S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3669--A
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 28, 2021
                                ___________
 
 Introduced  by M. of A. CYMBROWITZ, EPSTEIN -- read once and referred to
   the Committee on Housing -- reported and referred to the Committee  on
   Ways   and  Means  --  committee  discharged,  bill  amended,  ordered
   reprinted as amended and recommitted to said committee
 
 AN ACT to amend the general municipal law, the local  finance  law,  and
   the  private  housing finance law, in relation to the modernization of
   affordable  housing  financing  authorities;  and  to  repeal  certain
   provisions of the private housing finance law relating thereto
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  Paragraphs a, c and g of subdivision 1 of section 696-a of
 the general municipal law, as amended by chapter  320  of  the  laws  of
 1999, are amended to read as follows:
   a.  Notwithstanding  the  provisions  of any general, special or local
 law, an agency is hereby authorized to make or contract to  make  grants
 or  loans to the owner of any property that is part of an urban develop-
 ment action area project for the purpose of  (i)  rehabilitation  of  an
 existing  private or multiple dwelling, (ii) providing site improvements
 WITHIN THE URBAN DEVELOPMENT ACTION AREA IN WHICH THE URBAN  DEVELOPMENT
 ACTION AREA PROJECT IS LOCATED, including, but not limited to, water and
 sewer  facilities, sidewalks, landscaping, PARKS AND OPEN SPACE, SOCIAL,
 RECREATIONAL, COMMUNAL AND  OTHER  NON-RESIDENTIAL  FACILITIES  AND  THE
 OUTFITTING  THEREOF,  the  curing  of  problems  caused by abnormal site
 conditions, excavation and construction of footings and foundations  and
 other  improvements  associated with the provision of infrastructure, or
 (iii) providing for other costs of construction for the  development  of
 private and multiple dwelling housing accommodations.
   c. Any loan made in accordance with this section shall be secured by a
 note  and  mortgage  upon the property, OR ANY PORTION OF SUCH PROPERTY,
 improved or, in the case of a condominium, a note and mortgage upon each
 of the housing accommodations aided by such loan, or in the  case  of  a
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06664-09-2
              

 A. 3669--A                          2
 
 cooperative  housing  corporation, a note and mortgage upon the economic
 interest in such corporation of each tenant-shareholder  aided  by  such
 loan,  or  upon the property, OR ANY PORTION OF SUCH PROPERTY, improved,
 or upon both such economic interest or property; provided, however, that
 all  or  part  of any such loan may be unsecured if necessary to satisfy
 the requirements of any participating lender. Such loan shall be  repaid
 over such period as the agency shall determine.
   g. For purposes of this section, (I) the term "mortgage" shall include
 any  pledge or assignment of shares or assignment of a proprietary lease
 in a cooperative housing corporation where such pledge or assignment  is
 intended  as  security  for  the  performance of an obligation and which
 imposes a lien on or affects title to such shares  or  such  proprietary
 lease;  AND (II) THE TERM "OWNER" SHALL MEAN AN INDIVIDUAL, PARTNERSHIP,
 CORPORATION OR OTHER ENTITY, INCLUDING A NON-PROFIT  COMPANY,  A  MUTUAL
 COMPANY, OR A HOUSING DEVELOPMENT FUND COMPANY, HAVING RECORD OR BENEFI-
 CIAL  TITLE IN FEE SIMPLE TO REAL PROPERTY OR THE LESSEE THEREOF UNDER A
 LEASE HAVING A TERM OF AT LEAST FORTY-NINE YEARS.
   § 2. Section 696-a of the general municipal law, as amended by chapter
 465 of the laws of 1993, is amended to read as follows:
   § 696-a. Loans. Notwithstanding the provisions of any general, special
 or local law, an agency is hereby authorized to make or contract to make
 grants or loans[: (i)] to the owner of any property that is part  of  an
 urban  development action area project for the purpose of: (I) rehabili-
 tation of an existing  private  or  multiple  dwelling,  (ii)  [for  the
 purpose  of]  providing  site  improvements WITHIN THE URBAN DEVELOPMENT
 ACTION AREA IN WHICH  THE  URBAN  DEVELOPMENT  ACTION  AREA  PROJECT  IS
 LOCATED,  including,  but  not  limited  to, water and sewer facilities,
 sidewalks, landscaping, PARKS  AND  OPEN  SPACE,  SOCIAL,  RECREATIONAL,
 COMMUNAL  AND OTHER NON-RESIDENTIAL FACILITIES AND THE OUTFITTING THERE-
 OF, the curing of problems caused by  abnormal  site  conditions,  exca-
 vation  and  construction of footings and foundations and other improve-
 ments associated with the provision of infrastructure, or (iii) [for the
 purpose of] providing for other costs of construction for  the  develop-
 ment  of  private  and  multiple dwelling housing accommodations. In the
 case of a grant made under this section for  the  rehabilitation  of  an
 existing  multiple dwelling intended to be converted to a condominium or
 cooperative form of ownership or for the development of one to four unit
 housing accommodations or a condominium or  cooperative  housing  corpo-
 ration,  such grant shall require a regulatory agreement with the agency
 limiting profits. Any loan made in accordance with this section shall be
 secured by a note and mortgage upon the property, OR ANY PORTION OF SUCH
 PROPERTY, improved or, in the case of a condominium, a note and mortgage
 upon each of the housing accommodations aided by such loan,  or  in  the
 case  of a cooperative housing corporation, a note and mortgage upon the
 economic interest in such corporation of each  tenant-shareholder  aided
 by  such  loan,  or  upon the property, OR ANY PORTION OF SUCH PROPERTY,
 improved, or upon both such economic  interest  or  property;  PROVIDED,
 HOWEVER, THAT ALL OR PART OF ANY SUCH LOAN MAY BE UNSECURED IF NECESSARY
 TO  SATISFY  THE  REQUIREMENTS  OF ANY PARTICIPATING LENDER.   Such loan
 shall be repaid over such period as the agency shall determine.  In  the
 case  of  a  loan  for  rehabilitation  of an existing multiple dwelling
 intended to be converted to a condominium or cooperative form of  owner-
 ship  or a loan for the provision of infrastructure or for the provision
 of other costs of construction for the development of one to  four  unit
 housing  accommodations  or  a condominium or cooperative housing corpo-
 ration, such note and mortgage may provide that the loan shall  automat-
 A. 3669--A                          3
 
 ically  be reduced to zero over a period of owner-occupancy of the hous-
 ing accommodations assisted by such loan. In the case of a grant or loan
 made under this section for the purpose of providing rental housing  for
 persons  of  low income as defined in section two of the private housing
 finance law, such loan or grant shall  require  a  regulatory  agreement
 with  the  agency limiting profits and rentals charged. In the case of a
 loan made under this section for the purpose of providing rental housing
 for persons of low income as defined in section two of the private hous-
 ing finance law, such note and mortgage may provide that the loan  shall
 automatically  be reduced to zero over a period of up to thirty years of
 compliance by the owner with a  regulatory  agreement  with  the  agency
 limiting  profits and rentals charged. The repayment of any loan made in
 accordance with this section shall be made in  such  manner  as  may  be
 provided in such note and mortgage in connection with such loan, and may
 authorize the owner, with the consent of the agency, to prepay the prin-
 cipal  of  the  loan  subject  to  such  terms and conditions as therein
 provided. Such note and mortgage may contain such other terms and condi-
 tions not inconsistent with the provisions of this article as the agency
 may deem necessary  or  desirable  to  carrying  out  the  purposes  and
 provisions  of  this  article  including, but not limited to, provisions
 concerning the repayment of the loan, the interest, if any, thereon, and
 other charges in connection therewith. For purposes of this section, (1)
 the term "mortgage" shall include any pledge or assignment of shares  or
 assignment  of  a proprietary lease in a cooperative housing corporation
 where such pledge or assignment is intended as security for the perform-
 ance of an obligation and which imposes a lien on or  affects  title  to
 such  shares  or  such proprietary lease; AND (2) THE TERM "OWNER" SHALL
 MEAN AN INDIVIDUAL, PARTNERSHIP, CORPORATION OR OTHER ENTITY,  INCLUDING
 A  NON-PROFIT  COMPANY,  A MUTUAL COMPANY, OR A HOUSING DEVELOPMENT FUND
 COMPANY, HAVING RECORD OR BENEFICIAL TITLE IN FEE SIMPLE TO REAL PROPER-
 TY OR THE LESSEE THEREOF UNDER A LEASE HAVING A TERM OF AT LEAST  FORTY-
 NINE YEARS.
   §  3.    The  general municipal law is amended by adding a new section
 696-e to read as follows:
   § 696-E. SERVICING.  AN AGENCY MAY MAKE PROVISION FOR THE  PERFORMANCE
 OF LOAN OR GRANT SERVICING FUNCTIONS, INCLUDING BUT NOT LIMITED TO FUNC-
 TIONS  RELATED  TO LENDING OR PROVIDING A GRANT FOR CONSTRUCTION, AS MAY
 GENERALLY BE PERFORMED BY AN INSTITUTIONAL LENDER. SUCH AGENCY  MAY  ACT
 IN SUCH CAPACITY OR APPOINT OR CONSENT TO THE APPOINTMENT OF A FINANCIAL
 INSTITUTION  OR OTHER QUALIFIED ENTITY, AS DETERMINED BY SUCH AGENCY, TO
 ACT IN SUCH CAPACITY ON BEHALF OF SUCH AGENCY. SUCH AGENCY IS AUTHORIZED
 TO PAY A REASONABLE AND CUSTOMARY FEE TO SUCH FINANCIAL  INSTITUTION  OR
 OTHER QUALIFIED ENTITY FOR THE PERFORMANCE OF SUCH SERVICES.
   §  4.  Subdivision  41  of  paragraph  a of section 11.00 of the local
 finance law, as amended by chapter 400 of the laws of 1994,  is  amended
 to read as follows:
   41.  Housing.  The  effectuating  of any of the purposes of the public
 housing law, other than making loans to limited profit housing companies
 pursuant to article two of the private housing finance  law,  and  other
 than making loans to owners of existing multiple dwellings, fifty years;
 bonds issued by a housing authority pursuant to section forty-one of the
 public  housing law and guaranteed by a municipality pursuant to section
 ninety-five of the public housing law, five years, in  addition  to  the
 foregoing  period  of  fifty  years,  for  the  temporary financing of a
 project prior to the permanent financing thereof; evidences  of  indebt-
 edness  issued  to the state pursuant to paragraph c of section 20.00 of
 A. 3669--A                          4
 
