Assembly Bill A2770

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

                                  2770

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            January 17, 2013
                               ___________

Introduced  by  M. of A. WRIGHT -- Multi-Sponsored by -- M. of A. CURRAN
  -- read once and referred to the Committee on Housing

AN ACT to amend the public housing law, in relation to creating  a  home
  ownership assistance program

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

  Section 1. The public housing law is amended by adding a new article 9
to read as follows:
                               ARTICLE IX
                    HOME OWNERSHIP ASSISTANCE PROGRAM
SECTION 170. DEFINITIONS.
        171. HOME OWNERSHIP ASSISTANCE PROGRAM.
        172. APPLICABILITY OF THE PROGRAM.
        173. AMOUNT  AND  PROCEDURE  FOR   HOME   OWNERSHIP   ASSISTANCE
               PAYMENTS.
        174. TERMS OF ASSISTANCE FOR NOT-FOR-PROFIT ORGANIZATIONS.
        175. RULES AND REGULATIONS.
        176. FUNDING FOR THE HOME OWNERSHIP ASSISTANCE PROGRAM.
  S  170. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  1. "DEPARTMENT" SHALL MEAN THE NEW YORK  CITY  DEPARTMENT  OF  HOUSING
PRESERVATION AND DEVELOPMENT.
  2. "ELIGIBLE UNIT" SHALL MEAN:
  A.    ANY (I) HOME WITH FOUR OR LESS UNITS; (II) CONDOMINIUM; OR (III)
COOPERATIVE;
  B. WHERE THE PURCHASE OF SUCH HOME,  CONDOMINIUM,  OR  COOPERATIVE  IS
PROVIDED FOR, INSURED, OR GUARANTEED BY THE STATE OR FEDERAL GOVERNMENT.
  3.  "QUALIFIED  HOUSEHOLD"  SHALL MEAN ANY PERSON OR HIS OR HER FAMILY
MEMBER WHO:
  A. (I) HAS AN ANNUAL HOUSEHOLD INCOME  UNDER  EIGHTY  PERCENT  OF  THE
MEDIAN POVERTY LEVEL, PROVIDED, THAT ANY ASSISTANCE RECEIVED AS A RESULT

