§ 402 — Loans to owners

New York § 402

• Jurisdiction: New York
• Law PVH: Private Housing Finance
• Art. 8: Loans to Owners of Existing Multiple Dwellings

Text

§ 402. Loans to owners. 1. Notwithstanding the provisions of any\ngeneral, special or local law, a municipality, by such officer or agency\nas determined by its local legislative body, is hereby authorized:\n (a) to make or contract to make loans to the owners of existing\nmultiple dwellings within its territorial limits, subject to the\nlimitations in subdivision two of this section, in such amounts as may\nbe required for the installation of proper heating facilities, the\nincorporation of climate resiliency improvements, or elimination of\nconditions dangerous to human life or detrimental to health, including\nnuisances as defined in section three hundred nine of the multiple\ndwelling law, or other rehabilitation, preservation or improvement of\nsuch multiple dwellings, and if such owner acquires the multiple\ndwelling for the purposes of such rehabilitation, preservation or\nimprovement or owns the multiple dwelling subject to an outstanding\nindebtedness, such loans may be made exclusively for or may include such\namounts as may be required for the cost of such acquisition or for the\nrefinancing of such outstanding indebtedness, and may make temporary\nloans or advances to such owners in anticipation of the permanent\nmunicipal loans for such purposes; and\n (b) to make or contract to make grants to any owner described in\nparagraph (a) of this subdivision, on the same terms as permitted under\nsuch paragraph for a loan.\n 1-a. As used in this article, the term "loan" shall include any grant\nmade by a municipality pursuant to this article, provided, however, that\nany provision of this article concerning the repayment or forgiveness\nof, or security for, a loan shall not apply to any grant made pursuant\nto this article.\n 2-a. (a) Each permanent loan shall be secured by a bond and mortgage\nor note and mortgage upon the multiple dwelling and the land upon which\nit is situated, provided that where the multiple dwelling is held in the\ncondominium form of ownership, such loan shall be secured by a bond and\nmortgage or note and mortgage upon the condominium units rehabilitated\nor improved with such loan; where the loan is made to an owner who is a\nlessee, such loan shall be secured by a leasehold interest in such\nproperty.\n (b) Each such bond and mortgage or note and mortgage shall be repaid\nover or within a period of forty years, provided that such period may be\nextended as the agency may determine necessary to ensure the continued\naffordability or economic viability of the multiple dwelling, in such\nmanner as may be provided in such bond and mortgage or note and mortgage\nand contract. Such bond and mortgage or note and mortgage and the\ncontract in connection with such permanent and temporary loans may\ncontain such other terms and provisions not inconsistent with the\nprovisions of this article as the local legislative body or the agency\nmay deem necessary or desirable to secure repayment of the loan, the\ninterest thereon and other charges in connection therewith and to carry\nout the purposes and provisions of this article, including, but not\nlimited to, providing that the lien created by such bond and mortgage or\nnote and mortgage, and, if applicable, any regulatory agreement executed\nby the owner and the agency or restrictive covenant approved by such\nagency, may be recorded in an equal or subordinate position, or\nsubsequently made equal or subordinate, to a lien recorded by any\nprivate lender against such multiple dwelling.\n 2-b. If a loan pursuant to this article is made to a non-profit\ncompany or a housing development fund company which agrees to provide\nhousing accommodations exclusively for persons and families of low\nincome, at least thirty percent of whom are referred to it by the\nmunicipality and have prior to their initial occupancy in such\naccommodations resided in emergency shelter facilities operated by or on\nbehalf of the municipality, the agency may provide that the note and\nmortgage shall automatically be reduced to zero in five equal annual\ndecrements commencing on the tenth year after the initial occupancy\ndate, provided that such accommodations have been owned and operated in\na manner consistent with an agreement with the municipality contained in\nsuch note and mortgage to provide housing for such persons.\n 3. The bond or note issued by the owner of such multiple dwelling and\nthe mortgage relating thereto may authorize such owner, with the consent\nof the agency, to prepay the principal of the loan subject to such terms\nand conditions as therein provided. Such bond or note and mortgage may\ncontain such other clauses and provisions as the agency shall require.\n 4. The agency may require the payment of charges by an owner of such\nmultiple dwelling in consideration for the financing, regulation,\nsupervision and audit of such loan. Such fees shall be paid into the\ntreasury of the municipality requiring the charges and shall be paid and\ndeposited in the general fund of any such municipality.\n 5. Whenever reference is made in this article to a municipal loan, a\nloan by a municipality, a loan from a municipality, a contract for a\nloan between a municipality and an owner, or any similar term, with\nrespect to the territorial limits of the city of New York such terms\nshall be construed to refer to a loan made or to be made either by such\nmunicipality or by the New York city housing development corporation,\nwhichever is applicable.\n 6. The bond and mortgage or note and mortgage issued by the owner of\nany such multiple dwelling may provide that the loan shall be reduced to\nzero commencing on the fifteenth year after the execution of the bond\nand mortgage or note and mortgage, provided that, as of the date of any\nsuch reduction, the multiple dwelling has been and continues to be owned\nand operated in a manner consistent with a regulatory agreement with the\nmunicipality. Notwithstanding such provision as contained in the bond\nand mortgage or note and mortgage, the loan shall be reduced to zero\nonly if, prior to or simultaneously with delivery of such bond and\nmortgage or note and mortgage, the agency made a written determination\nthat such reduction would be necessary to ensure the continued\naffordability or economic viability of the multiple dwelling. Such\nwritten determination shall document the basis upon which the loan was\ndetermined to be eligible for evaporation.\n