 this chapter, three years, in addition to the foregoing period of  fifty
 years  for  the  temporary financing of a project prior to the permanent
 financing thereof; loans to limited profit housing companies pursuant to
 article  two of the private housing finance law, fifty-five years; loans
 OR GRANTS to owners of existing private or multiple dwellings, NON-RESI-
 DENTIAL PROPERTY, OR VACANT LAND pursuant to the provisions  of  article
 eight,  article  eight-A,  article  eight-B,  article  eleven or article
 fifteen  of  the  private  housing  finance  law,  or  loans   for   the
 construction  of  multiple  dwellings  pursuant to article eleven of the
 private housing finance law, or loans OR GRANTS for the  pre-development
 costs or construction of private or multiple dwellings pursuant to arti-
 cle twenty-two of the private housing finance law, thirty years.
   § 5. Section 2 of the private housing finance law is amended by adding
 a new subdivision 30 to read as follows:
   30. "CLIMATE RESILIENCY IMPROVEMENTS." IMPROVEMENTS FOR THE PURPOSE OF
 PROTECTING  LAND OR ANY STRUCTURES THEREON FROM DAMAGE RESULTING FROM OR
 WHICH MAY RESULT FROM CHANGES IN CLIMATE, INCLUDING, BUT NOT LIMITED TO,
 EXTREME WEATHER EVENTS, ABNORMAL TEMPERATURES, AND SEA LEVEL RISE, OR OF
 REDUCING THE IMPACT OF THE  OPERATION  OF  SUCH  STRUCTURES  ON  CLIMATE
 CHANGE,  INCLUDING,  BUT NOT LIMITED TO, IMPROVEMENTS THAT REDUCE ENERGY
 CONSUMPTION OR PROMOTE THE EFFICIENT USE OF NATURAL RESOURCES.
   § 6. Section 400 of the private housing finance law is amended to read
 as follows:
   § 400. Policy and purposes of article.  It  is  hereby  declared  that
 there  exists  in  municipalities  in  this state a seriously inadequate
 supply of safe and sanitary  dwelling  accommodations  for  persons  and
 families  of low income; that such shortage constitutes an emergency and
 a grave menace to the health, safety, morals,  welfare  and  comfort  of
 citizens of this state; that there exists in such municipalities a large
 number  of multiple dwellings which are inadequate, unsafe or insanitary
 by reason of the absence of proper heating facilities or  by  reason  of
 the  necessity  for elimination of conditions dangerous to human life or
 detrimental to health, including  nuisances  as  defined[,]  in  section
 three  hundred nine of the multiple dwelling law, or for other rehabili-
 tation or improvement and which can be made adequate, safe and sanitary,
 by the installation of proper heating facilities or by  other  rehabili-
 tation, PRESERVATION or improvement or by the elimination of such condi-
 tions;  that such installation, rehabilitation, PRESERVATION or improve-
 ment cannot readily be provided by the  ordinary  unaided  operation  of
 private  enterprise  for  occupancy by persons or families of low income
 without public aid in the form of low interest loans OR GRANTS to owners
 of such multiple dwellings for the purpose of such  installation,  reha-
 bilitation, PRESERVATION or improvement; that the installation of proper
 heating  facilities  in such multiple dwellings or other rehabilitation,
 PRESERVATION or improvement thereof for  occupancy  by  persons  of  low
 income  as  defined in this article is a public use and a public purpose
 for which public money may be loaned OR GRANTED;  that  such  conditions
 require  the  provisions  hereinafter  enacted; and the necessity in the
 public  interest  for  the  provisions  hereinafter  enacted  is  hereby
 declared as a matter of legislative determination.
   §  7. Subdivision 3 of section 401 of the private housing finance law,
 paragraph a as amended by chapter 44 of the laws of 1976, and  paragraph
 b  as  amended by chapter 904 of the laws of 1962, is amended to read as
 follows:
   3. a. The term "persons or families of low income" shall mean "persons
 of low income" or "families of low income" as defined in section two  of
 A. 3669--A                          5
 
 this  chapter[, whose probable aggregate annual income during the period
 of occupancy does not exceed six times the rental (including  the  value
 or  cost  to  them  of  heat, light, water and cooking fuel) of dwelling
 units  occupied  by such persons or families in existing multiple dwell-
 ings aided by a loan pursuant to this article, except that in  the  case
 of  persons  or families with three or more dependents, such ratio shall
 not exceed seven to one, and except further that the income  limitations
 prescribed  by  this  paragraph  shall  be  subject to the provisions of
 subdivision two of section four hundred three of this article.
   In calculating annual income,  social  security  payments  and  income
 received from private pension funds by any person sixty-two years of age
 or  more  shall be excluded up to a total maximum amount of seventy-five
 dollars per month. The term "probable aggregate annual income" means the
 annual income of the chief wage earner of the  family,  plus  all  other
 income  of other members of the family over the age of twenty-one years,
 plus a proportion of income of gainfully employed members under the  age
 of  twenty-one years, the proportion to be determined by the agency. The
 agency may exclude a proportion of the income of other  members  of  the
 family  over  the age of twenty-one years for the purpose of determining
 eligibility for commencement of occupancy or continued occupancy, or for
 establishing rental of such family, or for all such purposes].
   b. Notwithstanding the provisions of paragraph a of this  subdivision,
 [and  subject  to  the  provisions  of subdivision three of section four
 hundred three of this article] the term  "persons  or  families  of  low
 income"  shall  also mean any person or family who, immediately prior to
 the date on which a contract for a loan  with  respect  to  an  existing
 multiple  dwelling  is  entered  into pursuant to the provisions of this
 article, occupies any dwelling unit in such multiple  dwelling  and  who
 continuously  occupies  such unit during and after completion of central
 heating or other rehabilitation or  improvement  performed  pursuant  to
 such  contract  provided, however, that any person or family required to
 remove from any such dwelling unit because of such  installation,  reha-
 bilitation  or  improvement  shall,  for the purpose of this section, be
 deemed to have continuously occupied such unit and shall have preference
 in re-entering such multiple dwelling upon completion of  the  aforesaid
 work.
   §  8. Subdivision 6 of section 401 of the private housing finance law,
 as added by chapter 505 of the laws of  1973,  is  amended  to  read  as
 follows:
   6.  The  term  "owner" shall mean a person having record OR BENEFICIAL
 title in fee simple to real property or the lessee thereof under a lease
 having an unexpired term of at least thirty years.
   § 9. Subdivision 1 of section 402 of the private housing finance  law,
 as  amended  by  chapter  808  of the laws of 1971, is amended and a new
 subdivision 1-a is added to read as follows:
   1. Notwithstanding the provisions of any  general,  special  or  local
 law,  a  municipality,  by  such  officer or agency as determined by its
 local legislative body, is hereby authorized:
   (A) to make or contract to make loans to the owners of existing multi-
 ple dwellings within its territorial limits, subject to the  limitations
 in  subdivision  two of this section, in such amounts as may be required
 for the installation of proper heating facilities, THE INCORPORATION  OF
 CLIMATE  RESILIENCY  IMPROVEMENTS or elimination of conditions dangerous
 to human life or detrimental to health, including nuisances  as  defined
 in  section  three  hundred  nine of the multiple dwelling law, or other
 rehabilitation, PRESERVATION or improvement of such multiple  dwellings,
 A. 3669--A                          6
 
 and  if  such  owner  acquires the multiple dwelling for the purposes of
 such rehabilitation, PRESERVATION or improvement or  owns  the  multiple
 dwelling  subject to an outstanding indebtedness, such loans MAY BE MADE
 EXCLUSIVELY  FOR  OR may include such amounts as may be required for the
 cost of such acquisition or for  the  refinancing  of  such  outstanding
 indebtedness, and may make temporary loans or advances to such owners in
 anticipation of the permanent municipal loans for such purposes[.]; AND
   (B) TO MAKE OR CONTRACT TO MAKE GRANTS TO ANY OWNER DESCRIBED IN PARA-
 GRAPH (A) OF THIS SUBDIVISION, ON THE SAME TERMS AS PERMITTED UNDER SUCH
 PARAGRAPH FOR A LOAN.
   1-A.  AS USED IN THIS ARTICLE, THE TERM "LOAN" SHALL INCLUDE ANY GRANT
 MADE BY A MUNICIPALITY PURSUANT TO THIS SECTION, PROVIDED, HOWEVER, THAT
 ANY  PROVISION  OF  THIS ARTICLE CONCERNING THE REPAYMENT OR FORGIVENESS
 OF, OR SECURITY FOR, A LOAN SHALL NOT APPLY TO ANY GRANT  MADE  PURSUANT
 TO THIS ARTICLE.
   §  10.  Subdivisions  2-a,  2-b, and 2-c of section 402 of the private
 housing finance law, subdivision 2-a as added by chapter 213 of the laws
 of 1975, subdivision 2-b as amended by chapter 362 of the laws of  2000,
 and  subdivision  2-c as amended by chapter 101 of the laws of 1994, are
 amended to read as follows:
   2-a. [As used in this section the term "value" shall mean the "as  is"
 value  of  the  multiple dwelling and the land upon which it is situated
 prior  to  such  installation,  elimination,  other  rehabilitation   or
 improvement  referred  to  in  subdivision  one of this section plus the
 total of all costs of such installation, elimination, rehabilitation  or
 improvement  including,  but  not  limited  to,  the costs of any or all
 undertakings necessary for the planning, financing,  tenant  relocation,
 acquisition, construction, equipment and development in connection ther-
 ewith.
   2-b.]  (a) Each permanent loan shall be secured by a bond and mortgage
 or note and mortgage upon the multiple dwelling, OR ANY PORTION OF  SUCH
 MULTIPLE  DWELLING,  and  the land upon which it is situated[; where the
 loan is made to an owner who is a lessee, such loan shall be secured  by
 a first lien on such property].
   (b)  [The  amount  of  any  such loan shall not exceed the cost of the
 installation of proper heating facilities, or elimination of  conditions
 dangerous to human life or detrimental to health, including nuisances as
 defined  in  section three hundred nine of the multiple dwelling law, or
 other rehabilitation or improvement provided that,  if  any  portion  of
 such loan is used for the cost of acquisition of the land and the multi-
 ple  dwelling  or  for re-financing, the total amount of such loan shall
 not exceed two times the cost of such installation, elimination of  such
 conditions, rehabilitation or improvement.
   (c) The amount of any such loan, together with the amount of all prior
 liens  and  encumbrances, shall not exceed, except in the case of a loan
 made to a non-profit company, a mutual company, or a housing development
 fund company, ninety per centum of the  value  of  the  property,  after
 completion  of  the installation of proper heating facilities, or elimi-
 nation of such conditions or other  rehabilitation  or  improvement,  as
 estimated by the agency, unless the agency makes a written determination
 that  the  owner has insufficient resources to pay for the remaining ten
 per centum of the value  of  the  property,  after  completion  of  such
 installation,  elimination,  or  other rehabilitation or improvement, as
 estimated by the agency, in which case such loan shall not exceed  nine-
 ty-five per centum of the value of the property, after completion of the
 installation of proper heating facilities, or elimination of such condi-
 A. 3669--A                          7

