S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2985
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 26, 2023
                                ___________
 
 Introduced  by  Sens.  KAVANAGH,  CLEARE,  SEPULVEDA  --  read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Housing, Construction and Community Development
 
 AN  ACT  to  amend the private housing finance law and the local finance
   law, in relation to affordable housing in cities having  a  population
   of one million or more
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The private housing finance law is amended by adding a  new
 article 32 to read as follows:
                               ARTICLE XXXII
                        AFFORDABILITY PLUS PROGRAM
 SECTION 1290. SHORT TITLE.
         1291. STATEMENT OF LEGISLATIVE FINDINGS AND PURPOSE.
         1292. DEFINITIONS.
         1293. LOANS AND GRANTS.
         1294. RENTS.
         1295. RULES; ENFORCEMENT.
         1296. SEVERABILITY.
         1297. REPORTING.
   §  1290.  SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
 THE "AFFORDABILITY  PLUS PROGRAM".
   § 1291. STATEMENT OF LEGISLATIVE FINDINGS AND PURPOSE. THE LEGISLATURE
 HEREBY FINDS AND DECLARES THAT THERE IS, IN CITIES HAVING  A  POPULATION
 OF  ONE MILLION OR MORE, A SERIOUSLY INADEQUATE SUPPLY OF SAFE AND SANI-
 TARY HOUSING ACCOMMODATIONS WITHIN THE FINANCIAL REACH OF  FAMILIES  AND
 PERSONS OF LOW INCOME. THIS CONDITION IS CONTRARY TO THE PUBLIC INTEREST
 AND  THREATENS  THE HEALTH, SAFETY, WELFARE, COMFORT AND SECURITY OF THE
 PEOPLE OF SUCH CITIES. THE LEGISLATURE FURTHER FINDS AND  DECLARES  THAT
 THE ORDINARY OPERATIONS OF PRIVATE ENTERPRISE CANNOT PROVIDE AN ADEQUATE
 SUPPLY  OF  SAFE  AND SANITARY HOUSING ACCOMMODATIONS AT RENTAL AND SALE

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07187-01-3
              

 S. 2985                             2
 
 PRICES THAT FAMILIES AND PERSONS OF LOW INCOME CAN  AFFORD.  IT  IS  THE
 PURPOSE  OF  THIS ACT TO PROVIDE LOANS AND GRANTS TO INCREASE THE SUPPLY
 OF HOUSING ACCOMMODATIONS FOR FAMILIES AND PERSONS OF  LOW  INCOME,  AND
 THEREBY IMPROVE THE QUALITY OF LIFE FOR ALL THE PEOPLE OF SUCH CITIES.
   §  1292.  DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1. "AGENCY" SHALL MEAN A DEPARTMENT OF HOUSING PRESERVATION AND DEVEL-
 OPMENT IN A CITY HAVING A POPULATION OF ONE MILLION OR MORE.
   2. "HOUSING ACCOMMODATIONS" SHALL MEAN:  (A)  A  PRIVATE  OR  MULTIPLE
 DWELLING,  OR  ANY  OTHER  STRUCTURE  CONTAINING DWELLING UNITS, ROOMING
 UNITS OR SLEEPING ACCOMMODATIONS, TOGETHER WITH THE LAND ON  WHICH  SUCH
 STRUCTURE  IS  SITUATED;  (B)  ANY REAL PROPERTY TO BE CONVERTED TO SUCH
 USER; OR (C) ALL OR A PORTION OF THE DWELLING UNITS,  ROOMING  UNITS  OR
 SLEEPING ACCOMMODATIONS THEREIN.
   3.  "OWNER"  SHALL MEAN A PERSON HAVING RECORD OR BENEFICIAL OWNERSHIP
 OF REAL PROPERTY OR A LESSEE OF REAL PROPERTY HAVING AN  UNEXPIRED  TERM
 OF AT LEAST THIRTY YEARS.
   4.  "REGULATORY  AGREEMENT"  SHALL  MEAN  A  WRITTEN AGREEMENT WITH OR
 APPROVED BY A CITY HAVING A POPULATION  OF  ONE  MILLION  OR  MORE  THAT
 REQUIRES  THE  PROVISION  OF  HOUSING  ACCOMMODATIONS  FOR  FAMILIES AND
 PERSONS OF LOW INCOME, IS ENTERED INTO ON OR AFTER THE EFFECTIVE DATE OF
 THIS ARTICLE, SPECIFICALLY PROVIDES THAT IT IS ENTERED INTO PURSUANT  TO
 THIS  ARTICLE, IS RECORDED AGAINST ONE OR MORE PARCELS OF REAL PROPERTY,
 AND BINDS THE OWNER  OF  SUCH  REAL  PROPERTY  AND  ITS  SUCCESSORS  AND
 ASSIGNS.  A REGULATORY AGREEMENT MAY INCLUDE SUCH OTHER TERMS AND CONDI-
 TIONS AS SUCH CITY SHALL DETERMINE.
   5. "RENT STABILIZATION" SHALL MEAN, COLLECTIVELY, THE RENT  STABILIZA-
 TION  LAW  OF  NINETEEN HUNDRED SIXTY-NINE, THE RENT STABILIZATION CODE,
 AND THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR, ALL AS
 IN EFFECT AS OF THE EFFECTIVE DATE OF THIS ARTICLE OR AS AMENDED  THERE-
 AFTER,  TOGETHER  WITH  ANY SUCCESSOR STATUTES OR REGULATIONS ADDRESSING
 SUBSTANTIALLY THE SAME SUBJECT MATTER.
   § 1293. LOANS AND GRANTS. 1. NOTWITHSTANDING  THE  PROVISIONS  OF  ANY
 GENERAL, SPECIAL OR LOCAL LAW, A CITY HAVING A POPULATION OF ONE MILLION
 OR  MORE  IS AUTHORIZED TO MAKE LOANS OR GRANTS TO THE OWNER OF ANY REAL
 PROPERTY FOR THE PURPOSE OF: (A) CONSTRUCTION,  REHABILITATION,  CONVER-
 SION,  ACQUISITION OR REFINANCING OF HOUSING ACCOMMODATIONS; (B) PROVID-
 ING SITE IMPROVEMENTS, INCLUDING, BUT NOT LIMITED TO,  WATER  AND  SEWER
 FACILITIES,  SIDEWALKS,  LANDSCAPING,  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 (C)  PROVIDING  FOR  OTHER
 COSTS OF DEVELOPING HOUSING ACCOMMODATIONS.
   2. ANY LOAN MADE IN ACCORDANCE WITH THIS SECTION SHALL BE EVIDENCED BY
 A  NOTE  AND  MAY BE SECURED BY: (A) A MORTGAGE UPON THE INTEREST OF THE
 OWNER IN THE REAL PROPERTY ASSISTED; (B) IN THE CASE OF A CONDOMINIUM, A
 MORTGAGE UPON EACH OF THE HOUSING ACCOMMODATIONS ASSISTED BY  SUCH  LOAN
 OR;  (C)  IN  THE CASE OF A COOPERATIVE HOUSING CORPORATION, A LIEN UPON
 THE ECONOMIC INTEREST IN SUCH  CORPORATION  OF  EACH  TENANT-SHAREHOLDER
 ASSISTED BY SUCH LOAN, OR A MORTGAGE UPON THE REAL PROPERTY ASSISTED, OR
 BOTH  SUCH LIEN AND SUCH MORTGAGE. ANY SUCH MORTGAGE MAY BE CONSOLIDATED
 WITH A MUNICIPALLY-AIDED MORTGAGE THAT ENCUMBERS THE  REAL  PROPERTY  AT
 THE  TIME  OF  THE  MAKING  OF  THE  LOAN  PURSUANT TO THIS SECTION. FOR
 PURPOSES OF THIS ARTICLE, 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
 S. 2985                             3
 
 INTENDED  AS SECURITY FOR THE PERFORMANCE OF AN OBLIGATION AND IMPOSES A
 LIEN ON OR AFFECTS TITLE TO SUCH SHARES OR SUCH PROPRIETARY LEASE.
   3.  THE  REPAYMENT  OF  ANY  LOAN MADE IN ACCORDANCE WITH THIS SECTION
 SHALL BE MADE 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  CITY  MAY  DEEM  NECESSARY  OR
 DESIRABLE  TO  EFFECTUATE  THE  PURPOSES AND PROVISIONS OF THIS ARTICLE.
 SUCH TERMS AND CONDITIONS MAY INCLUDE, BUT  SHALL  NOT  BE  LIMITED  TO,
 PROVISIONS  CONCERNING: (A) THE REPAYMENT OF THE LOAN; (B) THE INTEREST,
 IF ANY, THEREON; (C) THE CHARGES, IF ANY, IN CONNECTION  THEREWITH;  AND
 (D)  THE PREPAYMENT OF THE PRINCIPAL OF THE LOAN. SUCH NOTE AND MORTGAGE
 MAY PROVIDE THAT ALL OR A PORTION OF THE PRINCIPAL  OF  THE  LOAN  SHALL
 AUTOMATICALLY  BE REDUCED TO ZERO OVER A PERIOD OF CONTINUOUS COMPLIANCE
 BY THE OWNER WITH A REGULATORY AGREEMENT AND UPON  THE  SATISFACTION  OF
 ANY   ADDITIONAL  CONDITIONS  SPECIFIED  THEREIN.  NOTWITHSTANDING  SUCH
 PROVISION AS CONTAINED IN THE NOTE AND MORTGAGE, ALL OR A PORTION OF THE
 PRINCIPAL OF THE LOAN SHALL BE REDUCED TO ZERO  ONLY  IF,  PRIOR  TO  OR
 SIMULTANEOUSLY  WITH DELIVERY OF SUCH NOTE AND MORTGAGE, THE AGENCY MADE
 A WRITTEN DETERMINATION THAT SUCH REDUCTION WOULD BE NECESSARY TO ENSURE
 THE CONTINUED AFFORDABILITY OR ECONOMIC VIABILITY OF THE HOUSING  ACCOM-
 MODATIONS  ASSISTED BY SUCH LOAN. SUCH WRITTEN DETERMINATION SHALL DOCU-
 MENT THE BASIS UPON WHICH THE LOAN WAS DETERMINED  TO  BE  ELIGIBLE  FOR
 EVAPORATION.
   4.  THE  CITY SHALL REQUIRE THE OWNER OF ANY REAL PROPERTY THAT IS THE
 SUBJECT OF A LOAN OR GRANT PURSUANT  TO  THIS  SECTION  TO  EXECUTE  AND
 RECORD  A  REGULATORY  AGREEMENT HAVING A TERM COMMENCING NOT LATER THAN
 THE DATE OF SUCH LOAN OR GRANT. THE REGULATORY AGREEMENT  SHALL  PROVIDE
 THAT THE OWNER SHALL RENT OR SELL ALL HOUSING ACCOMMODATIONS REQUIRED TO
 BE  OCCUPIED  BY  FAMILIES  AND PERSONS OF LOW INCOME AT RENTAL OR SALES
 PRICES THAT DO NOT EXCEED, AVERAGING ALL HOUSING ACCOMMODATIONS REQUIRED
 TO BE OCCUPIED BY FAMILIES AND PERSONS OF LOW INCOME BY  THE  REGULATORY
 AGREEMENT,  RENTAL  OR  SALES  PRICES  THAT ARE AFFORDABLE TO HOUSEHOLDS
 EARNING ONE HUNDRED TWENTY PERCENT OF THE AREA MEDIAN  INCOME,  ADJUSTED
 FOR HOUSEHOLD SIZE.
   5.  THE CITY SHALL NOT MAKE ANY LOAN OR GRANT PURSUANT TO THIS SECTION
 UNLESS THE AGENCY HAS MADE A WRITTEN DETERMINATION, WHICH SHALL BE STAT-
 ED OR REFERENCED IN THE REGULATORY AGREEMENT, THAT SUCH LOAN OR GRANT IS
 NECESSARY TO ENSURE THE AFFORDABILITY OR ECONOMIC VIABILITY OF THE HOUS-
 ING ACCOMMODATIONS IN ACCORDANCE WITH THE TERMS OF THE REGULATORY AGREE-
 MENT.
   6. AT THE DISCRETION OF THE AGENCY, A MORTGAGE SECURING  A  LOAN  MADE
 PURSUANT TO THIS SECTION MAY BE EXEMPT FROM THE TAX ON MORTGAGES IMPOSED
 BY  ARTICLE  ELEVEN  OF  THE TAX LAW AND THE TAX ON MORTGAGES IMPOSED BY
 CHAPTER TWENTY-SIX OF TITLE ELEVEN OF THE  ADMINISTRATIVE  CODE  OF  THE
 CITY OF NEW YORK.
   7. AT THE DISCRETION OF THE AGENCY, ANY TRANSFER OF REAL PROPERTY MADE
 IN  CONNECTION WITH A LOAN OR GRANT MADE PURSUANT TO THIS SECTION MAY BE
 EXEMPT FROM THE REAL ESTATE TRANSFER TAX IMPOSED BY  ARTICLE  THIRTY-ONE
 OF  THE  TAX  LAW  AND THE REAL PROPERTY TRANSFER TAX IMPOSED BY CHAPTER
 TWENTY-ONE OF TITLE ELEVEN OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW
 YORK.
   8. THE AGENCY MAY MAKE PROVISIONS, EITHER IN THE MORTGAGE OR BY  SEPA-
 RATE  AGREEMENT,  FOR  THE PERFORMANCE OF SUCH LOAN SERVICING FUNCTIONS,
 INCLUDING FUNCTIONS RELATED TO CONSTRUCTION LENDING, AS MAY GENERALLY BE
 PERFORMED BY AN INSTITUTIONAL LENDER. THE AGENCY MAY ACT IN SUCH CAPACI-
 TY OR APPOINT OR CONSENT TO THE APPOINTMENT OF A  FINANCIAL  INSTITUTION
 S. 2985                             4
 