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00731-01-3
              

A. 2770                             2

OF A SOCIAL PROGRAM SHALL NOT BE CONSIDERED WHEN CALCULATING AN INDIVID-
UAL'S  GROSS INCOME.   THE DEPARTMENT SHALL DETERMINE INCOME ELIGIBILITY
OF HOME BUYERS USING THE INCOME DETERMINATION  METHODOLOGY  UTILIZED  BY
THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT IN ACCORD-
ANCE WITH THEIR SECTION 8 HOUSING PROGRAM; OR
  (II) IS OVER THE AGE OF SIXTY-FIVE; OR
  (III)  IS  DIAGNOSED  BY  A LICENSED PHYSICIAN TO BE MENTALLY OR PHYS-
ICALLY DISABLED;
  B.  DOES NOT CURRENTLY OWN A HOUSING UNIT IN THE CITY OF NEW  YORK  OR
ANY  OTHER  LOCATION, INCLUDING A SINGLE FAMILY HOUSE, CONDOMINIUM UNIT,
COOPERATIVE UNIT, OR RENTAL UNIT THAT COULD BE OWNER OCCUPIED;
  C. HAS NOT PREVIOUSLY  RECEIVED  HOME  OWNERSHIP  ASSISTANCE  PAYMENTS
PURSUANT TO THIS ARTICLE; AND
  D.  IS CURRENTLY EMPLOYED AND HAS BEEN GAINFULLY EMPLOYED FOR AT LEAST
TWELVE MONTHS PRIOR TO HIS OR HER APPLICATION FOR HOME OWNERSHIP ASSIST-
ANCE PAYMENTS, EXCEPT THAT THIS PARAGRAPH SHALL NOT APPLY TO AN INDIVID-
UAL WHO QUALIFIES PURSUANT TO SUBPARAGRAPH (II) OR (III) OF PARAGRAPH  A
OF THIS SUBDIVISION.
  4.  "QUALIFIED NOT-FOR-PROFIT ORGANIZATION" SHALL MEAN AN ORGANIZATION
THAT  IS  TAX  EXEMPT  PURSUANT  TO SUBSECTION (C) OF SECTION 501 OF THE
INTERNAL REVENUE CODE AND WHOSE PURPOSE IS TO ASSIST  HOUSEHOLDS,  WHOSE
INCOME  IS  UNDER  EIGHTY  PERCENT  OF  THE  MEDIAN  POVERTY LEVEL, WITH
PURCHASING A HOME. SUCH ORGANIZATION MUST SHOW EXPERIENCE  AND  CAPACITY
TO  UNDERTAKE  A  PURCHASE FOR REHABILITATION AND TO RESELL TO QUALIFIED
HOUSEHOLDS AS DEFINED IN SUBDIVISION THREE OF THIS SECTION.
  S 171. HOME OWNERSHIP ASSISTANCE PROGRAM. 1.  THERE IS  HEREBY  ESTAB-
LISHED  A  HOME OWNERSHIP ASSISTANCE PROGRAM. THE PURPOSE OF THE PROGRAM
IS TO PROVIDE FINANCIAL ASSISTANCE TO LOW INCOME HOUSEHOLDS, WITH ANNUAL
INCOMES UNDER EIGHTY PERCENT OF THE MEDIAN  POVERTY  LEVEL  WHO  DO  NOT
CURRENTLY OWN A HOME, TO PURCHASE AN ELIGIBLE UNIT FOR PURPOSES OF REHA-
BILITATION AND OWNERSHIP.
  2.  THE  MAXIMUM  PURCHASE  PRICE  SHALL BE THE SINGLE FAMILY MORTGAGE
LIMITS DEFINED UNDER 24 C.F.R. 203 AND SHALL BE  ADJUSTED  ACCORDING  TO
THE  ADJUSTMENTS  MADE  BY  THE  UNITED STATES DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT.
  3. THE UNIT MAY NOT BE "OVERCROWDED" AS DEFINED IN THE HOUSING QUALITY
STANDARDS, WHICH ARE ISSUED BY THE UNITED STATES DEPARTMENT  OF  HOUSING
AND  URBAN  DEVELOPMENT. A SUFFICIENT NUMBER OF BEDROOMS ARE REQUIRED TO
PROVIDE ADEQUATE SLEEPING SPACE FOR ALL MEMBERS OF THE HOUSEHOLD.  THERE
MUST  BE  ONE BEDROOM FOR EVERY TWO MEMBERS OF THE FAMILY, PROVIDED THAT
CHILDREN OF THE OPPOSITE SEX MAY NOT SHARE A BEDROOM.
  4. MONTHLY HOME OWNERSHIP EXPENSES SHALL INCLUDE INTEREST ON THE MORT-
GAGE, MORTGAGE INSURANCE PREMIUMS, REAL  ESTATE  TAXES,  HOME  OWNERSHIP
INSURANCE,  AND  MAJOR  REPAIRS AND REPLACEMENTS. HOUSING EXPENSES AFTER
THE PURCHASE AND REHABILITATION OF A HOME MAY NOT EXCEED THIRTY  PERCENT
OF THE HOUSEHOLD'S GROSS MONTHLY INCOME.
  S  172.  APPLICABILITY  OF  THE PROGRAM. 1. A QUALIFIED HOUSEHOLD MUST
MAKE AN APPLICATION TO THE DEPARTMENT TO RECEIVE HOME OWNERSHIP  ASSIST-
ANCE PAYMENTS.
  2.  THE  DEPARTMENT  SHALL  APPROVE  AN INDIVIDUAL'S APPLICATION IF IT
FINDS THAT:
  A. SUCH INDIVIDUAL IS PART OF A  QUALIFIED  HOUSEHOLD  AS  DEFINED  IN
SUBDIVISION THREE OF SECTION ONE HUNDRED SEVENTY OF THIS ARTICLE;
  B.  THE  HOME TO BE PURCHASED BY THE INDIVIDUAL IS AN ELIGIBLE UNIT AS
DEFINED IN SUBDIVISION TWO OF SECTION ONE HUNDRED SEVENTY OF THIS  ARTI-
CLE;