 tions  or other rehabilitation or improvement, as estimated by the agen-
 cy. The amount of any such loan, together with the amount of  all  prior
 liens  and encumbrances, made to a non-profit company, a mutual company,
 or  a housing development fund company shall not exceed the value of the
 property after completion of such installation,  elimination,  or  other
 rehabilitation  or improvement, as estimated by the agency provided that
 when after completion of such installation, elimination or  other  reha-
 bilitation  or improvement, such project is, or is to be operated exclu-
 sively for the benefit of persons or families who are entitled to  occu-
 pancy by reason of ownership of stock in the corporate owners, such loan
 shall  not  exceed  ninety-eight percentum of the value of the property,
 after completion of such installation, elimination, or  other  rehabili-
 tation  or  improvement,  as  estimated by the agency, unless the agency
 makes a written determination that the owner has insufficient  resources
 to  pay  for  the remaining two per centum of the value of the property,
 after completion of such installation, elimination, or  other  rehabili-
 tation  or  improvement,  as estimated by the agency, in which case such
 loan shall not exceed the value of the  property,  after  completion  of
 such  installation, elimination, or other rehabilitation or improvement,
 as estimated by the agency.
   (d)] Each such bond and mortgage or note and mortgage shall be  repaid
 over  or  within  a  period of [thirty] THIRTY-FIVE years, PROVIDED THAT
 SUCH PERIOD MAY BE EXTENDED  AND  SHALL  BE  REPAID  WITHIN  THIRTY-FIVE
 YEARS,  in  such  manner as may be provided in such bond and mortgage or
 note and mortgage and contract [but in no case to  exceed  the  probable
 life  of  the  multiple dwelling which is hereby determined to be thirty
 years]. Such bond and mortgage or note and mortgage and the contract  in
 connection  with  such  permanent  and  temporary loans may contain such
 other terms and provisions not inconsistent with the provisions of  this
 article  as  the local legislative body or the agency may deem necessary
 or desirable to secure repayment of the loan, the interest  thereon  and
 other  charges in connection therewith and to carry out the purposes and
 provisions of this article[; notwithstanding the foregoing, a loan  made
 prior  to  January  first,  nineteen  hundred  seventy-eight may, in the
 discretion of the agency, be extended to a term up to forty-five  years.
 The  agency  may  modify the rate and time of payment of interest on the
 original loan and the rate and time of amortization of principal in such
 manner as required to secure payment of the  loan  within  the  extended
 term].
   [2-c.] 2-B. If a loan pursuant to this article is made to a non-profit
 company  or  a  housing development fund company which agrees to provide
 housing accommodations exclusively  for  persons  and  families  of  low
 income,  at least thirty percent of whom are referred to it by the muni-
 cipality and have prior to their  initial  occupancy  in  such  accommo-
 dations resided in emergency shelter facilities operated by or on behalf
 of  the  municipality, the agency may provide that the note and mortgage
 shall automatically be reduced to zero in five equal  annual  decrements
 commencing  on the tenth year after the initial occupancy date, provided
 that such accommodations have  been  owned  and  operated  in  a  manner
 consistent  with  an  agreement  with the municipality contained in such
 note and mortgage to provide housing for such persons.
   § 11. Subdivisions 2, 3, 4 and 5 of section 403 of the private housing
 finance law, subdivision 2, paragraphs a, b and c of subdivision  3  and
 subdivision 4 as amended by chapter 904 of the laws of 1962, are amended
 to read as follows:
 A. 3669--A                          8
 
   2.  [In  the event that after any person or family included within the
 provisions of paragraph a of subdivision three of section  four  hundred
 one of this article, but not included within the provisions of paragraph
 b  of  such  subdivision three, begins occupancy of any dwelling unit in
 any  multiple  dwelling  aided  by  a loan pursuant to this article, and
 during the period while such dwelling unit is subject to a maximum  rent
 prescribed pursuant to this article, the income of such person or family
 increases  so  as  to  exceed  the applicable maximum prescribed by such
 paragraph a by more than fifty per centum, such person shall be  subject
 to removal from such dwelling with the approval of the agency.
   3.  a. In the event that on the date on which a contract for a loan is
 made with respect to a multiple dwelling aided by  a  loan  pursuant  to
 this  article,  any  person  or family occupying a dwelling unit in such
 multiple dwelling and included within the provisions of paragraph  b  of
 subdivision  three  of  section  four hundred one of this article, has a
 probable aggregate annual income, as determined in accordance  with  the
 provisions  of  paragraph a of such subdivision three, which exceeds the
 income limits specified in such paragraph a by more than fifty per cent,
 such person or family shall be subject to  removal  from  such  dwelling
 unit  with the approval of the agency upon the expiration of a period of
 two years after the date on which such contract is entered into.
   b. In the event that at any time within a period of  two  years  after
 any  such  contract  is  entered  into, the income of any such person or
 family increases so as to exceed the income  limits  specified  in  such
 paragraph  a by more than fifty per cent, such person or family shall be
 subject to removal from such dwelling unit  with  the  approval  of  the
 agency upon the expiration of such period of two years.
   c.  If,  at  any  time subsequent to the expiration of a period of two
 years after any such contract is entered into,  and  during  the  period
 while the dwelling unit occupied by any such person or family is subject
 to  a  maximum  rent  prescribed pursuant to this article, the income of
 such person or family increases so as to exceed the income limits speci-
 fied in such paragraph a by more than fifty per  cent,  such  person  or
 family  shall  be  subject  to  removal from such dwelling unit with the
 approval of the agency.
   4.] Any person or family in occupancy[, whether  included  within  the
 provisions of paragraph a or paragraph b of subdivision three of section
 four  hundred  one  of  this  article,  whose income exceeds the maximum
 prescribed by the provisions of such paragraph a  with  respect  to  the
 time of beginning of occupancy, shall] WHOSE INCOME PRECLUDES THE INCLU-
 SION  OF  SUCH  PERSON OR FAMILY WITHIN THE DEFINITION PROVIDED IN PARA-
 GRAPH A OF SUBDIVISION THREE OF SECTION FOUR HUNDRED ONE OF THIS ARTICLE
 MAY BE REQUIRED TO pay a rental surcharge in accordance with a  schedule
 of  surcharges  to be promulgated by the agency.  IN DETERMINING IMPOSI-
 TION OF ANY SUCH SURCHARGE, THE AGENCY SHALL CONSIDER  FACTORS  SUCH  AS
 THE NET OPERATING INCOME AND DEBT SERVICE COVERAGE RATIO OF THE PROPERTY
 AIDED  BY  A  LOAN PURSUANT TO THIS ARTICLE. Rental surcharges collected
 pursuant to this section shall be paid by the owner to the  municipality
 which  has granted such owner tax exemption or tax abatement pursuant to
 any law authorizing the granting of same, as reimbursement to such muni-
 cipality therefor. In the event that such tax exemption and  tax  abate-
 ment  have  not  been  granted,  or in the event that a sum equal to the
 total amount of tax exemption and tax abatement granted to the owner has
 been paid to the municipality, the excess, if any, of  surcharges  shall
 be paid to the municipality in reduction of the loan.
 A. 3669--A                          9
 
   [5. Any person or family whose removal is required by any provision of
 this article shall be subject to removal by summary proceedings.]
   §  12.  The  opening  paragraph of subdivision 1 of section 404 of the
 private housing finance law, as added by chapter  904  of  the  laws  of
 1962, is amended to read as follows:
   No  such loan shall be made by a municipality to an owner of an exist-
 ing multiple dwelling unless the owner of such  multiple  dwelling  [and
 all  persons  holding  a  lien  prior to that of the municipality] shall
 covenant in writing that so long  as  any  part  of  such  loan  remains
 unpaid,  any  exemption  and  abatement  from  taxation  on the property
 resulting from the installations, alterations or improvements made  with
 such  loan  remains in effect or for a period of at least ten years from
 the occupancy date, whichever is the later:
   § 13. Section 450 of the private housing finance law,  as  amended  by
 chapter 273 of the laws of 1975, is amended to read as follows:
   §  450.  Policy  and purposes of article.   It is hereby declared that
 there exists in municipalities in  this  state  a  seriously  inadequate
 supply  of safe and sanitary dwelling accommodations; that such shortage
 constitutes an emergency and a  grave  menace  to  the  health,  safety,
 morals,  welfare  and  comfort  of citizens of this state; that existing
 conditions of deterioration of housing marked by noncompliance with  the
 multiple dwelling law or local housing codes threaten a further decrease
 in  such  supply;  that  rehabilitation  and improvement of dwellings to
 prolong the useful life of such dwellings may  be  necessary  to  arrest
 such  conditions  of  deterioration; that the elimination of such condi-
 tions by rehabilitation or other improvement cannot readily be  provided
 by  the  ordinary unaided operation of private enterprise without public
 aid in the form of low interest loans OR GRANTS to owners of such multi-
 ple dwellings; that such rehabilitation or  other  improvement  of  such
 dwellings  to bring them into conformance with the multiple dwelling law
 and local housing codes is a public use, a public  purpose  and  a  city
 purpose  for  which  public  money may be loaned OR GRANTED by a munici-
 pality and for which indebtedness may be contracted by  a  municipality;
 that such conditions require the provisions hereinafter enacted, and the
 necessity  in the public interest for the provisions hereinafter enacted
 is hereby declared as a matter of legislative determination.
   § 14. Subdivisions 2 and 3 of  section  451  of  the  private  housing
 finance law, subdivision 2 as amended by chapter 705 of the laws of 1976
 and  subdivision  3  as  amended by chapter 269 of the laws of 1985, are
 amended to read as follows:
   2. "Occupancy by persons of low income." Occupancy by [persons  paying
 rentals  or  carrying  charges  not  in excess of the average rentals or
 carrying charges  prevailing  in  local  projects  of  municipally-aided
 limited-profit  housing  companies aided under article two of this chap-
 ter, the occupancy of which commenced on or after May eighteenth,  nine-
 teen  hundred  seventy]  "PERSONS  OF  LOW  INCOME"  OR "FAMILIES OF LOW
 INCOME," AS SUCH TERMS ARE DEFINED IN SECTION TWO OF THIS CHAPTER.
   3. "Owner." An individual, partnership, corporation or  other  entity,
 including  a non-profit company, a mutual company, or a housing develop-
 ment fund company, which holds record OR BENEFICIAL title in fee  simple
 to  the multiple dwelling and the real property upon which it is situate
 or the lessee thereof under a lease the unexpired term of which shall be
 not less than the term of the loan to be made under this article.
   § 15. Subdivision 1 of section 452 of the private housing finance law,
 as amended by chapter 923 of the laws of 1983,  is  amended  and  a  new
 subdivision 1-a is added to read as follows:
 A. 3669--A                         10
 