 TO  ACT  IN SUCH CAPACITY ON BEHALF OF THE AGENCY. THE AGENCY IS AUTHOR-
 IZED TO PAY A REASONABLE AND CUSTOMARY FEE TO SUCH FINANCIAL INSTITUTION
 FOR THE PERFORMANCE OF SUCH SERVICES.
   § 1294. RENTS. NOTWITHSTANDING THE PROVISIONS OF RENT STABILIZATION OR
 THE LOCAL EMERGENCY HOUSING RENT CONTROL ACT, OR ANY REGULATION OR LOCAL
 LAW ENACTED PURSUANT THERETO:
   1.  THE  REGULATORY  AGREEMENT SHALL PROVIDE THAT ALL HOUSING ACCOMMO-
 DATIONS REQUIRED TO BE OCCUPIED BY FAMILIES AND PERSONS  OF  LOW  INCOME
 SHALL  BE  SUBJECT TO RENT STABILIZATION AS OF THE EFFECTIVE DATE OF THE
 REGULATORY AGREEMENT; PROVIDED, HOWEVER, THAT THE AGENCY MAY EXEMPT FROM
 THE REQUIREMENTS OF THIS SECTION ANY HOUSING  ACCOMMODATIONS  THAT  ARE:
 (A)  LOCATED  IN A STRUCTURE CONTAINING FEWER THAN SIX DWELLING UNITS OR
 ROOMING UNITS; (B) TO BE OCCUPIED ON A TRANSITIONAL BASIS BY PERSONS WHO
 ARE FORMERLY HOMELESS OR HAVE SPECIAL NEEDS;  (C)  SUBJECT  TO  ANY  LAW
 PROVIDING  FOR  THE  REGULATION  OF  RENTS  BY  A GOVERNMENTAL AGENCY OR
 INSTRUMENTALITY; OR (D) TO BE OCCUPIED  AS  HOMEOWNERSHIP,  RATHER  THAN
 RENTAL, HOUSING ACCOMMODATIONS.
   2. EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISION ONE OF THIS SECTION, IF
 ANY  HOUSING  ACCOMMODATIONS  REQUIRED  TO  BE  OCCUPIED BY FAMILIES AND
 PERSONS OF LOW INCOME ARE NOT SUBJECT TO RENT STABILIZATION  AS  OF  THE
 EFFECTIVE  DATE  OF THE REGULATORY AGREEMENT, THE AGENCY SHALL ESTABLISH
 THE INITIAL RENTS FOR SUCH HOUSING ACCOMMODATIONS AS OF SUCH DATE.
   3. UPON COMPLETION OF THE CONSTRUCTION OR REHABILITATION OF A  HOUSING
 ACCOMMODATION WHICH IS ASSISTED BY A LOAN OR GRANT MADE BY A CITY PURSU-
 ANT  TO  SECTION TWELVE HUNDRED NINETY-THREE OF THIS ARTICLE, THE AGENCY
 MAY ESTABLISH A NEW INITIAL RENT FOR EACH DWELLING UNIT SUBJECT TO  RENT
 STABILIZATION  WITHIN  THE HOUSING ACCOMMODATION PURSUANT TO SUBDIVISION
 ONE OF THIS SECTION OR OTHERWISE. PRIOR TO THE  MAKING  OF  A  REHABILI-
 TATION  LOAN  OR  GRANT PURSUANT TO THIS ARTICLE, THE AGENCY SHALL CAUSE
 EACH TENANT IN OCCUPANCY OF A DWELLING UNIT FOR WHICH THE AGENCY INTENDS
 TO ESTABLISH A NEW INITIAL RENT TO BE NOTIFIED OF AND HAVE  AN  OPPORTU-
 NITY  TO  COMMENT  ON THE CONTEMPLATED REHABILITATION. SUCH NOTIFICATION
 SHALL ADVISE SUCH TENANTS OF THE APPROXIMATE EXPECTED INITIAL RENT. SUCH
 NOTIFICATION AND OPPORTUNITY TO COMMENT SHALL  BE  PROVIDED  BEFORE  THE
 REHABILITATION AND AGAIN AFTER THE REHABILITATION IS COMPLETED AND PRIOR
 TO  THE  ESTABLISHMENT OF THE NEW INITIAL RENTS. A REPRESENTATIVE OF THE
 AGENCY SHALL MEET OR OFFER TO MEET WITH  ALL  TENANTS  IN  OCCUPANCY  OF
 DWELLING  UNITS  AFFECTED BY THE PROVISIONS OF THIS SUBDIVISION AT LEAST
 ONCE BEFORE THE REHABILITATION.
   § 1295. RULES; ENFORCEMENT. 1. THE  AGENCY  MAY  PROMULGATE  RULES  TO
 CARRY  OUT  THE PROVISIONS OF THIS ARTICLE, AND MAY REQUIRE A FILING FEE
 IN AN AMOUNT EQUAL TO ONE THOUSAND DOLLARS PER DWELLING  UNIT,  OR  SUCH
 LESSER  AMOUNT  AS MAY BE PROVIDED BY SUCH RULES, IN CONNECTION WITH ANY
 APPLICATION FOR A LOAN OR GRANT PURSUANT TO THIS ARTICLE.
   2. THE AGENCY SHALL HAVE THE  POWER  TO:  (A)  SUBPOENA,  REQUIRE  THE
 ATTENDANCE  OF AND EXAMINE AND TAKE TESTIMONY UNDER OATH OF SUCH PERSONS
 AS IT MAY DEEM NECESSARY IN ORDER TO MONITOR AND ENFORCE COMPLIANCE WITH
 THE REGULATORY AGREEMENT; AND (B) SUBPOENA AND REQUIRE THE PRODUCTION OF
 BOOKS, ACCOUNTS, PAPERS, DOCUMENTS AND OTHER EVIDENCE  RELATED  TO  SUCH
 MONITORING AND ENFORCEMENT.
   §  1296.  SEVERABILITY. IF ANY CLAUSE, SENTENCE, PARAGRAPH, SECTION OR
 PART OF THIS ARTICLE SHALL BE ADJUDGED BY ANY COURT OF COMPETENT  JURIS-
 DICTION TO BE INVALID, SUCH JUDGMENT SHALL NOT AFFECT, IMPAIR OR INVALI-
 DATE  THE  REMAINDER  THEREOF, BUT SHALL BE CONFINED IN ITS OPERATION TO
 THE CLAUSE,  SENTENCE,  PARAGRAPH,  SECTION  OR  PART  THEREOF  DIRECTLY
 S. 2985                             5
 
 INVOLVED  IN  THE  CONTROVERSY  IN  WHICH  SUCH JUDGMENT SHALL HAVE BEEN
 RENDERED.
   §  1297.  REPORTING.  ON  OR  BEFORE SEPTEMBER THIRTIETH OF EACH YEAR,
 BEGINNING IN TWO THOUSAND TWENTY-FOUR, THE AGENCY SHALL SUBMIT A  REPORT
 TO THE TEMPORARY PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY
 ON THE HOUSING PRODUCTION ACTIVITY OF THE AFFORDABILITY PLUS PROGRAM FOR
 THE PREVIOUS CITY FISCAL YEAR.
   §  2.  Subdivision  a  of  section  11.00  of the local finance law is
 amended by adding a new paragraph 41-f to read as follows:
   41-F. AFFORDABILITY PLUS PROGRAM.  THE  MAKING  OF  LOANS  OR  GRANTS,
 PURSUANT TO ARTICLE THIRTY-TWO OF THE PRIVATE HOUSING FINANCE LAW, THIR-
 TY YEARS; IMPROVEMENTS ASSOCIATED WITH THE CONSTRUCTION, REHABILITATION,
 CONVERSION, ACQUISITION OR REFINANCING OF HOUSING ACCOMMODATIONS, PURSU-
 ANT  TO  ARTICLE  THIRTY-TWO  OF THE PRIVATE HOUSING FINANCE LAW, THIRTY
 YEARS.
   § 3. This act shall take effect immediately.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2985--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 26, 2023
                                ___________
 
