Assembly Bill A890

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   890

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by  M. of A. McDONOUGH, KOLB, RAIA -- read once and referred
  to the Committee on Housing

AN ACT to amend the private housing finance law, in relation to  author-
  izing  the  New  York  state  housing  finance agency to make loans to
  eligible persons to assist in the purchase of a home

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. The private housing finance law is amended by adding a new
article 19-A to read as follows:
                               ARTICLE XIX-A
                          HOME OWNERSHIP LOANS
SECTION 1115. LEGISLATIVE PURPOSES.
        1115-A. DEFINITIONS.
        1115-B. CREATION OF "HOUSING PURCHASE AND REHABILITATION FUND".
        1115-C. PURPOSE AND TERMS OF LOAN.
        1115-D. LOAN REPAYMENT.
        1115-E. ISSUANCE OF BONDS.
        1115-F. ADOPTION OF REGULATIONS.
  S 1115. LEGISLATIVE PURPOSES. IT IS HEREBY  FOUND  AND  DECLARED  THAT
MANY NEW YORK RESIDENTS LACK SUFFICIENT FINANCIAL RESOURCES TO MAKE DOWN
PAYMENTS  ON  PRIVATE  HOUSING;  THAT  IT  IS  IN THE PUBLIC INTEREST TO
PROVIDE STATE FINANCIAL ASSISTANCE TO SUCH RESIDENTS TO  ENCOURAGE  HOME
OWNERSHIP  AND  THE  REHABILITATION OF DETERIORATING HOUSING IN ORDER TO
STABILIZE COMMUNITIES, IMPROVE THE TAX BASE AND ASSIST HOME OWNERSHIP BY
LOW AND MODERATE INCOME FAMILIES.
  S 1115-A.  DEFINITIONS. AS USED IN THIS ARTICLE:
  1. "ELIGIBLE FAMILY OR PERSON" MEANS A FAMILY OR PERSON WHO LACKS  THE
AMOUNT  OF  INCOME  NECESSARY,  AS DETERMINED BY THE AGENCY, TO PURCHASE
SAFE AND ADEQUATE HOUSING WITHOUT SPECIAL FINANCIAL ASSISTANCE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01410-01-9
              