   1.  Notwithstanding  the  provisions  of any general, special or local
 law, a municipality is hereby authorized:
   (A) to make or contract to make loans to the owners of existing multi-
 ple  dwellings within its territorial limits, subject to the limitations
 in subdivision two of this section, for the elimination of any substand-
 ard or insanitary condition or conditions in violation of  the  multiple
 dwelling  law  or  local  housing code, FOR THE INCORPORATION OF CLIMATE
 RESILIENCY IMPROVEMENTS or for such replacement  and  rehabilitation  of
 the  heating, plumbing, electrical and related systems or other improve-
 ments as shall be reasonably necessary to prolong  the  useful  life  of
 such  dwellings,  and  may make temporary loans to such owners in antic-
 ipation of the permanent municipal loans for such purposes; AND
   (B)  TO MAKE OR CONTRACT TO MAKE GRANTS  TO  ANY  OWNER  DESCRIBED  IN
 PARAGRAPH  (A) OF THIS SUBDIVISION, ON THE SAME TERMS AS PERMITTED UNDER
 SUCH PARAGRAPH FOR A LOAN.
   1-A.  AS USED IN THIS ARTICLE, THE TERM "LOAN" SHALL INCLUDE ANY GRANT
 MADE BY A MUNICIPALITY PURSUANT TO THIS SECTION, PROVIDED, HOWEVER, THAT
 PROVISIONS OF THIS ARTICLE CONCERNING THE REPAYMENT OR  FORGIVENESS  OF,
 OR  SECURITY  FOR,  A LOAN SHALL NOT APPLY TO ANY GRANT MADE PURSUANT TO
 THIS ARTICLE.
   § 16. Subdivision 2 of section 452 of the private housing finance law,
 as amended by chapter 408 of the laws of 2009, is  amended  to  read  as
 follows:
   2. Each loan shall be evidenced by a note executed by the owner of the
 existing multiple dwelling. The supervising agency in its discretion may
 require  one or more of the shareholders of a corporate owner to co-sign
 such note or to otherwise guarantee or pledge security for the repayment
 of the loan. [The amount of any such loan shall not exceed  the  sum  of
 thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of
 eliminating  such  substandard or insanitary condition or conditions, or
 effecting such rehabilitation or improvement, whichever is  less.]  Each
 such  note  shall be repaid within a period [of the probable life of the
 existing multiple dwelling which  is  hereby  determined  to  be  thirty
 years, or such shorter period as the supervising agency shall determine]
 OF  THIRTY-FIVE  YEARS,  PROVIDED  THAT  SUCH PERIOD MAY BE EXTENDED AND
 SHALL BE REPAID WITHIN THIRTY-FIVE YEARS.  The repayment shall  be  made
 in  such manner as may be provided in such note and contract, if any, in
 connection with such loan and may authorize such owner, with the consent
 of the supervising agency, to prepay the principal of the  loan  subject
 to such terms and conditions as therein provided. Such note and contract
 may  contain  such  other terms and provisions not inconsistent with the
 provisions of this article as the local legislative body or  supervising
 agency  may deem necessary or desirable to secure repayment of the loan,
 the interest thereon and other charges in connection  therewith  and  to
 carry out the purposes and provisions of this article, including but not
 limited to provisions ensuring availability of rents for such repayment.
   §  17.  Section  453  of  the private housing finance law, as added by
 chapter 924 of the laws of 1970, paragraphs (c) and (d) as  amended  and
 paragraph  (e)  of  subdivision 1 as added by chapter 273 of the laws of
 1975, is amended to read as follows:
   § 453. Conditions precedent to making such loans.  [1.] No  such  loan
 shall  be  made  by  a  municipality to an owner of an existing multiple
 dwelling unless the owner of such multiple dwelling  shall  covenant  in
 writing  that  so  long as any part of such loan shall remain unpaid  OR
 FOR A PERIOD OF AT LEAST TEN YEARS FROM THE DATE OF THE LOAN,  WHICHEVER
 IS LATER:
 A. 3669--A                         11
 
   [(a)]  1. Each dwelling unit in such multiple dwelling shall be avail-
 able solely for occupancy by persons of low income;
   [(b)] 2. No person who lives in such multiple dwelling at the time the
 loan  is made shall be required to move because of the rehabilitation or
 improvement financed thereby, EXCEPT THAT A TEMPORARY RELOCATION MAY  BE
 REQUIRED IN CONNECTION WITH SUCH REHABILITATION OR IMPROVEMENT;
   [(c)] 3. All persons operating or managing such multiple dwelling will
 permit  the duly authorized officers, employees, agents or inspectors of
 the municipality to enter in or upon and inspect such multiple  dwelling
 at all reasonable hours; [and
   (d)]  4.  The  municipality by such duly authorized representatives as
 aforesaid shall have full power to investigate into and order the  owner
 of  such multiple dwelling to furnish such reports and information as it
 may require concerning such rehabilitation or improvement and shall have
 full power to audit the  books  of  said  owner  with  respect  to  such
 matters; and
   [(e)]  5.  The  owner will submit to the supervising agency annually a
 statement of the income and expenses of such multiple dwelling, in  such
 form as shall be approved by such agency.
   [2.  No  such  loan  shall be made by a municipality unless such owner
 executed an affidavit that he was unable to obtain  financing  for  such
 rehabilitation  or  improvement  because of the neighborhood, the age of
 the building, or other factors indicating an inability  of  the  private
 sector unaided to cause such rehabilitation or improvement to be made.]
   §  18.  The  article  heading  of  article  8-B of the private housing
 finance law, as added by chapter 786 of the laws of 1987, is amended  to
 read as follows:
            LOANS TO [OWNER-OCCUPANTS] OWNERS OF ONE TO FOUR UNIT
                      PRIVATE AND MULTIPLE DWELLINGS
   §  19.   Section 470 of the private housing finance law, as amended by
 chapter 200 of the laws of 1997, is amended to read as follows:
   § 470. Policy and purposes of article. It is hereby declared and found
 that there exists in municipalities within  the  state  substandard  and
 unsanitary  areas and neighborhoods containing deteriorated [owner-occu-
 pied] one to four unit private and  multiple  dwellings,  and  that  the
 rehabilitation  OR  PRESERVATION of such dwellings is necessary in order
 to aid in the prevention and elimination of slums  and  blight  in  such
 areas and  neighborhoods.
   It  further  is found that there exists in such municipalities a seri-
 ously inadequate supply of safe and  sanitary  [owner-occupied]  one  to
 four  unit  private  and multiple dwellings, particularly for persons of
 low and moderate income, that existing non-compliance with local housing
 codes and with the multiple dwelling law and the multiple residence  law
 threatens  to decrease such supply, and that the rehabilitation, PRESER-
 VATION and improvement of such dwellings is  necessary  to  arrest  such
 conditions of deterioration.
   It  further  is found that the elimination of such conditions by reha-
 bilitation or other improvements  cannot  be  readily  provided  without
 public  aid  in  the  form  of  low interest loans OR GRANTS to [low and
 moderate income owner-occupants] OWNERS of such one to four unit  dwell-
 ings.
   The  rehabilitation, PRESERVATION or other improvements of such dwell-
 ings [owned and occupied by low and moderate  income  persons  or  fami-
 lies,]  is  hereby declared a public purpose and a municipal purpose for
 which public monies may be loaned OR GRANTED.
 A. 3669--A                         12
 
   In order, further, to promote the preservation and  rehabilitation  of
 such  dwellings, it is hereby declared that additional provisions should
 be made to provide public monies for interest  reduction  subsidies  for
 private loans made by private investors for such rehabilitation.
   The  necessity in the public interest for the provisions of this arti-
 cle is hereby declared as a matter of legislative determination.
   § 20. Subdivisions 6 and 9 of  section  471  of  the  private  housing
 finance  law  are  REPEALED  and  subdivisions  7, 8, 10, 11, and 12 are
 renumbered 6, 7, 8, 9 and 10.
   § 21. Subdivision 7 of section 471 of the private housing finance law,
 as amended by chapter 200 of the laws of  1997,  and  as  renumbered  by
 section twenty of this act, is amended to read as follows:
   7.  "Owner"  shall mean an individual or individuals, a partnership, A
 CORPORATION OR OTHER ENTITY, INCLUDING BUT NOT LIMITED TO A TRUST, or  a
 joint  tenancy,  tenancy  in  common  or tenancy by the entirety holding
 record OR BENEFICIAL title in fee  simple  to  an  existing  private  or
 multiple  dwelling  and  the real property upon which it is situated, OR
 THE LESSEE THEREOF UNDER A LEASE HAVING AN UNEXPIRED TERM  OF  AT  LEAST
 THIRTY  YEARS.    "Owner"  shall be deemed to also include a cooperative
 corporation or a condominium association.
   § 22.  Section 472 of the private housing finance  law,  as  added  by
 chapter 786 of the laws of 1987, subdivision 1 as amended by chapter 479
 of the laws of 2005, subdivision 2 as amended by chapter 408 of the laws
 of 2009, subdivision 3 as amended by chapter 84 of the laws of 2001, and
 subdivision 7 as added by chapter 705 of the laws of 1991, is amended to
 read as follows:
   §  472.  Loans  to  [owner-occupants] OWNERS. 1.   Notwithstanding the
 provisions of any general, special or local law, a municipality,  acting
 through an agency, is authorized:
   (A)  to  make,  or contract to make, loans to [low and moderate income
 owner-occupants] OWNERS of one to four unit existing private or multiple
 dwellings within its territorial limits, subject to  the  limitation  of
 subdivisions two through seven of this section, in such amounts as shall
 be  required  for the rehabilitation, IMPROVEMENT OR ACQUISITION of such
 dwellings[,] provided, [however, that such loans shall not exceed  sixty
 thousand  dollars  per dwelling unit. Such] THAT ANY SUCH REHABILITATION
 OR IMPROVEMENT MAY INCLUDE CLIMATE RESILIENCY IMPROVEMENTS.  SUCH  loans
 may  also  BE  MADE  EXCLUSIVELY  FOR  OR include the refinancing of the
 outstanding indebtedness of such dwellings,  and  the  municipality  may
 make  temporary  loans  or  advances to such [owner-occupants] OWNERS in
 anticipation of permanent loans for such purposes; AND
   (B) TO MAKE OR CONTRACT TO MAKE GRANTS TO ANY OWNER DESCRIBED IN PARA-
 GRAPH (A) OF THIS SUBDIVISION, ON THE SAME TERMS AS PERMITTED UNDER SUCH
 PARAGRAPH FOR A LOAN.
   1-A.  AS USED IN THIS ARTICLE, THE TERM "LOAN" SHALL INCLUDE ANY GRANT
 MADE BY A MUNICIPALITY PURSUANT TO THIS SECTION, PROVIDED, HOWEVER, THAT
 PROVISIONS OF THIS ARTICLE CONCERNING THE REPAYMENT OR  FORGIVENESS  OF,
 OR  SECURITY  FOR,  A LOAN SHALL NOT APPLY TO ANY GRANT MADE PURSUANT TO
 THIS ARTICLE.
   2. Each loan shall be evidenced by a note executed by the [owner-occu-
 pant] OWNER of the existing dwelling. Repayment of each such note  shall
 be  within a period of [the probable life of the existing dwelling which
 is hereby determined to be thirty years, or such shorter period  as  the
 agency shall determine] THIRTY-FIVE YEARS, PROVIDED THAT SUCH PERIOD MAY
 BE EXTENDED AND SHALL BE REPAID WITHIN THIRTY-FIVE YEARS.  The repayment
 shall  be  made  in  such  manner  as  may  be provided in such note and
 A. 3669--A                         13
 
