§ 1112 — Affordable home ownership development contracts

New York § 1112

• Jurisdiction: New York
• Law PVH: Private Housing Finance
• Art. 19: Affordable Home Ownership Development Program

Text

§ 1112. Affordable home ownership development contracts. 1. Within\nthe limit of funds available in the affordable housing development\naccount, the corporation is hereby authorized to enter into contracts\nwith eligible applicants to provide grants which such applicants shall\nuse to finance affordable home ownership development programs subject to\nthe terms and conditions of this article. Any grants received by a\nmunicipality hereunder shall not be deemed to be municipal funds.\nGrantees shall utilize funds provided pursuant to this article solely as\npayments, grants and loans to owners to reduce the costs of new\nconstruction, rehabilitation or home improvement or the cost of\nacquisition, but only where such acquisition is part of an affordable\nhome ownership development program or project to construct or\nrehabilitate homes, or as otherwise authorized by law. Such financial\nassistance may be in the form of loans, participation in loans including\nbut not limited to participation in loans originated or financed by\nlending institutions as defined in section forty-two of this chapter,\nprivate or public employee pension funds or the state of New York\nmortgage agency, or grants, on such terms and conditions as the grantee\nwith the approval of the corporation shall determine, provided that no\nsuch payments, grants and loans shall exceed the lesser of (i) sixty\npercent of the project cost for projects involving acquisition or one\nhundred percent of rehabilitation programs without an acquisition\ncomponent or (ii) the following per dwelling unit limitations (A) fifty\nthousand dollars for projects except as provided in subparagraph (B) of\nthis paragraph or (B) up to seventy-five thousand dollars for a high\ncost project or a project which will receive a loan from the federal\nfarmers home administration. Up to ten percent of the program or project\ncost may be used for grantee operating expenses including expenses\nrelated to the organization operating support and administration of the\ncontract. Among the criteria the corporation shall consider in\ndetermining whether a project is a high cost project are: average cost\nof construction in the area, location of the project, and the impact of\nthe additional funding on the affordability of the project for the\noccupants of such project. No more than fifty percent of the total\namount appropriated pursuant to this article in any fiscal year shall be\nallocated to homes located within any single municipality.\n 2. The corporation shall not enter into a contract under this article\nexcept with an eligible applicant which has submitted an application\npursuant to a request for proposals issued by the corporation which\napplication contains a plan acceptable to the corporation which provides\nthat:\n (a) The proposed project or program will make home ownership,\nrehabilitation or home improvement affordable to persons who cannot\nafford to own, rehabilitate or improve homes by relying upon the\nordinary unaided operation of private enterprise.\n (b) There shall be criteria, satisfactory to the corporation, which\nprovide for maximum income limitations or a system of income targeting\ndesigned to ensure that home buyers who benefit from financial\nassistance provided pursuant to this article would be unable to acquire,\nrehabilitate or improve homes by relying upon the ordinary unaided\noperation of private enterprise.\n (c) The payments, grants and loans provided by grantees pursuant to\nthis article will be supplemented by private or other public investment\nand the payments, grants and loans provided by the grantee are the least\nnecessary to make home ownership, rehabilitation or home improvement\naffordable to the income group to be served by the proposed project or\nprogram.\n (d) The proposed project or projects, if not built or rehabilitated by\na not-for-profit corporation, will be built or rehabilitated by a\nprivate developer/builder who has agreed to limit his profit in\naccordance with a formula, satisfactory to the corporation, which has\nbeen established by the grantee.\n (e) The proposed project or program will provide assistance in an area\nwhich is blighted, deteriorated or deteriorating, or has a blighting\ninfluence on the surrounding area, or is in danger of becoming a slum or\na blighted area because of the existence of substandard, insanitary,\ndeteriorating or deteriorated conditions, an aged housing stock, or\nvacant non-residential property, or other factors indicating an\ninability or unwillingness of the private sector unaided to cause the\nconstruction, rehabilitation or home improvement for which payments,\ngrants and loans under this article is provided.\n (f) Home buyers will occupy homes as their principal place of\nresidence and funds provided for the benefit of the home buyer will be\nrecaptured by the grantee if the home buyer does not occupy the home as\nthe home buyer's principal place of residence under the terms and\nconditions of a formula established or approved by the corporation.\n (g) In the case of a rehabilitation or home improvement program, the\nmajority of payments, grants and loans provided for each home shall be\nused to perform work which prolongs the useful life of the home or shall\nbe used to correct basic structural defects or to repair basic building\nsystems which threaten or if not corrected or repaired could threaten\nthe health and safety of the dwelling's residents.\n (h) 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 (i) Eligible applicants receiving awards pursuant to this article for\nhomes located in cities with a population of one hundred thousand or\nmore shall provide preference to homebuyers who are members of a police\nforce of such city, provided that such city has adopted a local law\nauthorizing such preference.\n (j) In the case of projects that receive an award of over forty\nthousand dollars, the grantee may establish resale restrictions\nrequiring the sale of the unit or units receiving such funding through a\ngrant from the corporation be purchased only by qualified low-income\nhomebuyers extending for a period of at least sixty years, but no more\nthan ninety-nine years, and the grantee may ensure this resale\nrestriction by use of deed restrictions, community land trusts, or\nlimited-equity cooperative ownership structure.\n 3. In determining awards pursuant to this article the corporation\nshall give preference to applications based upon the extent to which the\nproposed program or project will:\n (a) Serve the lowest income households in the applicable region and is\ndesigned to continue to be affordable to such households for a\nsubstantial period of time.\n (b) Leverage private and other public investment so as to reduce the\namount of assistance provided pursuant to this article which is\nnecessary to operate or establish the program or project.\n (c) Contribute to the development of the neighborhood or community in\nwhich the program or project is located.\n (d) Not directly displace current low and moderate income residents of\nsuch neighborhood or community.\n (e) Be undertaken and completed in a timely fashion.\n (f) Utilize innovative, cost effective design techniques and building\nmaterials, which reduce construction, rehabilitation or operating costs\nincluding, but not limited to factory built or modular homes.\n (g) Be located on a brownfield site that has received a certificate of\ncompletion.\n 3-a. In determining awards pursuant to this article, the corporation\nshall establish tiered project funding levels based on length and depth\nof affordability.\n 4. The corporation shall not provide a grant to an eligible applicant\npursuant to this article unless the corporation determines that there is\na strong probability that the private investment in the applicant's\nproposed program would not be made without the grant and that the grant\nwill not substitute for private funds which would be otherwise available\nto the program.\n 5. The corporation shall provide for the review, at periodic intervals\nnot less than annually, of the performance of grantees receiving\nfinancial assistance pursuant to this article. Such review shall, among\nother things, be for the purposes of ascertaining conformity to\ncontractual provisions, the financial integrity and efficiency of\ngrantees and the evaluation of the grantees' activities. Contracts\nentered into pursuant to this article may be terminated, funds may be\nwithheld and unspent funds recaptured by the corporation upon a finding\nof substantial nonperformance or breach by the grantee of its\nobligations under its contract.\n