 Introduced by Sens. KAVANAGH, CLEARE, FERNANDEZ, SEPULVEDA -- read twice
   and ordered printed, and when printed to be committed to the Committee
   on  Housing,  Construction  and  Community  Development  --  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,  the
   private  housing  finance  law,  and  the  New  York  city charter, in
   relation to enacting the "housing affordability, resiliency, and ener-
   gy efficiency investment act of 2023"
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Short  title. This act shall be known and may be cited as
 the "housing affordability, resiliency, and energy efficiency investment
 act of 2023".
   § 2. 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 OR CONSTRUCTION OF A  NEW  PRIVATE
 OR  MULTIPLE  DWELLING,  (ii) providing site improvements, INCIDENTAL OR
 APPURTENANT TO SUCH REHABILITATION  OR  SUCH  CONSTRUCTION,  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, 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,  or  (iii)
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07187-03-3
              

 S. 2985--A                          2
 
 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 improved, OTHER THAN ANY SUCH PROP-
 ERTY TITLE TO WHICH IS HELD BY THE MUNICIPALITY or, in  the  case  of  a
 condominium,  a  note  and  mortgage  upon each of the [housing accommo-
 dations] CONDOMINIUM UNITS aided by such loan, or in the case of a coop-
 erative 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 improved, OTHER THAN ANY SUCH PROPERTY  TITLE
 TO  WHICH IS HELD BY THE MUNICIPALITY, or upon both such economic inter-
 est or property; provided, however, that all or part of  any  such  loan
 may be unsecured if necessary to satisfy the requirements of any partic-
 ipating lender, AND, PROVIDED FURTHER, THAT THE LIEN CREATED BY THE NOTE
 AND  MORTGAGE  MAY  BE  RECORDED IN AN EQUAL OR SUBORDINATE POSITION, OR
 SUBSEQUENTLY MADE EQUAL OR  SUBORDINATE,  TO  A  LIEN  RECORDED  BY  ANY
 PARTICIPATING  LENDER  AGAINST  SUCH PROPERTY. Such loan shall be repaid
 over such period as the agency shall determine.
   g. For purposes of this [section] ARTICLE,  (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  obli-
 gation  and  which  imposes a lien on or affects title to such shares or
 such proprietary lease; AND (II) THE TERM "OWNER" SHALL MEAN AN INDIVID-
 UAL, 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 PROPERTY OR THE LESSEE
 THEREOF UNDER A LEASE HAVING A TERM OF AT LEAST FORTY-NINE YEARS.
   § 3. 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 OR CONSTRUCTION OF  A
 NEW  PRIVATE  OR  MULTIPLE DWELLING, (ii) [for the purpose of] providing
 site improvements, INCIDENTAL OR APPURTENANT TO SUCH  REHABILITATION  OR
 SUCH CONSTRUCTION, 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) [for the purpose of] providing for other  costs
 of  construction  for  the  development 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 corporation, such grant shall require a regulato-
 ry agreement with the agency limiting profits. Any loan made in  accord-
 ance  with this section shall be secured by a note and mortgage upon the
 property improved, OTHER THAN ANY SUCH PROPERTY TITLE TO WHICH  IS  HELD
 BY  THE MUNICIPALITY, or, in the case of a condominium, a note and mort-
 gage upon each of the [housing accommodations] CONDOMINIUM  UNITS  aided
 S. 2985--A                          3
 
 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  improved,
 OTHER THAN ANY SUCH PROPERTY TITLE TO WHICH IS HELD BY THE MUNICIPALITY,
 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 ownership  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 accommo-
 dations or a condominium or cooperative housing corporation,  such  note
 and mortgage may provide that the loan shall automatically be reduced to
 zero  over  a  period  of  owner-occupancy of the housing 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 housing 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 principal of the loan subject
 to such terms and conditions as therein provided. Such note and mortgage
 may contain such other terms and conditions 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] ARTICLE, (1) the term "mortgage" shall
 include any pledge or assignment of shares or assignment of  a  proprie-
 tary  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 (2) THE TERM "OWNER" SHALL  MEAN  AN  INDIVIDUAL,
 PARTNERSHIP,  CORPORATION OR OTHER ENTITY, INCLUDING A NON-PROFIT COMPA-
 NY, A MUTUAL COMPANY, OR A  HOUSING  DEVELOPMENT  FUND  COMPANY,  HAVING
 RECORD  OR BENEFICIAL TITLE IN FEE SIMPLE TO REAL PROPERTY OR THE LESSEE
 THEREOF UNDER A LEASE HAVING A TERM OF AT LEAST FORTY-NINE YEARS.
   § 4. The general municipal law is amended by adding two  new  sections
 696-e and 696-f to read as follows:
   § 696-E. CHARGES. A MUNICIPALITY, OR AN AGENCY, MAKING A LOAN OR GRANT
 PURSUANT TO THIS ARTICLE, MAY REQUIRE THE PAYMENT OF CHARGES BY AN OWNER
 IN CONSIDERATION FOR THE FINANCING, REGULATION, SUPERVISION AND AUDIT OF
 SUCH  LOAN, OR FOR REGULATION, SUPERVISION AND AUDIT OF SUCH GRANT. SUCH
 CHARGES SHALL BE PAID INTO THE TREASURY OF  THE  MUNICIPALITY  REQUIRING
 THE  CHARGES  AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND OF ANY
 SUCH MUNICIPALITY.
   § 696-F. SERVICING. AN AGENCY MAY MAKE PROVISION IN A  NOTE  AND  LOAN
 AGREEMENT  OR BY SEPARATE AGREEMENT FOR THE PERFORMANCE OF LOAN OR GRANT
 S. 2985--A                          4
 
 SERVICING FUNCTIONS, INCLUDING, BUT NOT LIMITED TO, FUNCTIONS RELATED TO
 LENDING OR PROVIDING A GRANT  FOR  CONSTRUCTION,  AS  MAY  GENERALLY  BE
 PERFORMED BY AN INSTITUTIONAL LENDER. SUCH AGENCY MAY ACT IN SUCH CAPAC-
 ITY  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 MAY PAY A REASONABLE AND
 CUSTOMARY FEE TO SUCH FINANCIAL INSTITUTION OR  OTHER  QUALIFIED  ENTITY
 APPOINTED  BY  SUCH AGENCY, OR TO WHOSE APPOINTMENT SUCH AGENCY PROVIDED
 CONSENT, FOR THE PERFORMANCE OF SUCH LOAN OR GRANT SERVICING FUNCTIONS.
   § 5. 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
 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.
   § 6. Section 2 of the private housing finance law is amended by adding
 two new subdivisions 30 and 31 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.
   31. "PRIVATE LENDER." ONE OR MORE BANKING ORGANIZATIONS,  FOUNDATIONS,
 LABOR  UNIONS,  CREDIT UNIONS, EMPLOYERS' ASSOCIATIONS, VETERANS' ORGAN-
 IZATIONS, COLLEGES, UNIVERSITIES, EDUCATIONAL INSTITUTIONS,  CHILD  CARE
 INSTITUTIONS,  HOSPITALS,  MEDICAL RESEARCH INSTITUTES, INSURANCE COMPA-
 NIES, TRUSTEES OR FIDUCIARIES, TRUSTEES OF PENSIONS AND RETIREMENT FUNDS
 AND SYSTEMS, CORPORATIONS, PARTNERSHIPS, INDIVIDUALS OR  OTHER  ENTITIES
 OR  ANY COMBINATION OF THE FOREGOING, AND SHALL INCLUDE ANY PUBLIC BENE-
 FIT CORPORATION AND THE UNITED STATES OF AMERICA AND ANY OF ITS AGENCIES
 AND DEPARTMENTS. AS USED IN THIS DEFINITION, 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.
 S. 2985--A                          5

   § 7. 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.
   § 8. 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
 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].
 S. 2985--A                          6
 
   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.
   § 9. 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.
   § 10. 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,
 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 ARTICLE, 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.
   § 11. Subdivisions 2-a, 2-b, 2-c and 4 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:
 S. 2985--A                          7
 
   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 and the land upon which
 it is situated, PROVIDED THAT WHERE THE MULTIPLE DWELLING IS HELD IN THE
 CONDOMINIUM FORM OF OWNERSHIP, SUCH LOAN SHALL BE SECURED BY A BOND  AND
 MORTGAGE  OR  NOTE AND MORTGAGE UPON THE CONDOMINIUM UNITS REHABILITATED
 OR IMPROVED WITH SUCH LOAN; where the loan is made to an owner who is  a
 lessee,  such loan shall be secured by [a first lien on such property] A
 LEASEHOLD INTEREST IN 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-
 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
 S. 2985--A                          8

 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]  FORTY  years,  PROVIDED  THAT  SUCH
 PERIOD  MAY  BE EXTENDED AS THE AGENCY MAY DETERMINE NECESSARY TO ENSURE
 THE CONTINUED AFFORDABILITY OR ECONOMIC VIABILITY OF THE MULTIPLE DWELL-
 ING, 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], INCLUDING, BUT NOT LIMITED TO, PROVIDING THAT THE LIEN CREATED BY
 SUCH BOND AND MORTGAGE OR NOTE AND MORTGAGE,  AND,  IF  APPLICABLE,  ANY
 REGULATORY AGREEMENT EXECUTED BY THE OWNER AND THE AGENCY OR RESTRICTIVE
 COVENANT  APPROVED BY SUCH AGENCY, MAY BE RECORDED IN AN EQUAL OR SUBOR-
 DINATE POSITION, OR SUBSEQUENTLY MADE EQUAL OR SUBORDINATE,  TO  A  LIEN
 RECORDED BY ANY PRIVATE LENDER AGAINST SUCH MULTIPLE DWELLING.
   [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.
   4. The agency may [charge the] REQUIRE THE PAYMENT OF  CHARGES  BY  AN
 owner  of  such multiple dwelling [reasonable fees] IN CONSIDERATION for
 THE financing, regulation, supervision and audit OF SUCH LOAN. Such fees
 shall be [kept by the municipality in a separate fund to be known as the
 housing rehabilitation fund and shall be used to pay for the expenses of
 the municipality in administering and carrying  out  the  provisions  of
 this  article]  PAID INTO THE TREASURY OF THE MUNICIPALITY REQUIRING THE
 CHARGES AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND OF ANY  SUCH
 MUNICIPALITY.
   § 12. 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:
   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
 S. 2985--A                          9

 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.
   [5. Any person or family whose removal is required by any provision of
 this article shall be subject to removal by summary proceedings.]
 S. 2985--A                         10

   §  13.  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:
   § 14. 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.
   § 15. 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.
   § 16. 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:
   1.  Notwithstanding  the  provisions  of any general, special or local
 law, a municipality is hereby authorized:
 S. 2985--A                         11
 
