§ 1102 — Cooperative or condominium, homesteading and rental contracts

New York § 1102

• Jurisdiction: New York
• Law PVH: Private Housing Finance
• Art. 18: Low Income Housing Trust Fund Program

Text

§ 1102. Cooperative or condominium, homesteading and rental contracts.\n1. Within the limit of funds available in the housing trust fund\naccount, the corporation is hereby authorized to enter into contracts\nwith eligible applicants for the furnishing by such applicants of\nhousing for persons of low income. Each such contract shall provide that\neligible applicants rehabilitate or construct one or more projects or\nconvert one or more nonresidential properties. Such contracts may\nprovide for payments, grants or loans by the corporation for the\nactivities to be carried out by the eligible applicant under the\ncontract. Such contracts shall provide that a private developer make an\nequity investment of the greater of (i) two and one-half percent of\nproject costs or (ii) five percent of project costs less grants which\nare to be applied to such costs. The foregoing shall not preclude a\nprivate developer from making a greater equity investment. Any payments,\ngrants or loans made by the corporation outstanding at the time of\nresale shall be subject to repayment in whole or in part upon resale\nafter termination of the regulatory period and as otherwise provided\ntherein. Such repayment provisions may survive the end of the regulatory\nperiod. Such contracts may provide that eligible applicants shall either\n(a) perform activities specified under the contract themselves or (b)\nact as administrators of a program under which projects are\nrehabilitated or constructed or nonresidential properties are converted\nby other eligible applicants or (c) perform both such functions. In the\ncase of a municipality acting as an administrator, funds provided to\nsuch municipality hereunder shall not be deemed to be municipal funds.\nThe corporation shall refer any request for payments, grants or loans\nfrom persons of low income to eligible applicants in the area in which\nsuch persons reside. Loans may be in the form of participation in loans\nincluding but not limited to participation in loans originated or\nfinanced by lending institutions as defined in section forty-two of this\nchapter, the state of New York mortgage agency, the New York city\nhousing development corporation, the New York state housing finance\nagency or private or public employee pension funds. Notwithstanding any\nother provision of law, payments, grants and loans may be deposited by\nthe corporation directly with a lending institution at or before the\ntime of initial loan closing pursuant to an escrow agreement\nsatisfactory to the corporation. Payments, grants and loans shall be on\nsuch terms and conditions as the corporation, or the eligible applicant\nwith the approval of the corporation, as the case may be, shall\ndetermine. Payments, grants and loans shall be used to pay for the\nactual and necessary cost of acquisition, construction, rehabilitation\nor conversion, provided that not more than fifty percent of such\npayments, grants and loans received for the rehabilitation, construction\nor conversion of a project may be used for the cost of the project's\nacquisition and not more than ten percent of such payments, grants and\nloans may be used for the rehabilitation, construction or conversion of\ncommunity service facilities and, provided further, that payments,\ngrants or loans shall not be used for (i) the administrative costs of an\neligible applicant except as otherwise authorized by law, (ii) the cost\nof the acquisition, construction, conversion or rehabilitation of\nresidential units which, subsequent to such acquisition, construction,\nconversion or rehabilitation, are to be occupied by persons other than\npersons of low income, and (iii) the cost of the acquisition,\nconstruction, conversion or rehabilitation of units which, subsequent to\nsuch acquisition, construction, conversion or rehabilitation, are\noccupied or to be occupied for other than residential purposes, except\nfor community service facilities as described above. No such payments,\ngrants or loans shall exceed a total of two hundred fifty thousand\ndollars per dwelling unit, or such amount of additional funds as the\ncorporation may determine in accordance with this subdivision. Among the\ncriteria the corporation shall consider in determining whether to\nprovide additional funds are: average cost of construction in the area,\nlocation of the project and the impact of the additional funding on the\naffordability of the project for the occupants of such project. The\nlength of any loan provided under this article shall not exceed forty\nyears. No more than fifty percent of the total amount originally\nappropriated pursuant to this article in any fiscal year shall be\nallocated to projects located within any single municipality. Of the\namount originally appropriated to the corporation in any fiscal year, no\nmore than thirty-three and one-third percent shall be allocated to\nprivate developers for projects within a city with a population of one\nmillion or more. Of the amount originally appropriated to the\ncorporation in any fiscal year, no more than thirty-three and one-third\npercent shall be allocated to private developers for projects in the\narea outside cities with a population of one million or more.\n 2. The corporation and eligible applicants which act as administrators\nof a program under this article shall deposit any recaptured funds or\nfunds from the repayment of loans and interest received on loans into\nthe housing trust fund account.