A. 890                              2

  2. "AGENCY" MEANS THE NEW YORK STATE HOUSING FINANCE AGENCY CREATED BY
SECTION FORTY-THREE OF THIS CHAPTER.
  S  1115-B.  CREATION  OF  "HOUSING  PURCHASE AND REHABILITATION FUND".
THERE IS ESTABLISHED A "HOUSING PURCHASE AND REHABILITATION FUND".  SUCH
FUND  SHALL  BE  USED  TO  MAKE LOANS AUTHORIZED BY THIS ARTICLE AND FOR
EXPENSES INCURRED BY THE AGENCY IN THE  IMPLEMENTATION  OF  THE  PROGRAM
ESTABLISHED BY THIS ARTICLE.
  S  1115-C.  PURPOSE AND TERMS OF LOAN. 1. THE AGENCY, ACTING ON BEHALF
OF THE STATE MAY IN ITS DISCRETION, ENTER INTO A CONTRACT WITH AN ELIGI-
BLE FAMILY OR PERSON TO PROVIDE, BASED ON THE FINANCIAL  NEEDS  OF  SUCH
FAMILY  OR PERSON, A LOAN TO ASSIST IN THE PURCHASE OF A DWELLING OR THE
PURCHASE AND REHABILITATION OF A DWELLING CONTAINING UP TO FOUR RESIDEN-
TIAL UNITS, PROVIDED SUCH FAMILY OR PERSON SHALL RESIDE IN AT LEAST  ONE
OF SUCH UNITS.
  2.  SUCH LOAN SHALL NOT EXCEED TWENTY PERCENT OF THE COST OF ACQUIRING
SUCH DWELLING OR TWENTY PERCENT OF THE  VALUE  OF  SUCH  DWELLING  AFTER
REHABILITATION,  IF  GREATER.  SUCH  VALUE  SHALL BE DETERMINED FROM THE
APPRAISAL, IF ANY, REQUIRED BY  THE  LENDING  INSTITUTION  GRANTING  THE
FIRST  MORTGAGE LOAN ON SUCH DWELLING, AND IF NO SUCH APPRAISAL HAS BEEN
MADE AT THE TIME THAT A CONTRACT FOR LOAN IS ENTERED  INTO  PURSUANT  TO
THIS ARTICLE, THE AGENCY SHALL CAUSE SUCH APPRAISAL TO BE MADE.
  S  1115-D. LOAN REPAYMENT. 1. ANY LOAN CONTRACTED FOR PURSUANT TO THIS
ARTICLE SHALL BE SECURED BY A SECOND MORTGAGE ON THE DWELLING  PURCHASED
BY  THE  RECIPIENT  OF SUCH LOAN. IF THE RECIPIENT OF SUCH LOAN ASSIGNS,
TRANSFERS OR OTHERWISE CONVEYS HIS INTEREST IN SUCH DWELLING  OR  CEASES
TO  OCCUPY  SUCH  DWELLING,  THE UNPAID PRINCIPAL BALANCE OF SAID SECOND
MORTGAGE, TOGETHER WITH INTEREST THEREON, SHALL BECOME DUE AND  PAYABLE.
IF THE RECIPIENT OF ANY LOAN IS UNABLE TO REPAY THE LOAN, THE AGENCY, AT
ITS  DISCRETION,  MAY  ADJUST THE INTEREST RATE, TERMS AND CONDITIONS OF
THE LOAN TO FACILITATE REPAYMENT.
  2. REPAYMENT OF ANY LOAN PROVIDED  IN  ACCORDANCE  WITH  THIS  ARTICLE
SHALL BE SUBJECT TO AN INTEREST RATE TO BE DETERMINED IN ACCORDANCE WITH
TERMS  AND CONDITIONS AS THE AGENCY MAY ESTABLISH.  IN NO CASE SHALL THE
TERM EXCEED THE TERM OF THE FIRST MORTGAGE OBTAINED FOR THE  PURPOSE  OF
PURCHASING  SUCH  DWELLING  EXCEPT,  IN  THE CASE OF A GRADUATED PAYMENT
MORTGAGE LOAN, THE TERM OF THE LOAN MADE PURSUANT TO  THIS  ARTICLE  MAY
EXCEED  THE EXPECTED TERM OF SUCH MORTGAGE LOAN PROVIDED THE TERM OF THE
LOAN MADE PURSUANT TO THIS ARTICLE DOES NOT EXCEED THE LESSER OF (A) THE
TERM INDICATED BY THE LIMITED AMORTIZATION  SCHEDULE  OF  THE  GRADUATED
PAYMENT  MORTGAGE LOAN OR (B) THIRTY YEARS. PAYMENTS BY HOMEOWNERS SHALL
BE PAID TO THE AGENCY AND DEPOSITED IN THE HOUSING PURCHASE AND REHABIL-
ITATION FUND.
  S 1115-E. ISSUANCE OF BONDS. 1. THE AGENCY SHALL HAVE THE POWER AND IS
HEREBY AUTHORIZED FROM TIME TO TIME TO ISSUE ITS  NEGOTIABLE  BONDS  AND
NOTES IN CONFORMITY WITH APPLICABLE PROVISIONS OF THE UNIFORM COMMERCIAL
CODE  IN  SUCH PRINCIPAL AMOUNTS AS, IN THE OPINION OF THE AGENCY, SHALL
BE NECESSARY TO CARRY OUT THE PURPOSES  OF  THIS  ARTICLE,  BUT  NOT  IN
EXCESS OF AN AGGREGATE AMOUNT OF TWENTY MILLION DOLLARS.
  2.  EXCEPT  AS  MAY OTHERWISE BE EXPRESSLY PROVIDED BY THE AGENCY, ALL
BONDS AND NOTES ISSUED SHALL BE PAYABLE OUT OF  ANY  MONEYS,  ASSETS  OR
REVENUES OF THE STATE, SUBJECT ONLY TO ANY AGREEMENT WITH BONDHOLDERS OR
NOTEHOLDERS PLEDGING ANY PARTICULAR MONEYS, ASSETS OR REVENUES.
  3.  BONDS AND NOTES SHALL BE AUTHORIZED BY A RESOLUTION OR RESOLUTIONS
OF THE AGENCY ADOPTED IN THE MANNER PROVIDED BY LAW.
  4. SUCH BONDS OR NOTES SHALL BEAR SUCH DATE OR DATES, SHALL MATURE  AT
SUCH  TIME OR TIMES, SHALL BEAR INTEREST AT SUCH RATE OR RATES, SHALL BE