   (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 ARTICLE, 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.
   § 17. Subdivisions 2 and 5 of  section  452  of  the  private  housing
 finance law, subdivision 2 as amended by chapter 408 of the laws of 2009
 and  subdivision  5  as  amended by chapter 273 of the laws of 1975, are
 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 FORTY YEARS, PROVIDED THAT SUCH PERIOD MAY BE EXTENDED AS THE  SUPER-
 VISING  AGENCY  MAY DETERMINE NECESSARY TO ENSURE THE CONTINUED AFFORDA-
 BILITY OR ECONOMIC VIABILITY OF THE EXISTING  MULTIPLE  DWELLING.    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 AND PROVISIONS PERMIT-
 TING  THE  LIEN CREATED BY SUCH NOTE AND MORTGAGE, AND, IF APPLICABLE, A
 REGULATORY AGREEMENT EXECUTED BY SUCH OWNER AND SUPERVISING  AGENCY,  BE
 RECORDED  IN  AN  EQUAL  AND  SUBORDINATE POSITION, OR SUBSEQUENTLY MADE
 EQUAL OR SUBORDINATE, TO A LIEN RECORDED BY ANY PRIVATE  LENDER  AGAINST
 SUCH MULTIPLE DWELLING.
   5.  The supervising agency may [charge] REQUIRE THE PAYMENT OF CHARGES
 BY the owner of such existing multiple  dwelling  [reasonable  fees]  IN
 CONSIDERATION  for  THE  financing, regulation, supervision and audit OF
 SUCH LOAN.  Such [fees] CHARGES shall be [kept by the municipality in  a
 S. 2985--A                         12

 separate  fund  to be known as the article VIII-A housing rehabilitation
 fund and shall be used to help meet the expenses of the municipality  in
 administering and carrying out the provisions of this article] PAID INTO
 THE TREASURY OF THE MUNICIPALITY REQUIRING THE CHARGES AND SHALL BE PAID
 AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH MUNICIPALITY.
   §  18.  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)]  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.]
   § 19. 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
   § 20. 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
 S. 2985--A                         13

 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 THERE EXISTS IN SUCH MUNICIPALITIES  A  SERI-
 OUSLY  INADEQUATE  SUPPLY OF DWELLING UNITS, PARTICULARLY FOR PERSONS OF
 LOW AND MODERATE INCOME, AND THAT THERE ARE MANY BASEMENTS  AND  CELLARS
 IN  ONE  TO  FOUR  UNIT  PRIVATE  AND  MULTIPLE  DWELLINGS THAT COULD BE
 CONVERTED INTO LAWFUL DWELLING UNITS.
   It further is found that the elimination of such conditions  by  reha-
 bilitation  or other improvements IN ONE TO FOUR UNIT PRIVATE AND MULTI-
 PLE DWELLINGS, AND THE CONVERSION OF BASEMENTS AND CELLARS  IN  EXISTING
 ONE  TO  FOUR  UNIT  PRIVATE AND MULTIPLE DWELLINGS INTO LAWFUL DWELLING
 UNITS, 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 dwellings.
   The rehabilitation, PRESERVATION or other  [improvements]  IMPROVEMENT
 of  such  PRIVATE  AND MULTIPLE dwellings [owned and occupied by low and
 moderate income persons or families,] AND THE  CONVERSION  OF  BASEMENTS
 AND  CELLARS IN SUCH PRIVATE AND MULTIPLE DWELLINGS INTO LAWFUL DWELLING
 UNITS is hereby declared a public purpose and a  municipal  purpose  for
 which public monies may be loaned OR GRANTED.
   In  order,  further, to promote the preservation and rehabilitation of
 such dwellings AND THE CONVERSION  OF  BASEMENTS  AND  CELLARS  IN  SUCH
 DWELLINGS  INTO  LAWFUL DWELLING UNITS, it is hereby declared that addi-
 tional 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.
   § 21. Section 471 of the private housing finance law,  as  amended  by
 chapter 200 of the laws of 1997, is amended to read as follows:
   § 471. Definitions. 1. "Agency" shall mean any agency or instrumental-
 ity  of  a municipality that is created by legislation and designated by
 the chief executive to act on behalf of the municipality with regard  to
 the provisions of this article.
   1-A. "BASEMENT" SHALL HAVE THE SAME MEANING AS PROVIDED IN SUBDIVISION
 THIRTY-EIGHT OF SECTION FOUR OF THE MULTIPLE DWELLING LAW.
   2.  "Banking  organization" shall mean any corporation, association or
 organization organized under the banking laws of New York state  or  the
 United States which is authorized to transact business in this state.
   2-A.  "CELLAR"  SHALL HAVE THE SAME MEANING AS PROVIDED IN SUBDIVISION
 THIRTY-SEVEN OF SECTION FOUR OF THE MULTIPLE DWELLING LAW.
   3. "Existing multiple dwelling" shall mean any dwelling classified  as
 a  multiple dwelling pursuant to the multiple dwelling law or the multi-
 ple residence law and in existence on the date upon which an application
 for a loan pursuant to this article is received by the agency.
   4. "Existing private dwelling" shall mean any dwelling classified as a
 private dwelling pursuant to the multiple dwelling law or  the  multiple
 residence law and in existence on the date upon which an application for
 a loan pursuant to this article is received by the agency.
   5.  "Federal  grant  funds"  shall  mean  any grants received from the
 federal government for community development activities or for the reha-
 bilitation or conservation of private or multiple dwellings.
 S. 2985--A                         14
 
   6. "Low and moderate income persons" shall mean persons  and  families
 who  cannot  afford  to improve their homes by relying upon the ordinary
 unaided operation of private enterprise.
   7. "Municipality" shall mean any city, town or village.
   8.  "Owner"  shall  mean  an individual or individuals, a partnership,
 [or] A CORPORATION OR OTHER ENTITY, INCLUDING  BUT  NOT  LIMITED  TO,  A
 TRUST,  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.
   9.  ["Owner-occupant" shall mean an owner who occupies at least one of
 the units in a one to four unit dwelling as his or her  principal  resi-
 dence. In the case of a partnership, joint tenancy, tenancy in common or
 tenancy    by  the  entirety,  at least one partner or tenant must be an
 owner-occupant. In the case of a cooperative or condominium  a  majority
 of  the  units  must  be owner-occupied. The term "owner-occupant" shall
 include an owner of a vacant one to four unit dwelling who  demonstrates
 an  intention  to move into one of the units after the rehabilitation of
 the property] RESERVED.
   10. "Private investor" shall mean one or more  banking  organizations,
 foundations,  public  benefit corporations, labor unions, credit unions,
 employers' associations, veterans'  organizations,  colleges,  universi-
 ties,  educational  institutions,  child  care  institutions, hospitals,
 medical research institutes, insurance companies, trustees or  fiduciar-
 ies, trustees of pension and retirement funds and systems, corporations,
 partnerships,  individuals  or  other entities or any combination of the
 foregoing, and shall include the United States of America and any of its
 agencies and departments.
   11. "Rehabilitation" shall  mean  the  installation,  replacement,  or
 repair of heating, plumbing, electrical and related systems or the elim-
 ination  of conditions dangerous to human life or detrimental to health,
 including nuisances as defined in local housing or health  codes  or  as
 defined  in  section three hundred nine of the multiple dwelling law, or
 in section three hundred five of the multiple residence  law,  or  other
 rehabilitation or general property and energy conservation improvements.
   12.  "State grant funds" shall mean any grants received from the state
 or any public benefit corporation for community  development  activities
 or  for the rehabilitation or conservation of private or multiple dwell-
 ings.
   § 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
 S. 2985--A                         15

 thousand  dollars  per dwelling unit. Such] THAT ANY SUCH REHABILITATION
 OR IMPROVEMENT MAY  INCLUDE  CLIMATE  RESILIENCY  IMPROVEMENTS  AND  THE
 CONVERSION  OF  BASEMENTS  AND  CELLARS TO LAWFUL DWELLING UNITS.   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 ARTICLE, 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] FORTY YEARS, PROVIDED THAT SUCH  PERIOD  MAY  BE
 EXTENDED  AS  THE AGENCY MAY DETERMINE NECESSARY TO ENSURE THE CONTINUED
 AFFORDABILITY OR ECONOMIC VIABILITY  OF  THE  EXISTING  DWELLING.    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-occupant]  OWNER, with the consent of the agency, to prepay
 the principal of the loan subject to such terms and conditions as there-
 in provided. In order to make any such loan affordable to the [owner-oc-
 cupant] 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, INCLUDING, BUT NOT LIMITED  TO,
 PROVIDING THAT THE LIEN CREATED BY THE NOTE AND MORTGAGE, AND, IF APPLI-
 CABLE,  ANY  REGULATORY  AGREEMENT EXECUTED BY SUCH OWNER AND AGENCY, OR
 RESTRICTIVE COVENANT APPROVED BY SUCH AGENCY,  MAY  BE  RECORDED  IN  AN
 EQUAL  OR  SUBORDINATE  POSITION, OR SUBSEQUENTLY MADE EQUAL OR SUBORDI-
 NATE, TO A LIEN RECORDED BY ANY PRIVATE  LENDER  AGAINST  SUCH  EXISTING
 DWELLING.
   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
 S. 2985--A                         16
 
 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] REQUIRE  the  [owner-occupant]  PAYMENT  OF
 CHARGES  BY  THE  OWNER  of  such  existing private or multiple dwelling
 [reasonable fees] IN CONSIDERATION for [administration,] THE  financing,
 regulation,  supervision and audit  OF SUCH LOAN.  SUCH CHARGES SHALL BE
 PAID INTO THE TREASURY OF THE MUNICIPALITY  REQUIRING  THE  CHARGES  AND
 SHALL  BE  PAID  AND  DEPOSITED  IN THE GENERAL FUND OF ANY SUCH MUNICI-
 PALITY.
   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
 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]
 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.
   § 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
 S. 2985--A                         17
 
 of  such  private or multiple dwelling shall covenant in writing that so
 long as any part of such loan shall remain  unpaid  OR  ANY  REQUIREMENT
 IMPOSED  AS A CONDITION FOR MAKING SUCH LOAN THAT SURVIVES THE REPAYMENT
 OF  SUCH  LOAN, INCLUDING, BUT NOT LIMITED TO, IN A REGULATORY AGREEMENT
 EXECUTED BY SUCH OWNER AND THE AGENCY OR A RESTRICTIVE COVENANT APPROVED
 BY SUCH AGENCY, REMAINS IN EFFECT: (i)  the  [owner-occupant]  OWNER  or
 managing  agent  or  operator  of  such  dwelling  shall permit the duly
 authorized officers, employees, agents or inspectors 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  represen-
 tatives as aforesaid shall have full power to investigate into and order
 the  [owner-occupant] OWNER of such dwelling to furnish such reports and
 information as it may require concerning such rehabilitation or improve-
 ment and shall have full power to audit the books  of  said  owner  with
 respect  to  such matters; and (iii) if the property 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 (I)  the  area  in
 which  such  dwelling is situated is a blighted, deteriorated or deteri-
 orating 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; (II) THE LOAN
 WILL BE USED TO FINANCE THE CONVERSION OF A BASEMENT OR CELLAR  IN  SUCH
 PRIVATE  OR  MULTIPLE  DWELLING TO ONE OR MORE LAWFUL DWELLING UNITS AND
 ANY ADDITIONAL REHABILITATION OR IMPROVEMENT OF SUCH DWELLING; OR  (III)
 THE  OWNER OF SUCH PRIVATE OR MULTIPLE DWELLING IS A PERSON OR FAMILY OF
 LOW INCOME.
   § 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,
 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.
 S. 2985--A                         18
 