\n 3. The corporation shall not enter into a contract under this article\nunless the eligible applicant has submitted an application and such\napplication contains a plan, acceptable to the corporation, which\nprovides for each project:\n (a) That violations on the project which are classified as hazardous\nor immediately hazardous shall be repaired in accordance with state and\nlocal laws and regulations of state and local agencies and the project\nshall be brought into compliance with all applicable laws and\nregulations.\n (b) For the establishment of occupant selection procedures which\nprovide that any lawful occupants who live in a project prior to\nrehabilitation shall not be displaced as a result of such\nrehabilitation, other than temporarily, in which case suitable\nrelocation arrangements shall be provided, and that any additional\noccupants who move into a project are persons of low income. Preference\nin selection of such additional occupants; (i) shall be given to persons\nor families with the lowest incomes possible, given the income\nrequirements of the project and; (ii) shall also be given to persons or\nfamilies whose current housing fails to meet basic standards of health\nand safety and who have little prospect of improving the condition of\ntheir housing except by residing in a project receiving payments, grants\nor loans under this article.\n (c) In the case of a homesteading project that (i) the project may\nonly be transferred or sold to an eligible applicant; and (ii) the\nresale price of the project shall not exceed an amount equal to the sum\nof (A) the original equity paid by the owner for the project and\nrehabilitation or construction thereof, exclusive of any payments,\ngrants or loans received pursuant to this article for such purposes, or\nfrom such other sources as determined by the corporation, with interest\nthereon at the rate of six percent per annum, (B) the cost of capital\nimprovements to the project paid by such owner after the completion of\nrehabilitation or construction, exclusive of any payments, grants or\nloans received pursuant to this article for such purposes, or from such\nother sources as determined by the corporation, with interest thereon at\nthe rate of six percent per annum, (C) the actual amortization paid by\nsuch owner in the reduction of total outstanding principal indebtedness\non all existing and prior mortgages on, or loans for, such project, but\nonly to the extent that the proceeds of such mortgages or loans were\nused by the owner for the project and rehabilitation or construction\nthereof or for the cost of capital improvements thereto, with interest\nthereon at the rate of six percent per annum, (D) the actual outstanding\nprincipal indebtedness on all existing mortgages on, or loans or other\nobligations for, such project which the owner is required to satisfy,\nbut only to the extent that the proceeds of such mortgages or loans were\nused by the owner for the project and rehabilitation or construction\nthereof or for the cost of capital improvements thereto, with interest\nthereon at the rate of six percent per annum, provided that if the\nindebtedness is not paid in full upon the sale of the project, such\nowner shall not be credited with the amount of such indebtedness, and\n(E) the reasonable costs and expenses incurred in connection with the\nsale of such project.\n (d) In the case of a cooperative project that (i) the shares\napplicable to a cooperative unit shall be transferred or sold only to an\neligible applicant; and (ii) the resale price of shares applicable to a\ncooperative unit shall not exceed an amount equal to the sum of (A) the\noriginal equity paid by the tenant shareholder for such shares and for\nthe rehabilitation or construction of such unit, exclusive of any\npayments, grants or loans received pursuant to this article for such\npurposes or from such other sources as determined by the corporation,\nwith interest thereon at the rate of six percent per annum, (B) the cost\nof capital improvements to such unit paid by such tenant shareholder\nafter the completion of rehabilitation or construction, exclusive of any\npayments, grants or loans received pursuant to this article for such\npurposes or from such other sources as determined by the corporation,\nwith interest thereon at the rate of six percent per annum, (C) the\npro-rata portion of any capital assessments or capital contributions for\nbuilding wide improvements paid by such tenant shareholder, with\ninterest thereon at the rate of six percent per annum, (D) the pro-rata\nportion of actual amortization paid by such tenant shareholder on all\nexisting and prior mortgages on such project in the reduction of total\noutstanding principal indebtedness, with interest thereon at the rate of\nsix percent per annum, (E) the actual amortization paid by such tenant\nshareholder in the reduction of total outstanding principal indebtedness\non all existing and prior loans for such unit, but only to the extent\nthat the proceeds of such loans were used by the tenant shareholder for\nthe purchase of such shares or for the cost of the rehabilitation or\nconstruction of, or capital improvements to, such unit, with interest\nthereon at the rate of six percent per annum, (F) the actual outstanding\nprincipal indebtedness on all existing loans or other obligations for\nsuch unit which the tenant shareholder is required to satisfy, but only\nto the extent that the proceeds of such loans were used by such tenant\nshareholder for the purchase of such shares or for the cost of the\nrehabilitation or construction of, or capital improvements to, such\nunit, provided that if such indebtedness is not paid in full upon the\nsale of such tenant's shares such tenant shareholder shall not be\ncredited with the amount of such indebtedness, and (G) the reasonable\ncosts and expenses incurred in connection with the sale of such shares.