A. 890                              3

OF SUCH DENOMINATIONS, SHALL BE IN SUCH FORM,  CARRY  SUCH  REGISTRATION
PRIVILEGES,  BE  EXECUTED  IN SUCH MANNER, BE PAYABLE IN LAWFUL MONEY OF
THE UNITED STATES OF AMERICA AT SUCH PLACE OR PLACES WITHIN  OR  WITHOUT
THE  STATE,  BE SUBJECT TO SUCH TERMS OF REDEMPTION PRIOR TO MATURITY AS
MAY BE PROVIDED BY SUCH RESOLUTION OR RESOLUTIONS  OR  SUCH  CERTIFICATE
WITH  RESPECT  TO  SUCH  BONDS  OR  NOTES, AS THE CASE MAY BE; PROVIDED,
HOWEVER, THAT THE MAXIMUM MATURITY OF  BONDS  SHALL  NOT  EXCEED  THIRTY
YEARS  FROM  THE  DATE  THEREOF AND THE MAXIMUM MATURITY OF NOTES OR ANY
RENEWALS THEREOF SHALL NOT EXCEED SEVEN  YEARS  FROM  THE  DATE  OF  THE
ORIGINAL ISSUE OF SUCH NOTES.
  5.  ANY  SUCH  BONDS  OR NOTES MAY BE SOLD AT SUCH PRICE OR PRICES, AT
PUBLIC OR PRIVATE SALE, IN SUCH MANNER AND FROM TIME TO TIME AS  MAY  BE
DETERMINED  BY THE AGENCY, AND THE AGENCY MAY PAY ALL EXPENSES, PREMIUMS
AND  COMMISSIONS  WHICH  IT  MAY  DEEM  NECESSARY  OR  ADVANTAGEOUS   IN
CONNECTION  WITH THE ISSUANCE AND SALE THEREOF. NO BONDS OR NOTES MAY BE
SOLD AT PRIVATE SALE, HOWEVER, UNLESS SUCH SALE  AND  THE  TERM  THEREOF
HAVE  BEEN  APPROVED  IN WRITING BY (A) THE COMPTROLLER, IF SUCH SALE IS
NOT TO THE COMPTROLLER, OR (B) THE STATE DIRECTOR OF THE BUDGET, IF SUCH
SALE IS TO THE COMPTROLLER.
  6. THE AGENCY IS AUTHORIZED TO PROVIDE FOR THE ISSUANCE OF  ITS  BONDS
OR  NOTES  FOR  THE  PURPOSE  OF  REFUNDING ANY SUCH BONDS OR NOTES THEN
OUTSTANDING, INCLUDING THE PAYMENT OF ANY  REDEMPTION  PREMIUMS  THEREON
AND  ANY  INTEREST  ACCRUED  OR  TO  ACCRUE  TO THE REDEMPTION DATE NEXT
SUCCEEDING THE DATE OF DELIVERY OF SUCH REFUNDING BONDS  OR  NOTES.  THE
PROCEEDS OF ANY SUCH BONDS OR NOTES ISSUED FOR THE PURPOSE OF SO REFUND-
ING  OUTSTANDING  BONDS  OR  NOTES  SHALL  BE  FORTHWITH  APPLIED TO THE
PURCHASE OR RETIREMENT OF SUCH OUTSTANDING BONDS OR NOTES OR THE REDEMP-
TION OF SUCH OUTSTANDING BONDS OR NOTES  ON  THE  REDEMPTION  DATE  NEXT
SUCCEEDING  THE  DATE  OF  DELIVERY OF SUCH REFUNDING BONDS OR NOTES AND
MAY, PENDING SUCH APPLICATION, BE PLACED IN ESCROW TO BE APPLIED TO SUCH
PURCHASE OR RETIREMENT OR REDEMPTION ON SUCH  DATE.  ANY  SUCH  ESCROWED
PROCEEDS, PENDING SUCH USE, MAY BE INVESTED AND REINVESTED ONLY IN OBLI-
GATIONS  OF  OR  GUARANTEED BY THE STATE OR THE UNITED STATES OF AMERICA
AND EITHER (A) THE YIELD  FROM WHICH DOES NOT  EXCEED  THE  AVERAGE  NET
INTEREST  COST  PER  ANNUM, EXPRESSED AS A PERCENTAGE, ON SUCH REFUNDING
BONDS BY MORE THAN ONE-HALF OF ONE PERCENT, OR (B) THE INCOME FROM WHICH
IS EXEMPT FROM FEDERAL TAXATION, MATURING AT SUCH TIME OR TIMES AS SHALL
BE APPROPRIATE TO ASSURE THE PROMPT PAYMENT, AS TO  PRINCIPAL,  INTEREST
AND  REDEMPTION PREMIUM, IF ANY, ON THE OUTSTANDING BONDS OR NOTES TO BE
SO REFUNDED BY PURCHASE, RETIREMENT OR REDEMPTION, AS THE CASE  MAY  BE.
THE INTEREST, INCOME AND PROFITS, IF ANY, EARNED OR REALIZED ON ANY SUCH
INVESTMENT  MAY  ALSO BE APPLIED TO THE PAYMENT OF THE OUTSTANDING BONDS
OR NOTES TO BE SO REFUNDED BY PURCHASE, RETIREMENT OR REDEMPTION, AS THE
CASE MAY BE. AFTER THE TERMS OF THE ESCROW HAVE BEEN FULLY SATISFIED AND
CARRIED OUT, ANY BALANCE OF SUCH PROCEEDS AND INTEREST, IF  ANY,  EARNED
OR REALIZED ON THE INVESTMENTS THEREOF MAY BE RETURNED TO THE AGENCY FOR
USE  BY IT IN ANY LAWFUL MANNER. ALL SUCH BONDS OR NOTES SHALL BE ISSUED
AND SECURED AND SHALL BE SUBJECT TO THE PROVISIONS OF LAW  IN  THE  SAME
MANNER  AND TO THE SAME EXTENT AS ANY OTHER BONDS OR NOTES ISSUED PURSU-
ANT TO LAW.
  7. WHETHER OR NOT THE BONDS AND NOTES ARE OF SUCH FORM  AND  CHARACTER
AS  TO  BE NEGOTIABLE INSTRUMENTS UNDER THE TERMS OF THE UNIFORM COMMER-
CIAL CODE, THE BONDS AND NOTES ARE HEREBY  MADE  NEGOTIABLE  INSTRUMENTS
WITHIN THE MEANING OF AND FOR ALL THE PURPOSES OF THE UNIFORM COMMERCIAL
CODE,  SUBJECT  ONLY TO THE PROVISIONS OF THE BONDS AND NOTES FOR REGIS-
TRATION.