   §  26.  Subdivision  1 of section 576-c of the private housing finance
 law, as amended by section 1 of chapter 254 of  the  laws  of  1998,  is
 amended to read as follows:
   1.  In  addition  to  the powers granted to municipalities pursuant to
 this article, a municipality, acting by its supervising agency, may make
 loans for the purposes of acquisition, rehabilitation or construction of
 dwelling accommodations to a non-profit housing development fund  compa-
 ny,  a  wholly-owned  subsidiary  of  such  company,  a  partnership the
 controlling interest of which is held by  such  company  and  which  has
 agreed  to  limit  profits  or rate of return of investors in accordance
 with a formula established or approved by  the  company,  or  a  private
 developer  which has agreed to limit profits or rate of return of inves-
 tors in accordance with a formula established or approved by the  compa-
 ny,  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 a municipality and have prior to their initial occu-
 pancy in such accommodations resided  in  emergency  shelter  facilities
 operated  by  or  on  behalf of the municipality or who are otherwise in
 need of emergency shelter as determined by the municipality,  providing,
 however,  that  in  the  case  of a building acquired by such a company,
 subsidiary, partnership, or developer the obligation to provide  housing
 accommodations  for  such  persons  shall be applicable only to dwelling
 accommodations which are or become vacant after the date of acquisition.
 Such loans may be made for such period of  time  and  pursuant  to  such
 terms  and conditions as may be required by the municipality, INCLUDING,
 BUT NOT LIMITED TO, TERMS AND CONDITIONS PROVIDING THAT THE LIEN CREATED
 BY THE NOTE AND MORTGAGE, AND, IF APPLICABLE, ANY  REGULATORY  AGREEMENT
 EXECUTED  BY  THE  OWNER  AND  SUCH MUNICIPALITY OR RESTRICTIVE COVENANT
 APPROVED BY A SUPERVISING AGENCY, MAY BE RECORDED IN AN EQUAL OR  SUBOR-
 DINATE  POSITION,  OR  SUBSEQUENTLY MADE EQUAL OR SUBORDINATE, TO A LIEN
 RECORDED BY ANY PRIVATE LENDER AGAINST THE DWELLING AIDED  BY  THE  LOAN
 MADE  PURSUANT TO THIS ARTICLE, and the supervising agency of such muni-
 cipality may provide that the amount of  the  note  and  mortgage  shall
 automatically  be reduced to zero in five equal decrements commencing on
 the tenth year after the initial occupancy date, provided  that,  as  of
 the  date  of such reduction, such accommodations have been and continue
 to be 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.  Notwithstanding such provision as  contained  in  the
 note  and  mortgage, the loan shall be reduced to zero only if, prior to
 or simultaneously with delivery of such note and mortgage, the supervis-
 ing agency made a written determination that  such  reduction  would  be
 necessary to ensure the continued affordability or economic viability of
 such  housing  project.  Such  written  determination shall document the
 basis upon which the loan was determined to be eligible for evaporation.
   § 27. Section 576-c of the private housing finance law, as amended  by
 section  2  of  chapter  254  of the laws of 1998, is amended to read as
 follows:
   § 576-c. Loans to housing development companies by a municipality.  In
 addition  to the powers granted to municipalities pursuant to this arti-
 cle, a municipality, acting by its supervising agency,  may  make  loans
 for  the  purposes  of  acquisition,  rehabilitation  or construction of
 dwelling accommodations to a non-profit housing development fund  compa-
 ny,  a  wholly-owned  subsidiary  of  such  company,  a  partnership the
 controlling interest of which is held by  such  company  and  which  has
 agreed  to  limit  profits  or rate of return of investors in accordance
 S. 2985--A                         19
 
 with a formula established or approved by  the  company,  or  a  private
 developer  which has agreed to limit profits or rate of return of inves-
 tors in accordance with a formula established or approved by the  compa-
 ny,  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 a municipality and have prior to their initial occu-
 pancy in such accommodations resided  in  emergency  shelter  facilities
 operated  by  or  on  behalf of the municipality or who are otherwise in
 need of emergency shelter as determined by the municipality,  providing,
 however,  that  in  the  case  of a building acquired by such a company,
 subsidiary, partnership, or developer the obligation to provide  housing
 accommodations  for  such  persons  shall be applicable only to dwelling
 accommodations which are or become vacant after the date of acquisition.
 Such loans may be made for such period of  time  and  pursuant  to  such
 terms  and conditions as may be required by the municipality, INCLUDING,
 BUT NOT LIMITED TO, TERMS AND CONDITIONS PROVIDING THAT THE LIEN CREATED
 BY THE NOTE AND MORTGAGE, AND, AS APPLICABLE, ANY  REGULATORY  AGREEMENT
 EXECUTED BY THE OWNER AND SUCH MUNICIPALITY, MAY BE RECORDED IN AN EQUAL
 OR  SUBORDINATE  POSITION, OR SUBSEQUENTLY MADE EQUAL OR SUBORDINATE, TO
 THE LIEN RECORDED BY ANY PRIVATE LENDER AGAINST THE  DWELLING  AIDED  BY
 THE  LOAN  MADE  PURSUANT TO THIS ARTICLE, and the supervising agency of
 such municipality may provide that the amount of the note  and  mortgage
 shall automatically be reduced to zero in five equal decrements commenc-
 ing  on  the tenth year after the initial occupancy date, provided that,
 as of the date of such reduction,  such  accommodations  have  been  and
 [continues]  CONTINUE  to  be  owned and operated in a manner consistent
 with an agreement with the municipality contained in such note and mort-
 gage  to  provide  housing  for  such  persons.    Notwithstanding  such
 provision  as  contained  in  the  note  and mortgage, the loan shall be
 reduced to zero only if, prior to or  simultaneously  with  delivery  of
 such  note  and mortgage, the supervising agency made a written determi-
 nation that such reduction would be necessary to  ensure  the  continued
 affordability  or economic viability of such housing project. Such writ-
 ten determination shall document the  basis  upon  which  the  loan  was
 determined to be eligible for evaporation.
   §  28.  The  private housing finance law is amended by adding four new
 sections 611, 612, 613 and 614 to read as follows:
   § 611. 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
 S. 2985--A                         20
 
 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.
   § 612. COMPLIANCE MONITORING. 1. ANY SUPERVISING AGENCY AND ANY CORPO-
 RATE GOVERNMENTAL AGENCY THAT CONSTITUTES A 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 AGREEMENT, REGULATORY AGREEMENT,
 DEED, LAND  DISPOSITION  AGREEMENT,  OR  RESTRICTIVE  COVENANT  WITH  OR
 APPROVED  BY  SUCH  AGENCY OR CORPORATION AND ENTERED INTO IN CONNECTION
 WITH AN ACTION TAKEN PURSUANT TO THIS  CHAPTER,  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.
   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.
   § 613. CHARGES. A MUNICIPALITY, OR A  SUPERVISING  AGENCY  THEREUNDER,
 MAY  REQUIRE  THE  PAYMENT  OF  CHARGES BY AN OWNER IN CONSIDERATION FOR
 FINANCING, REGULATION, SUPERVISION AND AUDIT OF LOANS  AND  GRANTS  MADE
 PURSUANT  TO  THE PROVISIONS OF THIS CHAPTER. SUCH CHARGES SHALL BE PAID
 INTO THE TREASURY OF THE MUNICIPALITY REQUIRING THE CHARGES AND SHALL BE
 PAID AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH MUNICIPALITY.
   § 614. SERVICING LOANS. AN AGENCY MAY MAKE PROVISION  IN  A  NOTE  AND
 LOAN  AGREEMENT  OR BY SEPARATE AGREEMENT FOR THE PERFORMANCE OF LOAN OR
 GRANT SERVICING FUNCTIONS, INCLUDING,  BUT  NOT  LIMITED  TO,  FUNCTIONS
 RELATED  TO LENDING OR PROVIDING A GRANT FOR CONSTRUCTION, AS MAY GENER-
 ALLY 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 MAY PAY A
 REASONABLE AND CUSTOMARY FEE TO  SUCH  FINANCIAL  INSTITUTION  OR  OTHER
 QUALIFIED  ENTITY APPOINTED BY SUCH AGENCY, OR TO WHOSE APPOINTMENT SUCH
 S. 2985--A                         21
 
 AGENCY PROVIDED CONSENT, FOR THE  PERFORMANCE  OF  SUCH  LOAN  OR  GRANT
 SERVICING FUNCTIONS.
   §  29.  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-
 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.
   § 30. 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.
   § 31. Section 801 of the private housing finance  law  is  amended  by
 adding a new subdivision 5-a to read as follows:
 S. 2985--A                         22
 
   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.
   § 32. 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.
   §  33.  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] DWELLINGS on
 such vacant 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-residen-
 tial property or the vacant land for the purpose of such rehabilitation,
 conversion or construction or owns the existing multiple dwelling or the
 non-residential  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, INCIDENTAL OR APPURTENANT TO SUCH REHABILI-
 TATION, CONVERSION OR CONSTRUCTION, 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
 S. 2985--A                         23

 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  jointly  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 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 the vacant  land  and  the
 multiple  dwelling  to  be  constructed,  OR,  IN THE CASE OF A MULTIPLE
 DWELLING HELD IN THE CONDOMINIUM FORM OF OWNERSHIP, A NOTE AND  MORTGAGE
 UPON  THE  CONDOMINIUM UNITS REHABILITATED WITH SUCH PARTICIPATION LOAN,
 PROVIDED THAT A PARTICIPATION LOAN TO AN OWNER WHO IS A LESSEE SHALL  BE
 SECURED BY A LEASEHOLD INTEREST IN SUCH PROPERTY, AND provided, FURTHER,
 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  amorti-
 zation 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 continues to be owned  and  operated
 in  a  manner  consistent  with  a regulatory agreement with the munici-
 pality. 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 with delivery of such bond or
 note and mortgage, the agency made a  written  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 eligi-
 ble 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
 S. 2985--A                         24

 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] FORTY years,
 PROVIDED THAT SUCH PERIOD MAY BE EXTENDED AS THE  AGENCY  MAY  DETERMINE
 NECESSARY TO ENSURE THE CONTINUED AFFORDABILITY OR ECONOMIC VIABILITY OF
 THE MULTIPLE DWELLING, 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.
   §  34.  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.
   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.
 S. 2985--A                         25
 
   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.
   §  35.  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 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, INCLUDING,
 BUT NOT LIMITED TO, TERMS PROVIDING THAT THE LIEN CREATED BY  SUCH  NOTE
 AND  MORTGAGE,  AND, IF APPLICABLE, ANY REGULATORY AGREEMENT EXECUTED BY
 THE SPONSOR AND SUCH AGENCY OR RESTRICTIVE  COVENANT  APPROVED  BY  SUCH
 AGENCY,  MAY  BE RECORDED IN AN EQUAL OR SUBORDINATE POSITION, OR SUBSE-
 QUENTLY MADE EQUAL OR SUBORDINATE, TO THE LIEN CREATED  BY  ANY  PRIVATE
 LENDER AGAINST SUCH ELIGIBLE PROJECT.
   (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
 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
 S. 2985--A                         26