\n (e) In the case of a condominium project that (i) a condominium unit\nshall be transferred or sold only to an eligible applicant; and (ii) the\nresale price of a condominium unit shall not exceed an amount equal to\nthe sum of (A) the original equity paid by the owner for such unit and\nthe rehabilitation or construction thereof, exclusive of any payments,\ngrants or loans received pursuant to this article for such purposes or\nfrom such other sources as determined by the corporation, with interest\nthereon at the rate of six percent per annum, (B) the cost of capital\nimprovements to such unit paid by such owner after the completion of\nrehabilitation or construction, exclusive of any payments, grants or\nloans received pursuant to this article for such purposes or from such\nother sources as determined by the corporation, with interest thereon at\nthe rate of six percent per annum, (C) the pro-rata portion of any\ncapital assessments or capital contributions for building wide\nimprovements paid by such owner to the project, with interest thereon at\nthe rate of six percent per annum, (D) the actual amortization paid by\nsuch owner on all existing and prior mortgages on, or loans for, such\nunit in the reduction of total outstanding principal indebtedness, but\nonly to the extent that the proceeds of such mortgages or loans were\nused by such owner for the unit and the rehabilitation or construction\nthereof or for the cost of capital improvements thereto with interest\nthereon at the rate of six percent per annum, (E) the actual outstanding\nprincipal indebtedness on all existing mortgages on, and loans or other\nobligations for, such unit which the owner is required to satisfy, but\nonly to the extent that the proceeds of such mortgages or loans were\nused by such owner for the unit and the rehabilitation or construction\nthereof or for the cost of capital improvements thereto, provided that\nif the indebtedness is not paid in full upon the sale of such unit, such\nowner shall not be credited with the amount of such indebtedness, and\n(F) the reasonable costs and expenses incurred in connection with the\nsale of such unit.\n (f) In the case of a rental project that (i) the rental project may\nonly be transferred or sold to an eligible applicant; and (ii) the\nresale price of the rental project shall not exceed an amount equal to\nthe sum of (A) the original equity paid by the owner for the project and\nrehabilitation or construction thereof, exclusive of any payments,\ngrants or loans received pursuant to this article for such purposes or\nfrom such other sources as determined by the corporation, with interest\nthereon at the rate of six percent per annum, (B) the cost of capital\nimprovements to the project paid by the owner after the completion of\nrehabilitation or construction, exclusive of any payments, grants or\nloans received pursuant to this article for such purposes or from such\nother sources as determined by the corporation, with interest thereon at\nthe rate of six percent per annum, (C) the actual amortization paid by\nsuch owner on all existing and prior mortgages on, or loans for, such\nproject in the reduction of total outstanding principal indebtedness,\nbut only to the extent that the proceeds of such mortgages or loans were\nused by such owner for the project and rehabilitation thereof or for the\ncost of capital improvements thereto, with interest thereon at the rate\nof six percent per annum, (D) the actual outstanding principal\nindebtedness on all existing mortgages on, or loans or other obligations\nfor, such project which the owner is required to satisfy, but only to\nthe extent that the proceeds of such mortgages or loans were used by the\nowner for the project and rehabilitation thereof or for the cost of\ncapital improvements thereto, provided that if the indebtedness is not\npaid in full upon the sale of the project, such owner shall not be\ncredited with the amount of such indebtedness, and (E) the reasonable\ncosts and expenses incurred in connection with the sale of such project.\n (g) In the case of a rental project, that the project shall be\noperated initially as a rental property, and when located in the city of\nNew York shall be subject to the rent stabilization law of nineteen\nhundred sixty-nine, and when located in a municipality which has elected\nto be covered by the provisions of the emergency tenant protection act\nof nineteen seventy-four, be subject to the provisions of such act. Any\nsubsequent conversion to cooperative or condominium ownership during the\nperiod in which such property remains subject to the provisions of this\narticle shall only be allowed with the consent of the corporation and if\ndone pursuant to section three hundred fifty-two-eeee or three hundred\nfifty-two-eee of the general business law shall only be allowed pursuant\nto a non-eviction plan. The conversion of a rental project to\ncooperative or condominium ownership shall make the cooperative or\ncondominium subject to the provisions of this article for cooperative or\ncondominium projects for the remaining term which the rental project was\nto be subject to the provisions of this article.\n (h) To be located in an area which is blighted, deteriorated or\ndeteriorating, or has a blighting influence on the surrounding area, or\nis in danger of becoming a slum or a blighted area because of the\nexistence of substandard, insanitary, deteriorating or deteriorated\nconditions, an aged housing stock, or vacant non-residential property,\nor other factors indicating an inability or unwillingness of the private\nsector unaided to cause the rehabilitation, construction or conversion\nwhich is contracted for under this article.