A. 2770                             3

  C.  THE  HOME  TO  BE  PURCHASED  HAS  BEEN  INSPECTED BY A DEPARTMENT
APPROVED HOME INSPECTOR;
  D.  THE  HOME  TO  BE  PURCHASED HAS BEEN APPRAISED AT A VALUE NEAR OR
ABOVE THE MAXIMUM PURCHASE  PRICE  AS  DEFINED  IN  SUBDIVISION  TWO  OF
SECTION  ONE HUNDRED SEVENTY-ONE OF THIS ARTICLE.  IF THE PURCHASE PRICE
EXCEEDS THE MAXIMUM PURCHASE PRICE, THE ELIGIBLE HOUSEHOLD MUST PAY  THE
DIFFERENCE. THE ELIGIBLE HOUSEHOLD MUST GIVE THE FUNDS TO THE DEPARTMENT
AT  THE CLOSING. THE DEPARTMENT WILL HOLD THE FUNDS IN AN INTEREST BEAR-
ING ESCROW ACCOUNT AND MAKE PAYMENTS FROM SUCH ACCOUNT AS NECESSARY. ALL
ELIGIBLE HOUSEHOLD FUNDS MUST BE  EXPENDED  BEFORE  ANY  HOME  OWNERSHIP
ASSISTANCE PROGRAM PAYMENTS MAY BE MADE.
  3.  UPON APPROVAL OF THE INDIVIDUAL'S APPLICATION, THE INDIVIDUAL MUST
ATTEND HOME  OWNERSHIP  ASSISTANCE  COUNSELING.  SUCH  COUNSELING  SHALL
INCLUDE, BUT NEED NOT BE LIMITED TO:
  A. HOME MAINTENANCE;
  B. BUDGETING AND MONEY MANAGEMENT;
  C. CREDIT COUNSELING; AND
  D.  HOW  TO OBTAIN HOME OWNERSHIP FINANCING, INCLUDING HOW TO IDENTIFY
AND AVOID LOANS WITH OPPRESSIVE TERMS AND CONDITIONS.
  4. UPON COMPLETION OF THE HOME OWNERSHIP COUNSELING PURSUANT TO SUBDI-
VISION THREE OF THIS SECTION, THE DEPARTMENT SHALL MAKE  HOME  OWNERSHIP
ASSISTANCE PAYMENTS IN ACCORDANCE WITH SECTION ONE HUNDRED SEVENTY-THREE
OF THIS ARTICLE.
  5. THE REFINANCING OF A HOME THAT IS A BASIS FOR RECEIVING HOME OWNER-
SHIP  ASSISTANCE  PAYMENTS  SHALL  AUTOMATICALLY  CAUSE SUCH PAYMENTS TO
CEASE AND BE TERMINATED.
  6. IF ANY QUALIFIED HOUSEHOLD THAT HAS BEEN APPROVED AND IS  RECEIVING
HOME  OWNERSHIP  ASSISTANCE  PAYMENTS  DEFAULTS ON ITS MORTGAGE PAYMENT,
SUCH HOME OWNERSHIP ASSISTANCE PAYMENTS SHALL AUTOMATICALLY CEASE AND BE
TERMINATED.
  S 173. AMOUNT AND PROCEDURE FOR HOME  OWNERSHIP  ASSISTANCE  PAYMENTS.
1.  THE MAXIMUM FINANCIAL ASSISTANCE UNDER THE HOME OWNERSHIP ASSISTANCE
PROGRAM FOR ELIGIBLE HOUSEHOLDS SHALL  NOT  EXCEED  THE  TOTAL  COST  OF
ACQUISITION AND REHABILITATION. THE ASSISTANCE PROVIDED FOR THE PURCHASE
OF  THE  PROPERTY  SHALL BE A PRORATED LOAN. THE DEPARTMENT WILL PLACE A
MORTGAGE ON THE PROPERTY TO SECURE THE LOAN. THE MORTGAGEE MAY BE SUBOR-
DINATED TO ANY OTHER MORTGAGEE APPROVED BY THE DEPARTMENT THAT IS  PRES-
ENTLY ON OR THAT MAY BE PLACED ON THE PROPERTY.
  THE  DEPARTMENT  SHALL  HAVE  THE RIGHT TO DETERMINE WHETHER OR NOT AN
IMPROVEMENT QUALIFIES AS CAPITAL IMPROVEMENTS. PRIOR TO THE COMMENCEMENT
OF CAPITAL IMPROVEMENTS, THE PROPERTY OWNER MUST NOTIFY  THE  DEPARTMENT
AND  PROVIDE  A  COST  ESTIMATE.  THE DEPARTMENT SHALL HAVE THE RIGHT TO
INSPECT THE PROPERTY PRIOR TO AND UPON COMPLETION OF  CONSTRUCTION.  THE
PROPERTY OWNER MUST PROVIDE DOCUMENTATION OF ALL WORK PERFORMED.
  2.  THE MAXIMUM ASSISTANCE FOR QUALIFIED NOT-FOR-PROFIT ORGANIZATIONS,
AS DEFINED IN SUBDIVISION FOUR OF SECTION ONE HUNDRED  SEVENTY  OF  THIS
ARTICLE, MAY NOT EXCEED TWENTY THOUSAND DOLLARS PER BUILDING.
  3. THE PROPERTY MAY BE SOLD SUBJECT TO THE FOLLOWING CONDITIONS:
  A. THE MAXIMUM SALE PRICE WILL BE DETERMINED BY THE FOLLOWING FORMULA:
THE ORIGINAL SUBSIDIZED PRICE OF THE HOME MULTIPLIED BY A FRACTION WHERE
THE NUMERATOR IS THE MEDIAN INCOME FOR A FAMILY OF FOUR IN NEW YORK CITY
IN  THE  YEAR  OF  THE  RESALE  AND THE DENOMINATOR IS THE CORRESPONDING
FIGURE FOR THE YEAR THE PROPERTY WAS PURCHASED. BOTH  NUMBERS  SHALL  BE
DETERMINED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOP-
MENT.