 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  MORTGAGOR  WITH A REGULATORY AGREEMENT OR RESTRICTIVE COVENANT WITH
 OR APPROVED BY THE AGENCY AND UPON THE SATISFACTION  OF  ANY  ADDITIONAL
 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 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 FORTY YEARS, PROVIDED THAT SUCH PERIOD MAY BE EXTENDED AS
 THE AGENCY MAY DETERMINE IS NECESSARY TO ENSURE THE  CONTINUED  AFFORDA-
 BILITY  OR  ECONOMIC  VIABILITY OF THE ELIGIBLE PROJECT, 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-
 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
 S. 2985--A                         27

 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, INCIDENTAL OR APPURTENANT TO THE
 CONSTRUCTION OF SUCH ELIGIBLE PROJECTS.
   [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
 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
 S. 2985--A                         28
 
 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.
   § 36. Paragraph (g) of subdivision 6 of section 1802 of the charter of
 the  city  of  New York, as amended by vote of the people of the city of
 S. 2985--A                         29
 
 New York at the general election held in November of 1989, is amended to
 read as follows:
   (g)  [impose and collect] REQUIRE THE PAYMENT OF charges [and fees] IN
 CONSIDERATION for the financing, regulation, supervision  and  audit  of
 municipally-aided projects and loan programs administered by the commis-
 sioner,  which  charges  [and  fees]  shall  be  [set aside in a special
 account for administrative expenses of the  department]  PAID  INTO  THE
 TREASURY OF THE CITY AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND
 OF THE CITY;
   §  37. This act shall take effect immediately, provided that:  (i) the
 amendments to subdivision 1 of section 696-a of  the  general  municipal
 law  made  by section two of this act shall be subject to the expiration
 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 three of this act shall take effect; and (ii) the amendments  to
 subdivision  1  of section 576-c of the private housing finance law made
 by section twenty-six of this act shall be subject to the expiration and
 reversion of such subdivision pursuant to section 2 of chapter 84 of the
 laws of 1993, as amended, when upon such date the provisions of  section
 twenty-seven of this act shall take effect.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2985--C
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 26, 2023
                                ___________
 
 Introduced by Sens. KAVANAGH, CLEARE, FERNANDEZ, SEPULVEDA -- read twice
   and ordered printed, and when printed to be committed to the Committee
   on  Housing,  Construction  and  Community  Development  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee  --  committee  discharged,  bill  amended,  ordered
   reprinted  as  amended  and  recommitted to said committee -- reported
   favorably from said  committee  and  committed  to  the  Committee  on
   Finance  --  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,  the
   private  housing  finance  law,  and  the  New  York  city charter, in
   relation to enacting the "housing affordability, resiliency, and ener-
   gy efficiency investment act of 2023"
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Short  title. This act shall be known and may be cited as
 the "housing affordability, resiliency, and energy efficiency investment
 act of 2023".
   § 2. 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 OR CONSTRUCTION OF A  NEW  PRIVATE
 OR  MULTIPLE  DWELLING,  (ii) providing site improvements, INCIDENTAL OR
 APPURTENANT TO SUCH REHABILITATION  OR  SUCH  CONSTRUCTION,  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, RECRE-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07187-05-3
              

 S. 2985--C                          2
 
 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, 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 improved, OTHER THAN ANY SUCH  PROP-
 ERTY  TITLE  TO  WHICH  IS HELD BY THE MUNICIPALITY or, in the case of a
 condominium, a note and mortgage upon  each  of  the  [housing  accommo-
 dations] CONDOMINIUM UNITS aided by such loan, or in the case of a coop-
 erative  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 improved, OTHER THAN ANY SUCH PROPERTY TITLE
 TO WHICH IS HELD BY THE MUNICIPALITY, or upon both such economic  inter-
 est  or  property;  provided, however, that all or part of any such loan
 may be unsecured if necessary to satisfy the requirements of any partic-
 ipating lender, AND, PROVIDED FURTHER, THAT THE LIEN CREATED BY THE NOTE
 AND MORTGAGE MAY BE RECORDED IN AN EQUAL  OR  SUBORDINATE  POSITION,  OR
 SUBSEQUENTLY  MADE  EQUAL  OR  SUBORDINATE,  TO  A  LIEN RECORDED BY ANY
 PARTICIPATING LENDER AGAINST SUCH PROPERTY. Such loan  shall  be  repaid
 over such period as the agency shall determine.
   g.  For  purposes  of  this [section] ARTICLE, (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 obli-
 gation and which imposes a lien on or affects title to  such  shares  or
 such proprietary lease; AND (II) THE TERM "OWNER" SHALL MEAN AN INDIVID-
 UAL,  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 PROPERTY OR THE  LESSEE
 THEREOF UNDER A LEASE HAVING A TERM OF AT LEAST FORTY-NINE YEARS.
   § 3. 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 OR CONSTRUCTION OF A
 NEW PRIVATE OR MULTIPLE DWELLING, (ii) [for the  purpose  of]  providing
 site  improvements,  INCIDENTAL OR APPURTENANT TO SUCH REHABILITATION OR
 SUCH CONSTRUCTION, 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) [for the purpose of] providing for other costs
 of construction for the development 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 corporation, such grant shall require a regulato-
 ry  agreement with the agency limiting profits. Any loan made in accord-
 S. 2985--C                          3
 
 ance with this section shall be secured by a note and mortgage upon  the
 property  improved,  OTHER THAN ANY SUCH PROPERTY TITLE TO WHICH IS HELD
 BY THE MUNICIPALITY, or, in the case of a condominium, a note and  mort-
 gage  upon  each of the [housing accommodations] CONDOMINIUM UNITS 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 improved,
 OTHER THAN ANY SUCH PROPERTY TITLE TO WHICH IS HELD BY THE MUNICIPALITY,
 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 ownership 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 accommo-
 dations  or  a condominium or cooperative housing corporation, such note
 and mortgage may provide that the loan shall automatically be reduced to
 zero over a period of  owner-occupancy  of  the  housing  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 housing 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 principal of the  loan  subject
 to such terms and conditions as therein provided. Such note and mortgage
 may  contain  such  other terms and conditions 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] ARTICLE, (1) the  term  "mortgage"  shall
 include  any  pledge or assignment of shares or assignment of a proprie-
 tary 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  (2) THE TERM "OWNER" SHALL MEAN AN INDIVIDUAL,
 PARTNERSHIP, CORPORATION OR OTHER ENTITY, INCLUDING A NON-PROFIT  COMPA-
 NY,  A  MUTUAL  COMPANY,  OR  A HOUSING DEVELOPMENT FUND COMPANY, HAVING
 RECORD OR BENEFICIAL TITLE IN FEE SIMPLE TO REAL PROPERTY OR THE  LESSEE
 THEREOF UNDER A LEASE HAVING A TERM OF AT LEAST FORTY-NINE YEARS.
   §  4.  The general municipal law is amended by adding two new sections
 696-e and 696-f to read as follows:
   § 696-E. CHARGES. A MUNICIPALITY, OR AN AGENCY, MAKING A LOAN OR GRANT
 PURSUANT TO THIS ARTICLE, MAY REQUIRE THE PAYMENT OF CHARGES BY AN OWNER
 IN CONSIDERATION FOR THE FINANCING, REGULATION, SUPERVISION AND AUDIT OF
 SUCH LOAN, OR FOR REGULATION, SUPERVISION AND AUDIT OF SUCH GRANT.  SUCH
 CHARGES  SHALL  BE  PAID INTO THE TREASURY OF THE MUNICIPALITY REQUIRING
 S. 2985--C                          4
 
 THE CHARGES AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND  OF  ANY
 SUCH MUNICIPALITY.
   §  696-F.  SERVICING.  AN AGENCY MAY MAKE PROVISION IN A NOTE AND LOAN
 AGREEMENT OR BY SEPARATE AGREEMENT FOR THE PERFORMANCE OF LOAN OR  GRANT
 SERVICING FUNCTIONS, INCLUDING, BUT NOT LIMITED TO, FUNCTIONS RELATED TO
 LENDING  OR  PROVIDING  A  GRANT  FOR  CONSTRUCTION, AS MAY GENERALLY BE
 PERFORMED BY AN INSTITUTIONAL LENDER. SUCH AGENCY MAY ACT IN SUCH CAPAC-
 ITY 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 MAY PAY A REASONABLE  AND
 CUSTOMARY  FEE  TO  SUCH FINANCIAL INSTITUTION OR OTHER QUALIFIED ENTITY
 APPOINTED BY SUCH AGENCY, OR TO WHOSE APPOINTMENT SUCH  AGENCY  PROVIDED
 CONSENT, FOR THE PERFORMANCE OF SUCH LOAN OR GRANT SERVICING FUNCTIONS.
   §  5.  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
 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.
   § 6. Section 2 of the private housing finance law is amended by adding
 two new subdivisions 30 and 31 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.
   31.  "PRIVATE LENDER." ONE OR MORE BANKING ORGANIZATIONS, FOUNDATIONS,
 LABOR UNIONS, CREDIT UNIONS, EMPLOYERS' ASSOCIATIONS,  VETERANS'  ORGAN-
 IZATIONS,  COLLEGES,  UNIVERSITIES, EDUCATIONAL INSTITUTIONS, CHILD CARE
 INSTITUTIONS, HOSPITALS, MEDICAL RESEARCH INSTITUTES,  INSURANCE  COMPA-
 NIES, TRUSTEES OR FIDUCIARIES, TRUSTEES OF PENSIONS AND RETIREMENT FUNDS
 AND  SYSTEMS,  CORPORATIONS, PARTNERSHIPS, INDIVIDUALS OR OTHER ENTITIES
 OR ANY COMBINATION OF THE FOREGOING, AND SHALL INCLUDE ANY PUBLIC  BENE-
 FIT CORPORATION AND THE UNITED STATES OF AMERICA AND ANY OF ITS AGENCIES
 AND  DEPARTMENTS.  AS  USED IN THIS DEFINITION, THE TERMS "TRUSTEES" AND
 S. 2985--C                          5
 
 "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.
   § 7. 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.
   § 8. 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
 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
 S. 2985--C                          6

 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.
   § 9. 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.
   § 10. 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,
 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 ARTICLE, 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.
   § 11. Subdivisions 2-a, 2-b, 2-c and 4 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,
 S. 2985--C                          7
 
 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 and the land upon which
 it is situated, PROVIDED THAT WHERE THE MULTIPLE DWELLING IS HELD IN THE
 CONDOMINIUM FORM OF OWNERSHIP, SUCH LOAN SHALL BE SECURED BY A BOND  AND
 MORTGAGE  OR  NOTE AND MORTGAGE UPON THE CONDOMINIUM UNITS REHABILITATED
 OR IMPROVED WITH SUCH LOAN; where the loan is made to an owner who is  a
 lessee,  such loan shall be secured by [a first lien on such property] A
 LEASEHOLD INTEREST IN 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-
 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,
 S. 2985--C                          8

