develop such properties into affordable housing and to work\nwith homeowners in the investment area eligible to be assisted under\nthis section, through activities such as foreclosure prevention\ncounseling, providing new homeowner training, home repair and\nrehabilitation, property and asset management, demolition, and marketing\nproperties for sale and rental.\n (4) (a) In awarding funding to eligible institutions, the agency shall\nselect from eligible institutions pursuant to criteria established by\nthe agency's board of directors, in consultation with the advisory\ncouncil established in subdivision three of this section, which criteria\nshall include, but not be limited to:\n (i) the experience and background of the eligible institution's board\nof directors or management team;\n (ii) the extent of need within the investment areas or targeted\npopulations;\n (iii) the extent of economic distress within the investment areas or\nthe extent of need within the targeted populations;\n (iv) the extent of the eligible institution's current and planned\ncommunity involvement;\n (v) the extent to which the eligible institution will increase its\nresources through coordination with other eligible institutions or\nencourage collaborative applications by multiple eligible institutions;\n (vi) in the case of an institution with a prior history of serving\ninvestment areas or targeted populations, the extent of success in\nserving such areas or populations;\n (vii) the extent to which eligible institutions would use funds to\nrestructure residential home loans to allow homeowners to continue to\noccupy their residences; and\n (viii) other factors deemed to be appropriate by the agency.\n (b) In allocating funding to eligible institutions, the agency shall\nbe authorized to make funding available in any manner necessary for such\neligible institution to participate in auctions disposing of mortgage\nnotes or residences.\n (5) The agency's board of directors shall establish, in consultation\nwith the advisory council established in subdivision three of this\nsection, guidelines to:\n (a) develop application and reporting procedures for eligible\ninstitutions to use to apply for funds to carry out the provisions of\nthis section and criteria for use by the eligible institutions that\nreceive funds pursuant to this section to evaluate applications for\nassistance from homeowners;\n (b) develop guidelines for funds issued to and loans issued by the\nagency and by eligible institutions, including guidelines for use by the\nagency for purchase and sales of residences and/or mortgages and notes;\n (c) establish the procedure by which eligible institutions are\nselected and compensated, including establishing the relative importance\nand/or weight given to each criterion;\n (d) establish terms by which eligible institutions shall maintain and\nutilize funds received pursuant to this section, provided however that\neligible institutions shall keep such funds separate from all other of\nits business or fiduciary accounts; and\n (e) establish terms by which the eligible institutions shall repay the\nfund for monies allocated to them pursuant to this section, if\napplicable.\n (6) Nothing in this section shall preclude an eligible institution\nfrom working with or coordinating activities and/or services with any\nentity that handles and facilitates the transfers of mortgage notes\nand/or property to eligible entities under this section; provided,\nhowever, that any funds awarded to an eligible institution shall only be\nused to advance the purposes of this section.\n (7) The agency shall submit a report to the governor, the speaker of\nthe assembly, the minority leader of the assembly, the temporary\npresident of the senate, and the minority leader of the senate on or\nbefore the first of February each year. Such report shall include, but\nnot be limited to, a detailed description of the use of funds by the\nagency for programs under this section, and of the use of funds for each\neligible institution receiving funds under this section.\n