§ 472 — Loans to owners

§ 472. Loans to owners. 1. Notwithstanding the provisions of any\ngeneral, special or local law, a municipality, acting through an agency,\nis authorized:\n (a) to make, or contract to make, loans to owners of one to four unit\nexisting private or multiple dwellings within its territorial limits,\nsubject to the limitation of subdivisions two through seven of this\nsection, in such amounts as shall be required for the rehabilitation,\nimprovement or acquisition of such dwellings provided, that any such\nrehabilitation or improvement may include climate resiliency\nimprovements. Such loans may also be made exclusively for or include the\nrefinancing of the outstanding indebtedness of such dwellings, and the\nmunicipality may make temporary loans or advances to such owners in\nanticipation of permanent 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\nprovisions of this article concerning the repayment or forgiveness of,\nor security for, a loan shall not apply to any grant made pursuant to\nthis article.\n 2. Each loan shall be evidenced by a note executed by the owner of the\nexisting dwelling. Repayment of each such note shall be within a period\nof forty years, provided that such period may be extended as the agency\nmay determine necessary to ensure the continued affordability or\neconomic viability of the existing dwelling. The repayment shall be made\nin such manner as may be provided in such note and contract, if any, in\nconnection with such loan, and may authorize such owner, with the\nconsent of the agency, to prepay the principal of the loan subject to\nsuch terms and conditions as therein provided. In order to make any such\nloan affordable to the owner, the agency may provide in such note and\ncontract that all of the outstanding principal of said loan may be\nself-liquidated over a period of not less than fifteen years of\ncontinuous compliance by the owner with a regulatory agreement or other\nrestrictive covenant with or approved by the agency and upon the\nsatisfaction of any additional conditions specified therein. Such note\nand contract may contain such other terms and provisions not\ninconsistent with the provisions of this article as the agency may deem\nnecessary or desirable to secure repayment of the loan, the interest\nthereon, if any, 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 the note and mortgage,\nand, if applicable, any regulatory agreement executed by such owner and\nagency, or restrictive covenant approved by such agency, may be recorded\nin an equal or subordinate position, or subsequently made equal or\nsubordinate, to a lien recorded by any private lender against such\nexisting dwelling.\n 3. The agency in its discretion may require that the owner execute,\nacknowledge and deliver a uniform commercial code financing statement\nfor the real property improvement to be in such form as the agency shall\nspecify and in accordance with the requirements of section 9--502 of the\nuniform commercial code of the state of New York. Said financing\nstatement shall be filed or recorded without charge in accordance with\nthe provisions of paragraph one of subsection (a) of section 9--501 of\nthe uniform commercial code, and from the date of such filing the\nmunicipality shall have a lien against said real property improvement\nfor the amount advanced or so much thereof as remains unpaid together\nwith the interest thereon. Upon payment of all sums advanced by the\nmunicipality and interest thereon, and upon demand of the then record\nowner of the real property, the agency shall deliver a copy of the\nfinancing statement with an endorsement thereon that the lien is\nsatisfied. Upon filing of such copy in the office where the financing\nstatement was filed and upon payment of the proper fee therefor, the\nlien of such financing statement shall be discharged.\n 4. The agency may require the owner to execute a mortgage as security\nfor a loan in lieu of or in addition to a financing statement as\nprovided in subdivision three of this section. Such mortgage shall\ncontain such terms and provisions not inconsistent with the provisions\nof this article as the agency shall deem necessary or desirable to\nsecure repayment of the loan.\n 5. Loans may be made with respect to a one to four unit private or\nmultiple dwelling encumbered by mortgages, provided no mortgage is in\ndefault, except if such default shall be remedied by the proposed\nrehabilitation or improvement.\n 6. The agency may require the payment of charges by the owner of such\nexisting private or multiple dwelling in consideration for the\nfinancing, regulation, supervision and audit of such loan. Such charges\nshall be paid into the treasury of the municipality requiring the\ncharges and shall be paid and deposited in the general fund of any such\nmunicipality.\n 7. In making a loan under this article, an agency shall have the power\nto participate in a loan made by any private investor The agency may\nenter into an agreement with a private investor to deposit funds with\nsuch private investor to cover the agency's participation in loans to\nowners of one to four unit existing private and multiple dwellings with\nsuch funds advanced by such private investor to owners of existing\ndwellings. The portion of the loan funded by the agency may be equal to\nor subordinate in lien to the portion of the loan funded by the private\ninvestor and the note and contract may contain such terms with respect\nto interest rate, if any, and time of payment of principal and interest\nas determined by the agency. The agency may make provision, either in\nthe mortgage or mortgages or by separate agreement, for the performance\nby the private investor of such services as are generally performed by a\nbanking institution which itself holds a mortgage, including, without\nlimitation, construction loan advances, construction supervision,\ninitiation of foreclosure proceedings, procurement of insurance, and all\nother matters in connection with the financing, supervision, regulation\nand audit of any such loan. In order to make the loan affordable to the\nowner, the agency may provide an interest reduction subsidy pursuant to\nsection four hundred seventy-five of this article, or may provide that\nall or part of the agency's portion of the outstanding principal of any\nsuch participation loan may be self-liquidated over a period of not less\nthan fifteen years of continuous compliance by the owner with a\nregulatory agreement or other restrictive covenant with or approved by\nthe agency and upon the satisfaction of any additional conditions\nspecified therein.\n