 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] FORTY years, PROVIDED THAT SUCH
 PERIOD MAY BE EXTENDED AS THE AGENCY MAY DETERMINE NECESSARY  TO  ENSURE
 THE CONTINUED AFFORDABILITY OR ECONOMIC VIABILITY OF THE MULTIPLE DWELL-
 ING, 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], INCLUDING, BUT NOT LIMITED TO, PROVIDING THAT THE LIEN CREATED BY
 SUCH  BOND  AND  MORTGAGE  OR NOTE AND MORTGAGE, AND, IF APPLICABLE, ANY
 REGULATORY AGREEMENT EXECUTED BY THE OWNER AND THE AGENCY OR RESTRICTIVE
 COVENANT APPROVED BY SUCH AGENCY, MAY BE RECORDED IN AN EQUAL OR  SUBOR-
 DINATE  POSITION,  OR  SUBSEQUENTLY MADE EQUAL OR SUBORDINATE, TO A LIEN
 RECORDED BY ANY PRIVATE LENDER AGAINST SUCH MULTIPLE DWELLING.
   [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.
   4.  The  agency  may [charge the] REQUIRE THE PAYMENT OF CHARGES BY AN
 owner of such multiple dwelling [reasonable fees] IN  CONSIDERATION  for
 THE financing, regulation, supervision and audit OF SUCH LOAN. Such fees
 shall be [kept by the municipality in a separate fund to be known as the
 housing rehabilitation fund and shall be used to pay for the expenses of
 the  municipality  in  administering  and carrying out the provisions of
 this article] PAID INTO THE TREASURY OF THE MUNICIPALITY  REQUIRING  THE
 CHARGES  AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH
 MUNICIPALITY.
   § 12. 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:
 S. 2985--C                          9
 
   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.
 S. 2985--C                         10
 
   [5. Any person or family whose removal is required by any provision of
 this article shall be subject to removal by summary proceedings.]
   §  13.  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:
   § 14. 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.
   § 15. 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.
   § 16. 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:
 S. 2985--C                         11
 
   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 ARTICLE, 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.
   § 17. Subdivisions 2 and 5 of  section  452  of  the  private  housing
 finance law, subdivision 2 as amended by chapter 408 of the laws of 2009
 and  subdivision  5  as  amended by chapter 273 of the laws of 1975, are
 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 FORTY YEARS, PROVIDED THAT SUCH PERIOD MAY BE EXTENDED AS THE  SUPER-
 VISING  AGENCY  MAY DETERMINE NECESSARY TO ENSURE THE CONTINUED AFFORDA-
 BILITY OR ECONOMIC VIABILITY OF THE EXISTING  MULTIPLE  DWELLING.    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 AND PROVISIONS PERMIT-
 TING  THE  LIEN CREATED BY SUCH NOTE AND MORTGAGE, AND, IF APPLICABLE, A
 REGULATORY AGREEMENT EXECUTED BY SUCH OWNER AND SUPERVISING  AGENCY,  BE
 RECORDED  IN  AN  EQUAL  AND  SUBORDINATE POSITION, OR SUBSEQUENTLY MADE
 EQUAL OR SUBORDINATE, TO A LIEN RECORDED BY ANY PRIVATE  LENDER  AGAINST
 SUCH MULTIPLE DWELLING.
   5.  The supervising agency may [charge] REQUIRE THE PAYMENT OF CHARGES
 BY the owner of such existing multiple  dwelling  [reasonable  fees]  IN
 S. 2985--C                         12
 
 CONSIDERATION  for  THE  financing, regulation, supervision and audit OF
 SUCH LOAN.  Such [fees] CHARGES shall be [kept by the municipality in  a
 separate  fund  to be known as the article VIII-A housing rehabilitation
 fund  and shall be used to help meet the expenses of the municipality in
 administering and carrying out the provisions of this article] PAID INTO
 THE TREASURY OF THE MUNICIPALITY REQUIRING THE CHARGES AND SHALL BE PAID
 AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH MUNICIPALITY.
   § 18. 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)] 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.]
   §  19.  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
   §  20.  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.
 S. 2985--C                         13
 
   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 IN ONE TO FOUR UNIT PRIVATE AND MULTI-
 PLE DWELLINGS cannot be readily provided without public aid in the  form
 of  low interest loans OR GRANTS to [low and moderate income owner-occu-
 pants] OWNERS of such one to four unit dwellings.
   The rehabilitation, PRESERVATION or other  [improvements]  IMPROVEMENT
 of  such  PRIVATE  AND MULTIPLE dwellings [owned and occupied by low and
 moderate income persons  or  families,]  is  hereby  declared  a  public
 purpose and a municipal purpose for which public monies may be loaned OR
 GRANTED.
   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.
   §  21.  Subdivisions  8  and  9  of section 471 of the private housing
 finance law, as amended by chapter 200 of the laws of 1997, are  amended
 to read as follows:
   8.  "Owner"  shall  mean  an individual or individuals, a partnership,
 [or] A CORPORATION OR OTHER ENTITY, INCLUDING  BUT  NOT  LIMITED  TO,  A
 TRUST,  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.
   9.  ["Owner-occupant" shall mean an owner who occupies at least one of
 the units in a one to four unit dwelling as his or her  principal  resi-
 dence. In the case of a partnership, joint tenancy, tenancy in common or
 tenancy    by  the  entirety,  at least one partner or tenant must be an
 owner-occupant. In the case of a cooperative or condominium  a  majority
 of  the  units  must  be owner-occupied. The term "owner-occupant" shall
 include an owner of a vacant one to four unit dwelling who  demonstrates
 an  intention  to move into one of the units after the rehabilitation of
 the property] RESERVED.
   § 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
 S. 2985--C                         14
 
 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 ARTICLE, 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]  FORTY YEARS, PROVIDED THAT SUCH PERIOD MAY BE
 EXTENDED AS THE AGENCY MAY DETERMINE NECESSARY TO ENSURE  THE  CONTINUED
 AFFORDABILITY  OR  ECONOMIC  VIABILITY  OF  THE EXISTING DWELLING.   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-occupant] OWNER, with the consent of the agency,  to  prepay
 the principal of the loan subject to such terms and conditions as there-
 in provided. In order to make any such loan affordable to the [owner-oc-
 cupant] 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, INCLUDING, BUT NOT LIMITED TO,
 PROVIDING THAT THE LIEN CREATED BY THE NOTE AND MORTGAGE, AND, IF APPLI-
 CABLE, ANY REGULATORY AGREEMENT EXECUTED BY SUCH OWNER  AND  AGENCY,  OR
 RESTRICTIVE  COVENANT  APPROVED  BY  SUCH  AGENCY, MAY BE RECORDED IN AN
 EQUAL OR SUBORDINATE POSITION, OR SUBSEQUENTLY MADE  EQUAL  OR  SUBORDI-
 NATE,  TO  A  LIEN  RECORDED BY ANY PRIVATE LENDER AGAINST SUCH EXISTING
 DWELLING.
   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
 S. 2985--C                         15
 
 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] REQUIRE  the  [owner-occupant]  PAYMENT  OF
 CHARGES  BY  THE  OWNER  of  such  existing private or multiple dwelling
 [reasonable fees] IN CONSIDERATION for [administration,] THE  financing,
 regulation,  supervision and audit  OF SUCH LOAN.  SUCH CHARGES SHALL BE
 PAID INTO THE TREASURY OF THE MUNICIPALITY  REQUIRING  THE  CHARGES  AND
 SHALL  BE  PAID  AND  DEPOSITED  IN THE GENERAL FUND OF ANY SUCH MUNICI-
 PALITY.
   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
 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]
 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.
   § 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:
 S. 2985--C                         16
 
   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  ANY  REQUIREMENT
 IMPOSED  AS A CONDITION FOR MAKING SUCH LOAN THAT SURVIVES THE REPAYMENT
 OF SUCH LOAN, INCLUDING, BUT NOT LIMITED TO, IN A  REGULATORY  AGREEMENT
 EXECUTED BY SUCH OWNER AND THE AGENCY OR A RESTRICTIVE COVENANT APPROVED
 BY  SUCH  AGENCY,  REMAINS  IN EFFECT: (i) the [owner-occupant] OWNER or
 managing agent or operator  of  such  dwelling  shall  permit  the  duly
 authorized  officers,  employees,  agents or inspectors 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 represen-
 tatives as aforesaid shall have full power to investigate into and order
 the [owner-occupant] OWNER of such dwelling to furnish such reports  and
 information as it may require concerning such rehabilitation or improve-
 ment  and  shall  have  full power to audit the books of said owner with
 respect to such matters; and (iii) if the property 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 (I) the area in
 which such dwelling is situated is a blighted, deteriorated  or  deteri-
 orating 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;  OR  (II)  THE
 OWNER  OF SUCH PRIVATE OR MULTIPLE DWELLING IS A PERSON OR FAMILY OF LOW
 INCOME.
   § 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,
 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.  Subdivision  1 of section 576-c of the private housing finance
 law, as amended by section 1 of chapter 254 of  the  laws  of  1998,  is
 amended to read as follows:
 S. 2985--C                         17
 
   1.  In  addition  to  the powers granted to municipalities pursuant to
 this article, a municipality, acting by its supervising agency, may make
 loans for the purposes of acquisition, rehabilitation or construction of
 dwelling accommodations to a non-profit housing development fund  compa-
 ny,  a  wholly-owned  subsidiary  of  such  company,  a  partnership the
 controlling interest of which is held by  such  company  and  which  has
 agreed  to  limit  profits  or rate of return of investors in accordance
 with a formula established or approved by  the  company,  or  a  private
 developer  which has agreed to limit profits or rate of return of inves-
 tors in accordance with a formula established or approved by the  compa-
 ny,  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 a municipality and have prior to their initial occu-
 pancy in such accommodations resided  in  emergency  shelter  facilities
 operated  by  or  on  behalf of the municipality or who are otherwise in
 need of emergency shelter as determined by the municipality,  providing,
 however,  that  in  the  case  of a building acquired by such a company,
 subsidiary, partnership, or developer the obligation to provide  housing
 accommodations  for  such  persons  shall be applicable only to dwelling
 accommodations which are or become vacant after the date of acquisition.
 Such loans may be made for such period of  time  and  pursuant  to  such
 terms  and conditions as may be required by the municipality, INCLUDING,
 BUT NOT LIMITED TO, TERMS AND CONDITIONS PROVIDING THAT THE LIEN CREATED
 BY THE NOTE AND MORTGAGE, AND, IF APPLICABLE, ANY  REGULATORY  AGREEMENT
 EXECUTED  BY  THE  OWNER  AND  SUCH MUNICIPALITY OR RESTRICTIVE COVENANT
 APPROVED BY A SUPERVISING AGENCY, MAY BE RECORDED IN AN EQUAL OR  SUBOR-
 DINATE  POSITION,  OR  SUBSEQUENTLY MADE EQUAL OR SUBORDINATE, TO A LIEN
 RECORDED BY ANY PRIVATE LENDER AGAINST THE DWELLING AIDED  BY  THE  LOAN
 MADE  PURSUANT TO THIS ARTICLE, and the supervising agency of such muni-
 cipality may provide that the amount of  the  note  and  mortgage  shall
 automatically  be reduced to zero in five equal decrements commencing on
 the tenth year after the initial occupancy date, provided  that,  as  of
 the  date  of such reduction, such accommodations have been and continue
 to be 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.  Notwithstanding such provision as  contained  in  the
 note  and  mortgage, the loan shall be reduced to zero only if, prior to
 or simultaneously with delivery of such note and mortgage, the supervis-
 ing agency made a written determination that  such  reduction  would  be
 necessary to ensure the continued affordability or economic viability of
 such  housing  project.  Such  written  determination shall document the
 basis upon which the loan was determined to be eligible for evaporation.
   § 27. Section 576-c of the private housing finance law, as amended  by
 section  2  of  chapter  254  of the laws of 1998, is amended to read as
 follows:
   § 576-c. Loans to housing development companies by a municipality.  In
 addition  to the powers granted to municipalities pursuant to this arti-
 cle, a municipality, acting by its supervising agency,  may  make  loans
 for  the  purposes  of  acquisition,  rehabilitation  or construction of
 dwelling accommodations to a non-profit housing development fund  compa-
 ny,  a  wholly-owned  subsidiary  of  such  company,  a  partnership the
 controlling interest of which is held by  such  company  and  which  has
 agreed  to  limit  profits  or rate of return of investors in accordance
 with a formula established or approved by  the  company,  or  a  private
 developer  which has agreed to limit profits or rate of return of inves-
 tors in accordance with a formula established or approved by the  compa-
 S. 2985--C                         18
 