 contract, if any, in connection with such loan, and may  authorize  such
 [owner-occupant]  OWNER,  with  the consent of the agency, to prepay the
 principal of the loan subject to such terms and  conditions  as  therein
 provided.  In order to make any such loan affordable to the [owner-occu-
 pant] OWNER, the agency may provide in such note and contract  that  all
 of  the outstanding principal of said loan may be self-liquidated over a
 [fifteen year] period of [owner-occupancy] NOT LESS THAN  FIFTEEN  YEARS
 OF  CONTINUOUS  COMPLIANCE  BY  THE OWNER WITH A REGULATORY AGREEMENT OR
 OTHER RESTRICTIVE COVENANT WITH OR APPROVED BY THE AGENCY AND  UPON  THE
 SATISFACTION  OF  ANY ADDITIONAL CONDITIONS SPECIFIED THEREIN. Such note
 and contract may contain such other terms and provisions not  inconsist-
 ent with the provisions of this article as the agency may deem necessary
 or  desirable  to secure repayment of the loan, the interest thereon, if
 any, and other charges in connection therewith, and  to  carry  out  the
 purposes and provisions of this article.
   3.  The agency in its discretion may require that the [owner-occupant]
 OWNER execute, acknowledge and deliver a uniform commercial code financ-
 ing statement for the real property improvement to be in  such  form  as
 the  agency  shall  specify  and  in accordance with the requirements of
 section 9--502 of the uniform commercial code of the state of New  York.
 Said  financing  statement  shall be filed or recorded without charge in
 accordance with the provisions of paragraph one  of  subsection  (a)  of
 section 9--501 of the uniform commercial code, and from the date of such
 filing  the  municipality  shall  have a lien against said real property
 improvement for the amount advanced or so much thereof as remains unpaid
 together with the interest thereon. Upon payment of all sums advanced by
 the municipality and interest thereon,  and  upon  demand  of  the  then
 record  owner  of  the real property, the agency shall deliver a copy of
 the financing statement with an endorsement thereon  that  the  lien  is
 satisfied.  Upon  filing  of such copy in the office where the financing
 statement was filed and upon payment of the  proper  fee  therefor,  the
 lien of such financing statement shall be discharged.
   4.  The  agency  may  require  the [owner-occupant] OWNER to execute a
 mortgage as security for a loan in lieu of or in addition to a financing
 statement as provided in subdivision three of this section.  Such  mort-
 gage  shall  contain such terms and provisions not inconsistent with the
 provisions of this article as the agency shall deem necessary or desira-
 ble to secure repayment of the loan.
   5. Loans may be made with respect to a one to  four  unit  private  or
 multiple  dwelling  encumbered  by mortgages, provided no mortgage is in
 default, except if such default shall be remedied by the proposed  reha-
 bilitation or improvement.
   6.  The  agency may charge the [owner-occupant] OWNER of such existing
 private or multiple dwelling reasonable fees for administration, financ-
 ing, regulation, supervision and audit.
   7. In making a loan under this article, an agency shall have the power
 to participate in a loan made by any private  investor[,  provided  that
 the  portion of the loan funded by the agency shall not exceed an amount
 equal to seventy-five percent of the total loan.] The agency  may  enter
 into  an  agreement  with  a private investor to deposit funds with such
 private investor  to  cover  the  agency's  participation  in  loans  to
 [owner-occupants] OWNERS of one to four unit existing private and multi-
 ple  dwellings  with  such  funds  advanced  by such private investor to
 [owner-occupants] OWNERS of existing dwellings. The portion of the  loan
 funded  by  the  agency  may  be  equal to or subordinate in lien to the
 portion of the loan funded by the private  investor  and  the  note  and
 A. 3669--A                         14
 
 contract  may  contain such terms with respect to interest rate, if any,
 and time of payment of principal and interest as determined by the agen-
 cy. The agency may make provision, either in the mortgage  or  mortgages
 or by separate agreement, for the performance by the private investor of
 such  services as are generally performed by a banking institution which
 itself holds a mortgage,  including,  without  limitation,  construction
 loan  advances,  construction  supervision,  initiation  of  foreclosure
 proceedings,  procurement  of  insurance,  and  all  other  matters   in
 connection  with the financing, supervision, regulation and audit of any
 such loan. In order to make the loan affordable to the  [owner-occupant]
 OWNER,  the agency may provide an interest reduction subsidy pursuant to
 section four hundred seventy-five of this article, or may  provide  that
 all  or part of the agency's portion of the outstanding principal of any
 such participation loan may be self-liquidated over a fifteen year peri-
 od of [owner-occupancy]  NOT  LESS  THAN  FIFTEEN  YEARS  OF  CONTINUOUS
 COMPLIANCE BY THE OWNER WITH A REGULATORY AGREEMENT OR OTHER RESTRICTIVE
 COVENANT WITH OR APPROVED BY THE AGENCY AND UPON THE SATISFACTION OF ANY
 ADDITIONAL CONDITIONS SPECIFIED THEREIN.
   §  23.    Subdivisions  1  and 2 of section 473 of the private housing
 finance law, as added by chapter 786 of the laws of 1987, are amended to
 read as follows:
   1. No such loan shall be made  to  an  [owner-occupant]  OWNER  of  an
 existing  private or multiple dwelling unless the [owner-occupant] OWNER
 of such private or multiple dwelling shall covenant in writing  that  so
 long  as any part of such loan shall remain unpaid OR FOR A PERIOD OF AT
 LEAST TEN YEARS FROM THE DATE OF THE LOAN, WHICHEVER IS LATER:  (i)  the
 [owner-occupant]  OWNER  or  managing agent or operator of such dwelling
 shall permit the duly authorized officers, employees, agents or  inspec-
 tors  of  the  agency  to  enter  in or upon and inspect such private or
 multiple dwelling at all reasonable hours; (ii) the agency by such  duly
 authorized  representatives as aforesaid shall have full power to inves-
 tigate into and order the [owner-occupant] OWNER  of  such  dwelling  to
 furnish  such  reports and information as it may require concerning such
 rehabilitation or improvement and shall have full  power  to  audit  the
 books of said owner with respect to such matters; and (iii) if the prop-
 erty  to  be  rehabilitated is a multiple dwelling, the [owner-occupant]
 OWNER will submit to the agency  annually  a  statement  of  income  and
 expenses  of  such  dwelling,  in  such form as shall be approved by the
 agency.
   2. A municipality shall neither make nor participate in a loan  to  an
 [owner-occupant]  OWNER  of  an  existing  private  or multiple dwelling
 pursuant to this article unless the agency finds that the area in  which
 such  dwelling  is situated is a blighted, deteriorated or deteriorating
 area or has a blighting influence on the  surrounding  area,  or  is  in
 danger of becoming a slum or a blighted area because of the existence of
 substandard,  unsanitary,  deteriorating  or deteriorated conditions, an
 aged housing stock, or other factors  indicating  an  inability  of  the
 private sector to cause such rehabilitation to be made.
   §  24.    Subdivision  2 of section 474 of the private housing finance
 law, as added by chapter 786 of the laws of 1987, is amended to read  as
 follows:
   2.  The  agency  is  authorized to make provision in the note and loan
 agreement or by separate agreement for the servicing of such loans by  a
 loan  servicing  company OR OTHER QUALIFIED ENTITY, AS DETERMINED BY THE
 AGENCY, and such services may  include,  but  not  be  limited  to,  the
 collection  of  the  debt  services on such loans and the establishment,
 A. 3669--A                         15
 
 administration, and distribution of an escrow account for the payment of
 the [owner-occupant's] OWNER'S real estate taxes, sewer and water  rents
 and fire insurance.
   §  25.  Section  475  of  the private housing finance law, as added by
 chapter 786 of the laws of 1987, is amended to read as follows:
   § 475. Interest reduction subsidies. Notwithstanding the provisions of
 any general, special or local law, a  municipality,  acting  through  an
 agency,  is  authorized  to  provide,  or  contract to provide, interest
 reduction subsidies for loans made by  private  investors  to  [low  and
 moderate  income  owner-occupants]  OWNERS  of one to four unit existing
 private or multiple dwellings within its  territorial  limits,  if  such
 [owner-occupants]  OWNERS  would have been eligible under the provisions
 of this article for a loan made by the  municipality  pursuant  to  this
 article.
   §  26.  The  private  housing finance law is amended by adding two new
 sections 610 and 611 to read as follows:
   § 610. RENT STABILIZATION AND REGULATORY AGREEMENTS. 1.  NOTWITHSTAND-
 ING  ANY  OTHER  PROVISION  OF  LAW, INCLUDING THE PROVISIONS OF, OR ANY
 REGULATION PROMULGATED PURSUANT TO, THE EMERGENCY TENANT PROTECTION  ACT
 OF  NINETEEN  SEVENTY-FOUR  OR  THE  RENT  STABILIZATION LAW OF NINETEEN
 HUNDRED SIXTY-NINE, THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL,
 WHEN SUPERVISING HOUSING ACCOMMODATIONS UNDER PROVISIONS  OF  LAW  OTHER
 THAN THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR OR THE
 RENT STABILIZATION LAW OF NINETEEN HUNDRED SIXTY-NINE, THE NEW YORK CITY
 DEPARTMENT  OF  HOUSING PRESERVATION AND DEVELOPMENT, THE NEW YORK STATE
 URBAN DEVELOPMENT CORPORATION, THE NEW YORK STATE HOUSING FINANCE  AGEN-
 CY, THE NEW YORK STATE HOUSING TRUST FUND, AND THE NEW YORK CITY HOUSING
 DEVELOPMENT  CORPORATION, OR SUCH OTHER STATE OR MUNICIPAL AGENCY, POLI-
 TICAL SUBDIVISION, PUBLIC BENEFIT CORPORATION,   OR  INSTRUMENTALITY  AS
 THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL IDENTIFY, MAY,
 BY  AGREEMENT  WITH AN OWNER OF A MULTIPLE DWELLING, SUBJECT ANY HOUSING
 ACCOMMODATION  IN  SUCH  MULTIPLE  DWELLING  TO  THE  EMERGENCY   TENANT
 PROTECTION ACT OF NINETEEN SEVENTY-FOUR OR THE RENT STABILIZATION LAW OF
 NINETEEN HUNDRED SIXTY-NINE, OR BOTH, IF APPLICABLE TO THE MUNICIPALITY.
 THE  REQUIREMENTS  OF  SUCH  AGREEMENT SHALL SUPPLEMENT ANY REQUIREMENTS
 IMPOSED ON SUCH HOUSING ACCOMMODATION PURSUANT TO ANY  OTHER  PROVISIONS
 OF LAW.
   2. ANY AGREEMENT BETWEEN A STATE OR MUNICIPAL AGENCY, POLITICAL SUBDI-
 VISION,  PUBLIC  BENEFIT  CORPORATION,  OR  INSTRUMENTALITY DESCRIBED IN
 SUBDIVISION ONE OF THIS SECTION AND AN OWNER OF A MULTIPLE DWELLING THAT
 CONTAINS PROVISIONS THAT ARE CONSISTENT WITH  SUBDIVISION  ONE  OF  THIS
 SECTION  AND  THAT IS IN EFFECT AS OF THE EFFECTIVE DATE OF THIS SECTION
 IS AND WILL REMAIN VALID AND ENFORCEABLE.
   § 611. COMPLIANCE MONITORING. 1. ANY SUPERVISING AGENCY AND ANY PUBLIC
 BENEFIT CORPORATION CREATED PURSUANT TO  THIS  CHAPTER  SHALL  HAVE  THE
 POWER  TO:  (A) SUBPOENA, REQUIRE THE ATTENDANCE OF AND EXAMINE AND TAKE
 TESTIMONY UNDER OATH OF SUCH PERSONS AS IT DEEMS NECESSARY  TO  MONITOR,
 AND  ENFORCE  COMPLIANCE  WITH, A NOTE, MORTGAGE, OTHER FINANCING AGREE-
 MENT, REGULATORY AGREEMENT, DEED, LAND DISPOSITION AGREEMENT,  OR  OTHER
 RESTRICTIVE  COVENANT WITH OR APPROVED BY SUCH AGENCY OR CORPORATION AND
 ENTERED INTO IN CONNECTION WITH AN ACTION TAKEN PURSUANT TO  THIS  CHAP-
 TER,  THE  GENERAL  MUNICIPAL LAW, THE REAL PROPERTY TAX LAW, OR THE NEW
 YORK CITY ZONING RESOLUTION; AND (B) SUBPOENA AND REQUIRE THE PRODUCTION
 OF BOOKS, ACCOUNTS, PAPERS, DOCUMENTS AND OTHER EVIDENCE RELATED TO SUCH
 MONITORING AND ENFORCEMENT.
 A. 3669--A                         16
 