A. 890                              4

  8. ANY RESOLUTION OR RESOLUTIONS AUTHORIZING ANY BONDS OR NOTES PURSU-
ANT TO THE PROVISIONS OF THIS ARTICLE MAY CONTAIN PROVISIONS  WHICH  MAY
BE  A  PART  OF THE CONTRACT WITH THE HOLDERS OF SUCH BONDS OR NOTES, AS
TO: (A) PLEDGING OR CREATING A LIEN, TO  THE  EXTENT  PROVIDED  BY  SUCH
RESOLUTION  OR  RESOLUTIONS,  ON  ALL  OR ANY PART OF ANY MONEYS HELD IN
TRUST OR OTHERWISE BY OTHERS FOR THE PAYMENT OF SUCH BONDS OR NOTES; (B)
THE SETTING ASIDE OF RESERVES OR SINKING FUNDS  AND  THE  REGULATION  OR
DISPOSITION  THEREOF;  (C)  LIMITATIONS  ON  THE  PURPOSE  TO  WHICH THE
PROCEEDS OF SALE OF ANY ISSUE OF SUCH BONDS OR NOTES THEN OR  THEREAFTER
TO  BE  ISSUED  MAY BE APPLIED; (D) LIMITATIONS ON THE ISSUANCE OF ADDI-
TIONAL BONDS OR NOTES, THE TERMS UPON WHICH ADDITIONAL  BONDS  OR  NOTES
MAY  BE  ISSUED  AND  SECURED,  AND UPON THE REFUNDING OF OUTSTANDING OR
OTHER BONDS OR NOTES; (E) THE PROCEDURE, IF ANY, BY WHICH THE  TERMS  OF
ANY  CONTRACT WITH THE HOLDERS OF BONDS OR NOTES MAY BE AMENDED OR ABRO-
GATED, THE AMOUNT OF BONDS OR NOTES THE HOLDERS OF  WHICH  MUST  CONSENT
THERETO AND THE MANNER IN WHICH SUCH CONSENT MAY BE GIVEN; (F) PROVIDING
FOR  THE  RIGHTS  AND  REMEDIES  OF THE HOLDERS OF BONDS OR NOTES IN THE
EVENT OF DEFAULT, PROVIDING, HOWEVER,  THAT  SUCH  RIGHTS  AND  REMEDIES
SHALL  NOT  BE INCONSISTENT WITH THE GENERAL LAWS OF THIS STATE; AND (G)
ANY OTHER MATTERS OF LIKE OR  DIFFERENT  CHARACTER,  WHICH  IN  ANY  WAY
AFFECT  THE SECURITY AND PROTECTION OF THE BONDS OR NOTES AND THE RIGHTS
OF THE HOLDERS THEREOF.
  S 1115-F. ADOPTION OF REGULATIONS. THE AGENCY SHALL ADOPT  REGULATIONS
PROVIDING  FOR FINANCIAL QUALIFICATIONS OF ELIGIBLE FAMILIES OR PERSONS,
REQUIREMENTS AND LIMITATIONS  AS TO ADJUSTMENTS OF TERMS AND  CONDITIONS
OF  REPAYMENT,  FUNDING PRIORITIES AND ANY ADDITIONAL REQUIREMENTS AS IT
DEEMS NECESSARY TO CARRY OUT THE PURPOSES OF THIS ARTICLE.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.