A. 2770                             4

  B.  THE  OWNER'S  DOWN  PAYMENT  AND  THE  VALUE OF QUALIFYING CAPITAL
IMPROVEMENTS MAY BE  ADDED  TO  THE  MAXIMUM  RESALE  PRICE.  QUALIFYING
IMPROVEMENTS ARE THOSE DEFINED AND APPLIED BY THE NEW YORK STATE DEPART-
MENT  OF  TAXATION AND FINANCE THAT DO NOT CONSTITUTE UNAFFORDABLE LUXU-
RIES  DEFINED  AS ITEMS NOT NORMALLY CONSIDERED A NECESSARY OR CUSTOMARY
PART OF A RESIDENCE IN  THE  SURROUNDING  NEIGHBORHOOD.  THE  DEPARTMENT
SHALL  HAVE  THE RIGHT TO DETERMINE WHETHER OR NOT AN IMPROVEMENT QUALI-
FIES AS CAPITAL IMPROVEMENTS.  PRIOR  TO  THE  COMMENCEMENT  OF  CAPITAL
IMPROVEMENTS,  THE PROPERTY OWNER MUST NOTIFY THE DEPARTMENT AND PROVIDE
A COST ESTIMATE. THE DEPARTMENT SHALL HAVE  THE  RIGHT  TO  INSPECT  THE
PROPERTY  PRIOR  TO  AND  UPON  COMPLETION OF CONSTRUCTION. THE PROPERTY
OWNER MUST PROVIDE DOCUMENTATION OF ALL WORK PERFORMED.
  S 174. TERMS OF ASSISTANCE FOR NOT-FOR-PROFIT ORGANIZATIONS. FINANCIAL
ASSISTANCE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-THREE OF THIS ARTI-
CLE MAY BE PROVIDED TO NOT-FOR-PROFIT ORGANIZATIONS FOR THE  PURPOSE  OF
RESALE  TO  QUALIFIED  HOUSEHOLDS  AS  DEFINED  IN  SUBDIVISION THREE OF
SECTION ONE HUNDRED SEVENTY OF THIS ARTICLE.
  1. THE NOT-FOR-PROFIT ORGANIZATION MAY MANAGE THE PROPERTY  DURING  AN
INTERIM  PERIOD UNDER A "LEASE TO OWN" PROGRAM BEFORE TRANSFERRING TITLE
TO THE PROPERTY AND MUST SUBMIT COMPLETE DEVELOPMENT AND OPERATING BUDG-
ETS FOR THE INTERIM TO THE DEPARTMENT.
  A. AN ELIGIBLE "LEASE TO OWN" PURCHASER MUST BE LOCATED WITHIN  TWELVE
MONTHS FROM PURCHASE BY THE NOT-FOR-PROFIT ORGANIZATION.
  B. THE INITIAL OCCUPANT OF THE OWNER'S UNIT, WHETHER A TENANT DURING A
RENTAL  AGREEMENT,  TENANT  DURING A LEASE TO OWN PERIOD, OR HOME BUYER,
MUST QUALIFY AS AN ELIGIBLE HOUSEHOLD. FIFTY-ONE PERCENT  OF  THE  UNITS
MUST  BE  OCCUPIED  AT  INITIAL  OCCUPANCY BY HOUSEHOLDS WHOSE HOUSEHOLD