   2.  ANY PERSON WHO HAS BEEN ISSUED A SUBPOENA, OR ANY  OTHER  REQUIRE-
 MENT  TO  TESTIFY  OR PRODUCE BOOKS AND RECORDS, PURSUANT TO SUBDIVISION
 ONE OF THIS SECTION, SHALL BE REQUIRED TO COMPLY WITH SUCH  SUBPOENA  OR
 OTHER  REQUIREMENT WITHIN A REASONABLE PERIOD OF TIME ESTABLISHED BY THE
 SUPERVISING  AGENCY  OR  PUBLIC  BENEFIT  CORPORATION  THAT  ISSUED SUCH
 SUBPOENA. EACH DAY IN WHICH A PERSON FAILS TO COMPLY WITH SUCH SUBPOENA,
 OR WITH ANY OTHER SUCH REQUIREMENT  TO  TESTIFY  OR  PRODUCE  BOOKS  AND
 RECORDS,  SHALL  CONSTITUTE  A  SEPARATE  VIOLATION OF THIS SECTION. THE
 CIVIL PENALTY FOR EACH SUCH VIOLATION SHALL BE NOT MORE THAN TWO HUNDRED
 FIFTY DOLLARS, PROVIDED THAT SUCH PENALTY SHALL NOT APPLY TO ANY  PERIOD
 DURING  WHICH  SUCH  SUBPOENA OR OTHER REQUIREMENT TO TESTIFY OR PRODUCE
 BOOKS AND RECORDS IS  THE  SUBJECT  OF  A  PENDING  JUDICIAL  PROCEEDING
 COMMENCED  PRIOR  TO THE EXPIRATION OF THE PERIOD OF TIME ESTABLISHED BY
 SUCH SUPERVISING AGENCY OR PUBLIC  BENEFIT  CORPORATION  FOR  COMPLIANCE
 WITH  SUCH SUBPOENA OR OTHER REQUIREMENT TO TESTIFY OR PRODUCE BOOKS AND
 RECORDS.
   3.   ANY SUCH SUPERVISING AGENCY OR  PUBLIC  BENEFIT  CORPORATION  MAY
 PROMULGATE  RULES  AND  REGULATIONS  TO CARRY OUT THE PROVISIONS OF THIS
 SECTION.
   § 27. Section 800 of the private housing finance law,  as  amended  by
 chapter 456 of the laws of 2003, is amended to read as follows:
   § 800. Policy and purposes of article. It is hereby declared and found
 that there exists in municipalities in this state substandard and insan-
 itary areas and neighborhoods characterized by undermaintained and dete-
 riorating  housing  accommodations  and  under-utilized  non-residential
 buildings and under-utilized vacant land. It is further found that there
 exists in such municipalities a  diminishing  and  seriously  inadequate
 supply  of  safe  and sanitary dwelling accommodations, particularly for
 persons of low income; that the loss of housing accommodations is caused
 by the inability of the ordinary unaided operations  of  private  enter-
 prise  to  make loans for rehabilitation or construction purposes or for
 conversion which accelerates the process of deterioration  and  abandon-
 ment,  turning  active  and viable neighborhoods into slums and blighted
 areas; and that the prevention of deterioration and loss  through  aban-
 donment  can only be achieved by the elimination of conditions which are
 unsafe or detrimental to health, the replacement of antiquated  heating,
 plumbing, and electrical systems and, where necessary, the overall reha-
 bilitation  of  certain  housing accommodations, the construction of new
 housing accommodations on vacant land and the conversion  of  under-uti-
 lized non-residential property to residential use, and that the unavail-
 ability  of funds for the conversion of under-utilized property to resi-
 dential  use,  for  the  preservation  and  rehabilitation  of   housing
 accommodations and for the construction of new housing accommodations on
 vacant land constitutes a threat to the health, safety and well-being of
 the  persons  who  occupy  them  and denies to others the possibility of
 living in safe and sanitary housing accommodations.
   In order to promote the preservation and rehabilitation of such  hous-
 ing  accommodations,  the  creation of new housing accommodations by the
 conversion of  under-utilized  non-residential  property  into  multiple
 dwellings  and  the construction of new housing accommodations on vacant
 land in such areas and to encourage the investment of private capital in
 such areas, provision should be  made  for  a  municipality  to  attract
 private  investment  for  such  purposes  by  utilizing funds, which are
 available from the federal government through specific or  discretionary
 grants, or are available from other financing sources, for joint partic-
 ipation  loans with private investors, OR LOANS OR GRANTS BY THE MUNICI-
 A. 3669--A                         17
 
 PALITY, to effect the required construction, rehabilitation  or  conver-
 sion.
   The  necessity  in  the public interest for the provisions hereinafter
 enacted is hereby declared as a matter of legislative determination.
   § 28. Subdivision 5 of section 801 of the private housing finance law,
 as amended by chapter 456 of the laws of 2003, is  amended  to  read  as
 follows:
   5. "Owner" shall mean an individual, partnership, corporation or other
 entity,  including  a non-profit company, a mutual company, or a housing
 development fund company, which holds record OR BENEFICIAL title in  fee
 simple  to  the  existing  multiple  dwelling to be rehabilitated or the
 non-residential property to be converted into a  multiple  dwelling  and
 the  real property upon which it is situate or to vacant land upon which
 the new multiple dwelling is to be constructed, OR IS THE LESSEE OF  ANY
 SUCH REAL PROPERTY HAVING AN UNEXPIRED TERM OF AT LEAST THIRTY YEARS.
   §  29.  Section  801  of the private housing finance law is amended by
 adding a new subdivision 5-a to read as follows:
   5-A. "PARTICIPATION LOAN" AND THE MUNICIPALITY'S  "PARTICIPATION"  IN,
 "PORTION"  OF,  OR  "INVESTMENT" IN A LOAN, OR WORDS OF SIMILAR MEANING,
 SHALL MEAN ANY LOAN OR GRANT MADE BY THE MUNICIPALITY OR  THE  NEW  YORK
 CITY  HOUSING  DEVELOPMENT  CORPORATION  PURSUANT TO THIS ARTICLE EITHER
 WITH OR WITHOUT A PRIVATE INVESTOR, PROVIDED, HOWEVER,  THAT  PROVISIONS
 OF  THIS ARTICLE CONCERNING THE REPAYMENT OR FORGIVENESS OF, OR SECURITY
 FOR, A LOAN SHALL NOT APPLY TO ANY GRANT MADE PURSUANT TO THIS ARTICLE.
   § 30. Subdivision 6 of section 801 of the private housing finance law,
 as amended by chapter 456 of the laws of 2003, is  amended  to  read  as
 follows:
   6.  "Private  investor"  shall mean one or more banking organizations,
 foundations,  labor  unions,  credit  unions,  employers'  associations,
 veterans'  organizations,  colleges,  universities,  educational  insti-
 tutions, child care institutions,  hospitals,  medical  research  insti-
 tutes, insurance companies, trustees or fiduciaries, trustees of pension
 and  retirement  funds and systems, corporations, partnerships, individ-
 uals or other entities or any combination of the  foregoing,  and  shall
 include  the  United States of America and THE STATE OF NEW YORK AND any
 [of its agencies acting as a lender under the loan program  pursuant  to
 section  three  hundred  twelve  of  the housing act of nineteen hundred
 sixty-four and any amendments thereto or any  similar  program]  AGENCY,
 OFFICE  OR  PUBLIC BENEFIT CORPORATION THEREOF. As used in this subdivi-
 sion, the terms "trustees" and "fiduciaries" shall include any fiduciary
 or fiduciaries holding funds  for  investment,  and  the  term  "banking
 organizations"  shall  have the same meaning as in subdivision eleven of
 section two of the banking law.
   § 31. Subdivisions 1, 3 and 4 of section 802 of  the  private  housing
 finance  law, subdivisions 1 and 3 as amended by chapter 456 of the laws
 of 2003 and subdivision 4 as added by chapter 822 of the laws  of  1976,
 are amended to read as follows:
   1. (A) Notwithstanding the provisions of any general, special or local
 law,  one  or  more private investors and a municipality, acting through
 its agency, shall have the power to participate  and  invest  in  making
 loans  to  the owners of existing multiple dwellings or to the owners of
 non-residential property or to the owners of vacant land subject to  the
 limitations  of  subdivisions two through seven of this section, in such
 amounts as shall be required for (I) the rehabilitation of such existing
 multiple dwellings or for the conversion of such non-residential proper-
 ty or for the construction of a new multiple  dwelling  on  such  vacant
 A. 3669--A                         18
 