\n 3-a. The corporation shall provide the applicant with a list of\nconditions that must be met prior to entering into a contract pursuant\nto this article. Within fifteen working days of receipt by the\ncorporation of all documents in satisfaction of the list, the\ncorporation shall notify the applicant of the sufficiency or\ninsufficiency of the documents. After satisfaction by the applicant of\nall conditions required by the corporation prior to entering into a\ncontract the corporation shall enter into the contract within forty-five\nworking days of satisfaction of such conditions.\n 4. Notwithstanding the provisions of, or any regulation promulgated\npursuant to, the emergency housing rent control law, the local emergency\nhousing rent control act, or local law enacted pursuant thereto, the\nrent stabilization law of nineteen hundred sixty-nine, or the emergency\ntenant protection act of nineteen seventy-four, the eligible applicant\nwith the approval of the corporation shall have the power to set the\ninitial rent level of any rental housing accommodation which is located\nin a rental or homesteading project receiving payments, grants or loans\nunder this article.\n 5. Any cooperative or condominium or rental project which receives\npayments, grants or loans pursuant to this article shall be subject to\nits provisions for a period of twenty years following completion of\nrehabilitation work, construction or conversion or for the period during\nwhich any loan or indebtedness received under this article remains\noutstanding, whichever is greater provided however that all housing\naccommodations in rental projects shall continue to be subject to the\nrent stabilization law of nineteen hundred sixty-nine or the emergency\ntenant protection act of nineteen seventy-four, as provided in paragraph\n(g) of subdivision three of this section as the case may be, for the\nperiod specified in this subdivision and thereafter the applicability of\nsuch laws shall terminate as to each accommodation upon the first\nvacancy which occurs in each accommodation.\n 6. Any homesteading project which receives payments, grants or loans\nunder this article shall be subject to its provisions for a period of\nfifteen years following completion of rehabilitation work, construction\nor conversion, or for the period during which any loan or indebtedness\nreceived under this article remains outstanding, whichever is greater.\n 6-a. Notwithstanding any provisions of subdivisions five and six of\nthis section to the contrary, in the case of projects subject to a\nmortgage made by any lender:\n (a) such lender, if not the corporation, shall give the corporation\nnotice when an owner has defaulted on any payment of principal or\ninterest on such mortgage loan for a project for a consecutive period of\nsixty days.\n (b) following receipt of such notice, or at such earlier time as the\ncorporation deems appropriate, the corporation shall seek to cure such\ndefault and make the project economically viable by assisting the owner\nin entering into a mortgage modification agreement with the lender,\nfinding a new eligible applicant to own the project and assume the\nobligations under the mortgage or taking such other actions, consistent\nwith the provisions of this article, as the corporation deems\nappropriate.\n (c) notwithstanding the provisions of paragraphs (a) and (b) of this\nsubdivision, with respect to any lender other than the corporation, the\ncorporation may provide in agreements respecting any project that where\na lender shall have foreclosed or obtained title to a project in\naccordance with law and the provisions of its mortgage, the project or\nparticular residential units therein shall not be subject to one or more\nprovisions of this article, other than the rent stabilization coverage\nprovisions of paragraph (g) of subdivision three of this section. Any\nagreement pursuant to this paragraph shall only be made upon a finding\nby the corporation that such agreement is necessary in order to enable a\nproject owner to obtain a mortgage loan from a lender other than the\ncorporation.\n 7. The corporation shall provide for the review, at periodic intervals\nat least annually, of the performance of eligible applicants under\ncontract pursuant to this article. Such review shall, among other\nthings, be for the purposes of ascertaining conformity to contractual\nprovisions, the financial integrity and efficiency of eligible\napplicants and the evaluation of the project. Contracts entered into\npursuant to this article may be terminated, funds may be withheld and\nunspent funds may be recaptured by the corporation upon a finding of\nsubstantial nonperformance or breach by the eligible applicant of its\nobligations under its contract.\n 8. Within each of the three categories of projects (cooperative or\ncondominium, rental, or homesteading), preference in the awarding of\ncontracts shall be given to economically feasible projects which contain\na substantial number of persons of low income whose income does not\nexceed fifty percent of the median income for the metropolitan\nstatistical area in which the project is located, or if the project is\nlocated outside such an area, to projects which contain a substantial\nnumber of persons of low income whose incomes do not exceed fifty\npercent of the median income for the county in which the project is\nlocated, additional preference shall be given to economically feasible\nprojects located on a brownfield site that has received a certificate of\ncompletion.\n