INCOME IS LESS THAN EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL.
  C. RENT, INCLUDING UTILITIES, FOR  A  HOUSEHOLD  WHERE  THE  HOUSEHOLD
INCOME  IS  BETWEEN FIFTY AND EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL
CANNOT EXCEED THIRTY PERCENT OF THE HOUSEHOLD MONTHLY INCOME. IF TENANTS
PAY UTILITIES, THE RENT SHALL BE ADJUSTED BY THE AMOUNT  OF  THE  UTILI-
TIES.
  D.  NOT-FOR-PROFIT ORGANIZATIONS MUST SUBMIT A PROPOSED RESALE PROCESS
OR FORMULA FOR DEPARTMENTAL REVIEW AND APPROVAL.
  E.  IN  ALL  CASES,  TRANSFER  OF  TITLE  TO  THE  PROPERTY  FROM  THE
NOT-FOR-PROFIT  ORGANIZATION  TO  AN  ELIGIBLE HOUSEHOLD MUST TAKE PLACE
WITHIN FIVE YEARS FROM PURCHASE BY THE NOT-FOR-PROFIT ORGANIZATION.
  F. IF THE NOT-FOR-PROFIT ORGANIZATION FAILS TO MEET  THESE  DEADLINES,
THE  DEFERRED  LOAN  SHALL BE DUE AND PAYABLE WITH ACCRUED INTEREST AT A
RATE OF FOUR PERCENT.
  S 175. RULES AND REGULATIONS.  1.  THE  DEPARTMENT  IS  AUTHORIZED  TO
IMPLEMENT  ANY RULE OR REGULATION NECESSARY FOR THE SUCCESSFUL IMPLEMEN-
TATION OF THIS PROGRAM.
  2. THE DEPARTMENT MAY CREATE ANY FORM AND  REQUIRE  ANY  APPLICANT  TO
FILL  OUT  SUCH FORM BEFORE RECEIVING DEPARTMENTAL APPROVAL FOR THE HOME
OWNERSHIP ASSISTANCE PAYMENTS.
  3. THE DEPARTMENT MAY CHARGE AN APPLICATION FEE FOR THE PROCESSING  OF
A  HOUSEHOLD'S  HOME  OWNERSHIP ASSISTANCE PAYMENT APPLICATION. SUCH FEE
SHALL NOT EXCEED ONE HUNDRED DOLLARS.
  S 176.  FUNDING FOR THE HOME  OWNERSHIP  ASSISTANCE  PROGRAM.  FUNDING
SHALL  BE  OBTAINED  BY USING FUNDS FROM THE COMMUNITY DEVELOPMENT BLOCK
GRANT AND THE NEW YORK STATE HOME PROGRAM.  TWO  PERCENT  OF  THE  TOTAL
AMOUNT  OF  EACH, RESPECTIVELY, SHALL BE USED TO FUND THE HOME OWNERSHIP
ASSISTANCE PROGRAM.

A. 2770                             5

  S 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
necessary  for  the  timely  implementation of this act on its effective
date  is  hereby  authorized  and  directed to be made on or before such
effective date.