 land,  PROVIDED THAT SUCH REHABILITATION, CONVERSION OR CONSTRUCTION MAY
 INCLUDE CLIMATE RESILIENCY IMPROVEMENTS, and if any such owner  acquires
 the  existing  multiple  dwelling or the non-residential property or the
 vacant  land  for  the  purpose  of  such  rehabilitation, conversion or
 construction or owns the existing multiple dwelling or the  non-residen-
 tial property or the vacant land subject to an outstanding indebtedness,
 such  loans  MAY  BE MADE EXCLUSIVELY FOR OR may include such amounts as
 may be required for the cost of such acquisition or for the  refinancing
 of  such  outstanding  indebtedness,  (II)  PROVIDING  SITE IMPROVEMENTS
 LOCATED ON THE PROPERTY ON WHICH SUCH EXISTING  MULTIPLE  DWELLINGS  ARE
 LOCATED  OR  ON  SUCH  NON-RESIDENTIAL  PROPERTY  OR VACANT LAND OR IN A
 PUBLIC RIGHT-OF-WAY, INCLUDING, BUT NOT  LIMITED  TO,  WATER  AND  SEWER
 FACILITIES, SIDEWALKS, LANDSCAPING, PARKS AND OPEN SPACE, SOCIAL, RECRE-
 ATIONAL,  COMMUNAL  AND OTHER NON-RESIDENTIAL FACILITIES AND THE OUTFIT-
 TING THEREOF, THE CURING OF PROBLEMS CAUSED BY ABNORMAL SITE CONDITIONS,
 EXCAVATION AND  CONSTRUCTION  OF  FOOTINGS  AND  FOUNDATIONS  AND  OTHER
 IMPROVEMENTS ASSOCIATED WITH THE PROVISION OF INFRASTRUCTURE FOR HOUSING
 ACCOMMODATIONS, OR (III) PROVIDING FOR OTHER COSTS OF DEVELOPING HOUSING
 ACCOMMODATIONS, and such private investors and a municipality may joint-
 ly participate or invest in the making of temporary loans or advances to
 such  owners  in  anticipation  of the permanent participation loans for
 such purposes.
   (B) NOTWITHSTANDING THE PROVISIONS OF ANY GENERAL,  SPECIAL  OR  LOCAL
 LAW,  AND  IN  ADDITION TO THE POWER TO MAKE OR CONTRACT TO MAKE PARTIC-
 IPATION LOANS GRANTED BY PARAGRAPH (A) OF THIS SUBDIVISION, THE  MUNICI-
 PALITY,  ACTING THROUGH ITS AGENCY, AND THE NEW YORK CITY HOUSING DEVEL-
 OPMENT CORPORATION SHALL EACH HAVE THE POWER TO MAKE OR CONTRACT TO MAKE
 LOANS OR GRANTS TO ANY OWNER DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVI-
 SION WITHOUT THE PARTICIPATION OF A PRIVATE INVESTOR, ON THE SAME  TERMS
 AS PERMITTED UNDER SUCH PARAGRAPH FOR A PARTICIPATION LOAN.
   3.  [(a)]  Each  participation loan shall be secured by a bond or note
 and single participating mortgage or by  separate  bonds  or  notes  and
 mortgages  upon  ANY PORTION OR ALL OF the existing multiple dwelling or
 the non-residential property and the land upon which it is  situated  or
 in  the  case  of  the construction of a new multiple dwelling, upon ANY
 PORTION OR ALL OF the vacant  land  and  the  multiple  dwelling  to  be
 constructed,  provided that each such loan shall be made upon such terms
 and conditions as may be approved  by  the  agency,  including  but  not
 limited  to  provisions  that  [(i)]  (A)  priority  may be given to the
 payment of the principal of and interest on that portion of the mortgage
 indebtedness attributable to participation in the loan by  one  or  more
 private  investors,  [(ii)] (B) the interest of the municipality created
 as a result of making such a mortgage loan may be  subordinated  to  the
 interest  that  one or more of such private investors may have upon such
 participation, [(iii)] (C) the interest of each upon such  participation
 need  not  be  of  equal priority as to lien nor be equal as to interest
 rate, time or rate of amortization of principal or time  of  payment  of
 interest,  or  otherwise,  [(iv)]  (D) the bond or note and mortgage may
 provide that the municipality's portion of a participation loan made  to
 an owner shall be reduced to zero commencing in the fifteenth year after
 the execution of the bond or note and mortgage, provided that, as of the
 date  of any such reduction, such multiple dwelling has been and contin-
 ues to be owned and operated in a manner consistent  with  a  regulatory
 agreement  with  the  municipality.  Notwithstanding  such  provision as
 contained in the bond or note and mortgage, the  municipality's  portion
 of the loan shall be reduced to zero only if, prior to or simultaneously
 A. 3669--A                         19
 
 with delivery of such bond or note and mortgage, the agency made a writ-
 ten  determination  that such reduction would be necessary to ensure the
 continued affordability or economic viability of the multiple  dwelling.
 Such  written determination shall document the basis upon which the loan
 was determined to be eligible for evaporation.
   [(b) The aggregate amount of each such participation  loan  shall  not
 exceed  the cost of the rehabilitation, conversion or construction, plus
 the costs of any or all undertakings necessary for the planning, financ-
 ing, acquisition, satisfaction of tax liens and  other  municipal  liens
 and  encumbrances, construction, equipment and development in connection
 therewith, provided that, if any portion of such loan is  used  for  the
 cost  of  acquisition or for refinancing, the amount of a municipality's
 portion of such loan shall not exceed one and one-half times the cost of
 rehabilitation, conversion or construction.
   (c) The amount of any such loan, together with the amount of all prior
 liens and encumbrances, shall not exceed, except in the case of  a  loan
 made to a non-profit company, a mutual company, or a housing development
 fund company, ninety per centum of value unless the agency makes a writ-
 ten  determination  that the owner has insufficient resources to pay for
 the remaining ten per centum of value, in which case such loan shall not
 exceed ninety-five per centum of value. The amount  of  any  such  loan,
 together  with the amount of all prior liens and encumbrances, made to a
 non-profit company, a mutual company,  or  a  housing  development  fund
 company  shall  not exceed value, provided that when after completion of
 such rehabilitation, conversion or construction, such multiple  dwelling
 is,  or  is  to  be operated, exclusively for the benefit of persons and
 families who are entitled to occupancy by reason of ownership  of  stock
 in  the  corporate  owners,  such loan shall not exceed ninety-eight per
 centum of value unless the agency makes a written determination that the
 owner has insufficient resources to pay for the remaining two per centum
 of value, in which case such loan shall not exceed value.]
   4. Each such bond or note and mortgage or bonds or notes and mortgages
 shall be repaid over or within a period of [thirty]  THIRTY-FIVE  years,
 PROVIDED  THAT  SUCH  PERIOD  MAY BE EXTENDED AND SHALL BE REPAID WITHIN
 THIRTY-FIVE YEARS, in such manner as may be provided  in  such  bond  or
 note  and mortgage or bonds or notes and mortgages [but in no case shall
 the term of such loan exceed the probable life of the multiple  dwelling
 which  is  hereby  determined to be thirty years]. Such bond or note and
 mortgage or bonds or notes and mortgages and any contract in  connection
 with such permanent and temporary loans may contain such other terms and
 provisions  not  inconsistent with the provisions of this article as the
 local legislative body or the agency may deem necessary or desirable  to
 secure  repayment of the loan, the interest thereon and other charges in
 connection therewith and to carry out the  purposes  and  provisions  of
 this article.
   §  32.  Subdivisions 2, 3 and 6 of section 1151 of the private housing
 finance law, subdivision 2 as amended by chapter 567 of the laws of 1993
 and subdivisions 3 and 6 as added by chapter 639 of the  laws  of  1989,
 are amended to read as follows:
   2.  "Eligible  project" shall mean a project intended to construct new
 housing accommodations on  an  eligible  site  by  new  construction  or
 substantial  rehabilitation,  PROVIDED  THAT  SUCH  NEW  CONSTRUCTION OR
 SUBSTANTIAL REHABILITATION MAY INCLUDE CLIMATE RESILIENCY  IMPROVEMENTS.
 An  eligible  project  shall  serve  the needs of persons of low income,
 including privately-owned one to four family dwellings, condominiums and
 cooperatives, and rental projects.
 A. 3669--A                         20
 
   3. ["Development costs" shall mean the reasonable and necessary  costs
 for   planning,   financing,   acquisition  of  land  or  buildings  and
 construction of new buildings  or  the  reconstruction,  rehabilitation,
 repair  or  remodeling  of existing buildings and the costs of necessary
 site  improvements]  "PARTICIPATION LOAN" AND THE CITY'S "PARTICIPATION"
 IN, "PORTION" OF, OR "INVESTMENT" IN A LOAN, OR WORDS OF  SIMILAR  MEAN-
 ING,  SHALL  MEAN  ANY LOAN OR GRANT MADE BY THE AGENCY PURSUANT TO THIS
 ARTICLE EITHER WITH OR WITHOUT A PRIVATE LENDER, PROVIDED, HOWEVER, THAT
 PROVISIONS OF THIS ARTICLE CONCERNING THE REPAYMENT OR  FORGIVENESS  OF,
 OR SECURITY FOR, A LOAN SHALL NOT APPLY TO ANY GRANT.
   6.  "Loan" shall mean a [first] mortgage loan made by a private lender
 in participation with the city of New York to a sponsor for the  purpose
 of  construction  of  an  eligible project including a loan in which the
 portion of the loan funded by the agency is represented  by  a  separate
 note and mortgage.
   §  33.    Section 1152 of the private housing finance law, as added by
 chapter 639 of the laws of 1989, subdivision 4 as amended  and  subdivi-
 sion  13  as added by chapter 241 of the laws of 1998, subdivision 12 as
 added by chapter 400 of the laws of 1994, and paragraph e of subdivision
 12 as amended by chapter 118 of the laws of 2003, is amended to read  as
 follows:
   §  1152.  Affordable housing development loans. 1. (A) Notwithstanding
 the provisions of any general, special or local law, one or more private
 lenders and the city of New York, acting through the agency  shall  have
 the  power to participate and invest in making loans to sponsors for the
 construction of eligible projects. Such loans MAY  BE  MADE  EXCLUSIVELY
 FOR  OR may include such amounts as may be required for site acquisition
 OR THE REFINANCING OF ELIGIBLE PROJECTS. Each  such  participation  loan
 shall  be secured by a bond or note and single participating mortgage or
 by separate bonds or notes and mortgages upon ALL OR ANY PORTION OF  the
 eligible  project.  Such  bond or note and mortgage or bonds or notes or
 mortgages may contain such other terms and provisions  not  inconsistent
 with  the provisions of this article as the agency may deem necessary or
 desirable.
   (B)  NOTWITHSTANDING THE PROVISIONS OF ANY GENERAL, SPECIAL  OR  LOCAL
 LAW,  AND  IN  ADDITION TO THE POWER TO MAKE OR CONTRACT TO MAKE PARTIC-
 IPATION LOANS GRANTED BY PARAGRAPH (A) OF THIS SUBDIVISION, THE CITY  OF
 NEW  YORK,  ACTING  THROUGH  THE AGENCY, SHALL HAVE THE POWER TO MAKE OR
 CONTRACT TO MAKE LOANS OR GRANTS TO ANY OWNER DESCRIBED IN PARAGRAPH (A)
 OF THIS SUBDIVISION WITHOUT THE PARTICIPATION OF A  PRIVATE  LENDER,  ON
 THE  SAME  TERMS  AS  PERMITTED UNDER SUCH PARAGRAPH FOR A PARTICIPATION
 LOAN.
   2. [The portion of such loan funded by the agency shall not exceed  an
 amount equal to sixty percent of the actual total development cost of an
 eligible project.] The agency may enter into an agreement with a private
 lender  to  deposit  its  share  of a loan with the private lender to be
 advanced by the private lender. The portion of the loan  funded  by  the
 agency may be equal to or subordinate in lien to the portion of the loan
 funded  by the private lender and may contain such terms with respect to
 interest rate, if any, rate of amortization of principal,  if  any,  and
 time  of  payment of interest and principal as determined by the agency.
 The agency may make provision either in the mortgage or mortgages or  by
 separate  agreement  for  the  performance by the private lender of such
 services as are generally  performed  by  a  banking  institution  which
 itself  holds  a  mortgage,  including, without limitation, construction
 loan  advances,  construction  supervision,  initiation  of  foreclosure
 A. 3669--A                         21
 