 ny,  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 a municipality and have prior to their initial occu-
 pancy  in  such  accommodations  resided in emergency shelter facilities
 operated by or on behalf of the municipality or  who  are  otherwise  in
 need  of emergency shelter as determined by the municipality, providing,
 however, that in the case of a building  acquired  by  such  a  company,
 subsidiary,  partnership, or developer the obligation to provide housing
 accommodations for such persons shall be  applicable  only  to  dwelling
 accommodations which are or become vacant after the date of acquisition.
 Such  loans  may  be  made  for such period of time and pursuant to such
 terms and conditions as may be required by the municipality,  INCLUDING,
 BUT NOT LIMITED TO, TERMS AND CONDITIONS PROVIDING THAT THE LIEN CREATED
 BY  THE  NOTE AND MORTGAGE, AND, AS APPLICABLE, ANY REGULATORY AGREEMENT
 EXECUTED BY THE OWNER AND SUCH MUNICIPALITY, MAY BE RECORDED IN AN EQUAL
 OR SUBORDINATE POSITION, OR SUBSEQUENTLY MADE EQUAL OR  SUBORDINATE,  TO
 THE  LIEN  RECORDED  BY ANY PRIVATE LENDER AGAINST THE DWELLING AIDED BY
 THE LOAN MADE PURSUANT TO THIS ARTICLE, and the  supervising  agency  of
 such  municipality  may provide that the amount of the note and mortgage
 shall automatically be reduced to zero in five equal decrements commenc-
 ing on the tenth year after the initial occupancy date,  provided  that,
 as  of  the  date  of  such reduction, such accommodations have been and
 [continues] CONTINUE to be owned and operated  in  a  manner  consistent
 with an agreement with the municipality contained in such note and mort-
 gage  to  provide  housing  for  such  persons.    Notwithstanding  such
 provision as contained in the note  and  mortgage,  the  loan  shall  be
 reduced  to  zero  only  if, prior to or simultaneously with delivery of
 such note and mortgage, the supervising agency made a  written  determi-
 nation  that  such  reduction would be necessary to ensure the continued
 affordability or economic viability of such housing project. Such  writ-
 ten  determination  shall  document  the  basis  upon which the loan was
 determined to be eligible for evaporation.
   § 28. The private housing finance law is amended by  adding  four  new
 sections 611, 612, 613 and 614 to read as follows:
   §  611. 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.
 S. 2985--C                         19
 
   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.
   § 612. COMPLIANCE MONITORING. 1. ANY SUPERVISING AGENCY AND ANY CORPO-
 RATE GOVERNMENTAL AGENCY THAT CONSTITUTES A 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 AGREEMENT, REGULATORY AGREEMENT,
 DEED, LAND  DISPOSITION  AGREEMENT,  OR  RESTRICTIVE  COVENANT  WITH  OR
 APPROVED  BY  SUCH  AGENCY OR CORPORATION AND ENTERED INTO IN CONNECTION
 WITH AN ACTION TAKEN PURSUANT TO THIS  CHAPTER,  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.
   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.
   § 613. CHARGES. A MUNICIPALITY, OR A  SUPERVISING  AGENCY  THEREUNDER,
 MAY  REQUIRE  THE  PAYMENT  OF  CHARGES BY AN OWNER IN CONSIDERATION FOR
 FINANCING, REGULATION, SUPERVISION AND AUDIT OF LOANS  AND  GRANTS  MADE
 PURSUANT  TO  THE PROVISIONS OF THIS CHAPTER. SUCH CHARGES SHALL BE PAID
 INTO THE TREASURY OF THE MUNICIPALITY REQUIRING THE CHARGES AND SHALL BE
 PAID AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH MUNICIPALITY.
   § 614. SERVICING LOANS. AN AGENCY MAY MAKE PROVISION  IN  A  NOTE  AND
 LOAN  AGREEMENT  OR BY SEPARATE AGREEMENT FOR THE PERFORMANCE OF LOAN OR
 GRANT SERVICING FUNCTIONS, INCLUDING,  BUT  NOT  LIMITED  TO,  FUNCTIONS
 RELATED  TO LENDING OR PROVIDING A GRANT FOR CONSTRUCTION, AS MAY GENER-
 ALLY 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 MAY PAY A
 REASONABLE AND CUSTOMARY FEE TO  SUCH  FINANCIAL  INSTITUTION  OR  OTHER
 QUALIFIED  ENTITY APPOINTED BY SUCH AGENCY, OR TO WHOSE APPOINTMENT SUCH
 AGENCY PROVIDED CONSENT, FOR THE  PERFORMANCE  OF  SUCH  LOAN  OR  GRANT
 SERVICING FUNCTIONS.
 S. 2985--C                         20
 
   §  29.  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-
 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.
   § 30. 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.
   §  31.  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,
 S. 2985--C                         21
 
 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.
   § 32. 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.
   § 33. 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]  DWELLINGS  on
 such  vacant  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-residen-
 tial property or the vacant land for the purpose of such rehabilitation,
 conversion or construction or owns the existing multiple dwelling or the
 non-residential 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, INCIDENTAL OR APPURTENANT TO SUCH REHABILI-
 TATION, CONVERSION OR CONSTRUCTION, 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  FOR
 HOUSING ACCOMMODATIONS, OR (III) PROVIDING FOR OTHER COSTS OF DEVELOPING
 S. 2985--C                         22
 
 HOUSING  ACCOMMODATIONS,  and  such private investors and a municipality
 may jointly 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 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 the vacant  land  and  the
 multiple  dwelling  to  be  constructed,  OR,  IN THE CASE OF A MULTIPLE
 DWELLING HELD IN THE CONDOMINIUM FORM OF OWNERSHIP, A NOTE AND  MORTGAGE
 UPON  THE  CONDOMINIUM UNITS REHABILITATED WITH SUCH PARTICIPATION LOAN,
 PROVIDED THAT A PARTICIPATION LOAN TO AN OWNER WHO IS A LESSEE SHALL  BE
 SECURED BY A LEASEHOLD INTEREST IN SUCH PROPERTY, AND provided, FURTHER,
 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  amorti-
 zation 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 continues to be owned  and  operated
 in  a  manner  consistent  with  a regulatory agreement with the munici-
 pality. 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 with delivery of such bond or
 note and mortgage, the agency made a  written  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 eligi-
 ble 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.
 S. 2985--C                         23

   (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]  FORTY  years,
 PROVIDED  THAT  SUCH  PERIOD MAY BE EXTENDED AS THE AGENCY MAY DETERMINE
 NECESSARY TO ENSURE THE CONTINUED AFFORDABILITY OR ECONOMIC VIABILITY OF
 THE MULTIPLE DWELLING, 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.
   § 34. 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.
   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
 S. 2985--C                         24
 
 portion of the loan funded by the agency is represented  by  a  separate
 note and mortgage.
   §  35.  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 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, INCLUDING,
 BUT NOT LIMITED TO, TERMS PROVIDING THAT THE LIEN CREATED BY  SUCH  NOTE
 AND  MORTGAGE,  AND, IF APPLICABLE, ANY REGULATORY AGREEMENT EXECUTED BY
 THE SPONSOR AND SUCH AGENCY OR RESTRICTIVE  COVENANT  APPROVED  BY  SUCH
 AGENCY,  MAY  BE RECORDED IN AN EQUAL OR SUBORDINATE POSITION, OR SUBSE-
 QUENTLY MADE EQUAL OR SUBORDINATE, TO THE LIEN CREATED  BY  ANY  PRIVATE
 LENDER AGAINST SUCH ELIGIBLE PROJECT.
   (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
 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.
 S. 2985--C                         25

   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  MORTGAGOR  WITH A REGULATORY AGREEMENT OR RESTRICTIVE COVENANT WITH
 OR APPROVED BY THE AGENCY AND UPON THE SATISFACTION  OF  ANY  ADDITIONAL
 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 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 FORTY YEARS, PROVIDED THAT SUCH PERIOD MAY BE EXTENDED AS
 THE AGENCY MAY DETERMINE IS NECESSARY TO ENSURE THE  CONTINUED  AFFORDA-
 BILITY  OR  ECONOMIC  VIABILITY OF THE ELIGIBLE PROJECT, 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-
 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.
 S. 2985--C                         26
 
   [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, INCIDENTAL OR  APPURTENANT  TO  THE
 CONSTRUCTION OF SUCH ELIGIBLE PROJECTS.
   [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
 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
 S. 2985--C                         27
 
 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.
   §  36.  Paragraph (g) of subdivision 6 of section 1802 of the New York
 city charter, as amended by vote of the people of the city of  New  York
 at  the general election held in November of 1989, is amended to read as
 follows:
 S. 2985--C                         28
 
   (g) [impose and collect] REQUIRE THE PAYMENT OF charges [and fees]  IN
 CONSIDERATION  for  the  financing, regulation, supervision and audit of
 municipally-aided projects and loan programs administered by the commis-
 sioner, which charges [and fees]  shall  be  [set  aside  in  a  special
 account  for  administrative  expenses  of the department] PAID INTO THE
 TREASURY OF THE CITY AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND
 OF THE CITY;
   § 37. This act shall take effect immediately, provided that:  (i)  the
 amendments  to  subdivision  1 of section 696-a of the general municipal
 law made by section two of this act shall be subject to  the  expiration
 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  three of this act shall take effect; and (ii) the amendments to
 subdivision 1 of section 576-c of the private housing finance  law  made
 by section twenty-six of this act shall be subject to the expiration and
 reversion of such subdivision pursuant to section 2 of chapter 84 of the
 laws  of 1993, as amended, when upon such date the provisions of section
 twenty-seven of this act shall take effect.