BILL NUMBER:  S7413A

 TITLE OF BILL :

An act to amend the private housing finance law and the public
authorities law, in relation to providing an increase in bond and note
authorization

 PURPOSE OF THE BILL :

This bill increases the bonding authority of the New York State
Housing Finance Agency ("HFA") by $2.5 billion to a maximum aggregate
of $24.2 billion. This bill also increases the taxable bonding
authority of the State of New York Mortgage Agency ("SONYMA") by $200
million to a maximum aggregate of $1 billion. HFA has expanded its use
of its bonding authority to encompass new construction and
rehabilitation of housing to ensure continued availability of
affordable housing. This expansion requires increasing HFA's bonding
authority. SONYMA's taxable bonding authority limits needs to be
increased to accommodate its new special mortgage program (or
successor programs) aimed at buyers purchasing properties in
neighborhoods severely impacted by the foreclosure crisis along with
the continuing need to fund its other programs. The bill also
establishes new maximum income limit provisions in the SONYMA statute
to be applicable to the special mortgage program (or successor
programs):
              

 SUMMARY OF PROVISIONS :

Section 1 of the bill increases the HFA bonding authority by $2.5
billion to a maximum aggregate of $24.2 billion.

Section 2 of the bill increases the SONYMA taxable bonding authority
by $200 million to a maximum aggregate of $1 billion and establishes
new income limits applicable to mortgage loans purchased with the
proceeds of taxable bonds for the neighborhood revitalization program
(and successor programs).

Section 3 of the bill would make it effective immediately.

 PRIOR LEGISLATIVE HISTORY :

Chapter 85 of the Laws of 2015

 STATEMENT IN SUPPORT :

1) HFA:

This bill would increase the maximum amount of new money bonds which
HFA is authorized to issue. The Agency currently has a substantial
pipeline of financing requests that will result in both the creation
and preservation of affordable housing across New York State. The bill
would increase HFA's authority to issue bonds by $2.5 billion for a
maximum aggregate of $24.2 billion, which will enable the Agency to
continue to meet the housing demands of New Yorkers, as well as help
create jobs and provide economic stimulus.

In 2013, HFA, as part of Governor Cuomo's House New York initiative,
acquired a portfolio of Mitchell Lama projects previously owned and
managed by ESD. The goal of the acquisition was to grant - authority
to the State's housing finance agency, HFA, to refinance, modernize
and refurbish this portfolio of affordable housing properties to
ensure their continued availability as affordable housing, and to
better the lives of the New Yorkers residing in those properties.


Since the acquisition in July of 2013, HFA has refinanced, through the
issuance of tax-exempt bonds, 17 of these properties and expects to
complete the refinancing of the portfolio by 2018. These activities,
plus the continued active involvement of HFA in the capital markets
through the issuance of tax-exempt and taxable bonds to finance the
production and rehabilitation of affordable housing under its
Affordable Housing Revenue Bond Resolution and its 80/20 program, have
resulted in increased use of its bonding authority. Since 2013, HFA
has issued over $4.6BN of bonds. In 2015 alone, HFA expects to issue
over $2.1BN of bonds.

2) SONYMA:

SONYMA is launching its new Neighborhood Revitalization Program to
stimulate homeownership in areas hard hit by the foreclosure crisis.
The program will offer competitive mortgages and other incentives to
encourage homebuyers to move into and help stabilize these
communities. To accommodate a broader group of eligible purchasers,
SONYMA is offering this program to first time homebuyers as otherwise
required in its other programs financed by tax-exempt bonds.

In addition to this new and targeted use of SONYMA's taxable bonding
authority, SONYMA expects to continue to issue taxable bonds as it did
in October 2015 to make up for the reduced availability of Federal
Volume Cap for tax-exempt bonds in New York State. The combination of
these two factors make it crucial that the current taxable limit of
$800 million (of which SONYMA has used approximately $600 million) be
increased.

The current legislation authorizing SONYMA to issue taxable bonds sets
forth income limits with respect to the mortgage loans to be financed
with proceeds thereof. One-third of the total principal amount of
mortgages authorized to be so financed cannot not exceed one hundred
twenty-five percent of the latest maximum income limits permitted
under the Internal Revenue Code of 1986, as amended, for mortgagors
financed by mortgage revenue bonds; one third cannot exceed one
hundred thirty-five percent of such income limits; and the last third
of such principal amount authorized to be so financed, cannot exceed
one hundred fifty percent of such limits. These limitations have the
unintended result of limiting the ability of SONYMA to use taxable
bonds (not limited by the IRS limits on tax-exempt bonds) to assist
moderate income New Yorkers that need programs such as the one
described above. The proposed amendment would set one limit applicable
to all mortgage loans financed with SONYMA taxable bonds:  in
connection with the new program (or successor programs) and leave the
existing limits for any other taxable bond issue. The limit for the
new program is set at one-hundred fifty percent of the latest maximum
income limits permitted under the Internal Revenue Code of 1986, as
amended.

 LOCAL IMPACT :

This bill would have no impact on local governments.

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This bill would take effect immediately.