 proceedings,   procurement  of  insurance,  and  all  other  matters  in
 connection with the financing, supervision, regulation and audit of  any
 such loan to any such eligible project.
   3.  [If  a portion of the loan is to be utilized for acquisition of an
 eligible site such portion shall in no event exceed fifteen  percent  of
 the total amount of such loan or the appraised value of the site, which-
 ever is the lesser.
   4.] If the eligible project is to consist of one to four unit dwelling
 accommodations  or  cooperative or condominium units, the agency's share
 of the loan may be converted after completion of construction into mort-
 gages on such dwelling accommodations or condominium units or  financing
 statements  filed with respect to such cooperative shares, provided such
 units or such cooperative shares are purchased by persons of  [eligible]
 LOW  income.  Such  mortgages  AND  ANY BLANKET MORTGAGE THAT THE AGENCY
 RETAINS ON ANY PORTION OF, OR  ON  ALL  OF,  THE  ELIGIBLE  PROJECT  may
 provide  that [they] SUCH MORTGAGES AND SUCH BLANKET MORTGAGE will auto-
 matically be reduced to zero over a period of continuous [owner-occupan-
 cy of the housing accommodations assisted by such  loan]  COMPLIANCE  BY
 THE  MORTGAGEE WITH A REGULATORY AGREEMENT OR OTHER RESTRICTIVE COVENANT
 WITH OR APPROVED BY THE AGENCY AND UPON THE SATISFACTION  OF  ANY  ADDI-
 TIONAL  CONDITIONS SPECIFIED THEREIN.  Notwithstanding such provision as
 contained in such mortgage, the loan shall be reduced to zero  only  if,
 prior  to  or  simultaneously with delivery of such mortgage, the agency
 made a written determination that such reduction would be  necessary  to
 ensure the continued affordability or economic viability of the eligible
 project.  Such written determination shall document the basis upon which
 the loan was determined to be eligible for evaporation. Such  period  of
 continuous  [owner-occupancy]  COMPLIANCE WITH SUCH REGULATORY AGREEMENT
 OR OTHER RESTRICTIVE COVENANT shall not be less than fifteen years.
   [5.] 4. If the eligible project is to consist  of  one  to  four  unit
 dwelling  accommodations or cooperative or condominium units, the agency
 shall require that the dwelling units  be  offered  only  to  bona  fide
 purchasers who intend to occupy a unit as their principal place of resi-
 dence;  provided, however, that in the case of two to four unit dwelling
 accommodations the bona fide purchaser may occupy only a single unit  as
 a  principal  place  of residence. If the purchaser ceases to occupy the
 unit as a principal place of  residence,  the  agency  may  provide  for
 recapture of all or a portion of the agency's share of the loan.
   [6.]  5.  If  the  eligible  project is a rental project, the agency's
 share of the loan may be converted after completion of construction into
 a [non-interest bearing, non-amortizing thirty year loan] PERMANENT LOAN
 WITH A TERM OF THIRTY-FIVE YEARS,  PROVIDED  THAT  SUCH  PERIOD  MAY  BE
 EXTENDED  AND  SHALL BE REPAID WITHIN THIRTY-FIVE YEARS, payable [at the
 end of its term, provided that such loan shall be also  payable  out  of
 profits  upon any sale or refinancing of the project prior to the end of
 such thirty year period] IN SUCH MANNER AS MAY BE PROVIDED IN  THE  NOTE
 AND  ANY  MORTGAGE  IN CONNECTION WITH SUCH LOAN. SUCH NOTE AND MORTGAGE
 MAY CONTAIN SUCH TERMS AND CONDITIONS AS THE AGENCY MAY  DEEM  NECESSARY
 OR  DESIRABLE TO EFFECTUATE THE PURPOSES AND PROVISIONS OF THIS ARTICLE.
 The sponsor or any subsequent owner or owners of such  a  project  shall
 agree  to  rent  such units only to persons of [eligible] LOW income for
 such [thirty year] period [and shall agree that all] AS THE  AGENCY  MAY
 DETERMINE.  ALL  SUCH  units  shall  be  subject to THE EMERGENCY TENANT
 PROTECTION ACT OF NINETEEN SEVENTY-FOUR AND the rent  stabilization  law
 of nineteen hundred sixty-nine, as amended [for a period of thirty years
 after initial occupancy], unless converted to a cooperative or condomin-
 A. 3669--A                         22
 
 ium  pursuant  to subdivision [eight] SEVEN of this section. [At the end
 of such period each unit shall continue to be subject to such law there-
 after until the first vacancy occurs at which time  the  unit  shall  be
 decontrolled.]  Initial rentals for all rental units shall be set by the
 agency.
   [7.] 6. If the eligible project is a  rental  project  annual  profits
 shall  be limited to an amount set by the agency for as long as the loan
 is outstanding. Excess  profits  shall  be  used  to  establish  project
 reserves, provide capital improvements or reduce the principal amount of
 the agency's loan, as determined by the agency.
   [8.]  7. If the eligible project is a rental project, no conversion to
 a cooperative or condominium shall be permitted for a period  of  twenty
 years  after initial occupancy, and unless (i) the agency's share of the
 loan is prepaid upon such conversion, (ii) the conversion shall be  done
 pursuant to section three hundred fifty-two-eeee of the general business
 law  as  a  non-eviction plan, and (iii) apartments occupied by non-pur-
 chasing tenants continue to be subject to the rent stabilization law  of
 nineteen hundred sixty-nine as amended, until the occurrence of a vacan-
 cy.
   [9.]  8. A loan made pursuant to this article shall be exempt from the
 mortgage recording taxes imposed by article eleven of the tax law.
   [10.] 9. Notwithstanding the provisions of  any  general,  special  or
 local  law  or  charter, the agency shall have power, without soliciting
 competing bids, to contract with any sponsor or to make provision  in  a
 loan  for  the  construction  or reconstruction of any site improvements
 located in the public right-of-way OR ON THE  ELIGIBLE  SITE  which  are
 necessary for the development of an eligible project. Such site improve-
 ments  may  include,  but  shall  not be limited to, streets, sidewalks,
 LANDSCAPING, PARKS AND OPEN SPACE, SOCIAL,  RECREATIONAL,  COMMUNAL  AND
 OTHER  NON-RESIDENTIAL  FACILITIES  AND THE OUTFITTING THEREOF, lighting
 fixtures, and water and sewer lines.
   [11.] 10. No loan shall be made pursuant to  the  provisions  of  this
 article unless the agency finds that: (a) the construction of the eligi-
 ble  project  does not directly displace current low and moderate income
 residents of the eligible  site;  (b)  the  eligible  project  leverages
 private  and other public investment, if any, so as to reduce the amount
 of assistance provided pursuant to this article to  the  minimal  amount
 which  is  necessary  for  construction of the eligible project; (c) the
 eligible project will be built by a private  developer/builder  who  has
 agreed  to limit its profit in accordance with a formula satisfactory to
 the agency; (d) the eligible project will provide assistance to an  area
 which  is  blighted  or deteriorated or has a blighting influence on the
 surrounding area, or is in danger of becoming a slum or a blighted  area
 because of neighborhood conditions indicating an inability or unwilling-
 ness of the private sector to cause the type of construction for which a
 loan  is  to  be  provided;  and (e) the eligible project will make home
 ownership or rental housing affordable to persons who  cannot  presently
 afford  the  housing available based upon the ordinary unaided operation
 of private enterprise.
   [12.] 11. a. The agency may  make  non-interest  bearing  advances  to
 sponsors  to  defray  the  pre-development costs of eligible projects in
 accordance with the provisions of this chapter.
   b. No such advances shall be made unless the agency  finds  that:  (i)
 the sponsor proposes to finance the eligible project in whole or in part
 by  a  loan  granted  pursuant  to  this article or that the project, if
 otherwise financed, will provide housing for persons or families of  low
 A. 3669--A                         23

 income,  and that such project is otherwise consistent with the purposes
 of this article; (ii) the project site is suitable, there is a need  for
 the  housing  type  proposed in the area to be served and the project is
 feasible;  and  (iii) it is reasonable to anticipate that financing will
 be obtained and the agency makes a finding to that effect.
   c. No such advances may be made  to  a  sponsor  unless  such  sponsor
 enters  into an agreement with the agency which provides that such spon-
 sor shall be regulated with respect to  rents,  profits,  dividends  and
 disposition  of  its  property  or  franchise,  in  accordance  with the
 provisions of this article.
   d. An advance granted pursuant to this section shall be used  only  to
 defray  the  pre-development costs of eligible projects. For purposes of
 this subdivision, the term  pre-development  costs  shall  include,  but
 shall  not  be  limited to: the reasonable and necessary costs for plan-
 ning, site preparation, developing architectural drawings and conducting
 engineering and environmental studies, but shall not include acquisition
 of  land  or  buildings,  drainage  and  landscaping  of  vacant   land,
 construction of new buildings or the reconstruction or rehabilitation of
 existing buildings.
   e.  Each  such  advance  shall  be repaid in full to the agency by the
 sponsor. Such repayment shall be made upon receipt by the sponsor or its
 successor in interest of the proceeds of its  mortgage  or  construction
 loan  for the eligible project, unless the agency extends the period for
 the repayment of such advances. In no event shall the time of  repayment
 be  extended  to  a  date  later than the date of final advance of funds
 pursuant to such mortgage or  construction  loan.  Notwithstanding  this
 paragraph,  the  agency may reduce such advance to zero over a period of
 continued compliance with the agency's agreement with the sponsor pursu-
 ant to paragraph c of this subdivision if the agency has made a  written
 determination  that  such  reduction  would  be  necessary to ensure the
 continued affordability or economic viability of the  eligible  project.
 Such written determination shall document the basis upon which the agen-
 cy's  non-interest  bearing  advance  was determined eligible for evapo-
 ration.
   f. If the agency, in its discretion, determines at any time that mort-
 gage or construction financing for  the  eligible  project  may  not  be
 obtained,  then all advances made to the sponsor pursuant to this subdi-
 vision shall become immediately due and payable upon the demand  of  the
 agency.
   [13.]  12.  If  the  eligible project is a rental project, the bond or
 note and mortgage or bonds or notes or mortgages issued by  the  sponsor
 of  any eligible project to secure a participation loan may provide that
 the city's portion of such loan shall be reduced to zero  commencing  on
 the fifteenth year after the execution of such bond or note and mortgage
 or  bonds  or  notes  or mortgages, provided that, as of the date of any
 such reduction, the eligible project has been and continues to be  owned
 and operated in a manner consistent with a regulatory agreement with the
 city.  Notwithstanding  such  provision as contained in the bond or note
 and mortgage or bonds or notes or mortgages, the loan shall  be  reduced
 to  zero  only if, prior to or simultaneously with delivery of such bond
 or note and mortgage or bonds or notes or mortgages, the agency  made  a
 written  determination  that such reduction would be necessary to ensure
 the continued  affordability  or  economic  viability  of  the  eligible
 project.  Such written determination shall document the basis upon which
 the loan was determined to be eligible for evaporation.
 A. 3669--A                         24
 
   § 34. This act shall take effect immediately, provided, however,  that
 the  amendments to subdivision 1 of section 696-a of the general munici-
 pal law made by section one of this act shall be subject to the  expira-
 tion  and reversion of such subdivision pursuant to section 2 of chapter
 613  of the laws of 1996, as amended, when upon such date the provisions
 of section two of this act shall take effect.