* § 696-a. Loans. 1. 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 development 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, recreational, communal and other non-residential
facilities and the outfitting thereof, the curing of problems caused by
abnormal site conditions, excavation and construction of footings and
foundations and other improvements associated with the provision of
infrastructure, or (iii) providing for other costs of construction for
the development of private and multiple dwelling housing accommodations.

b. 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 regulatory
agreement with the agency limiting profits.

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
property title to which is held by the municipality or, in the case of a
condominium, a note and mortgage upon each of the 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, 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.

d. Such note and mortgage may provide that the loan shall
automatically be reduced to zero over a period of up to thirty years of
continuous compliance by the owner with a regulatory agreement with the
agency limiting profits and rentals charged or requiring owner
occupancy. 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 agency made
a written determination that such reduction would be necessary to ensure
the continued affordability or economic viability of the housing
accommodations assisted by such loan. Such written determination shall
document the basis upon which the loan was determined to be eligible for
evaporation.

e. 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.

f. 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.

g. For purposes of this 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 obligation and which
imposes a lien on or affects title to such shares or such proprietary
lease; and (ii) the term "owner" shall mean an individual, partnership,
corporation or other entity, including a non-profit company, a mutual
company, or a housing development fund company, having record or
beneficial title in fee simple to real property or the lessee thereof
under a lease having a term of at least forty-nine years.

2. Notwithstanding the provisions of, or any regulation promulgated
pursuant to, the emergency housing rent control law, the local emergency
housing rent control act, the emergency tenant protection act of
nineteen seventy-four, and/or any local law enacted pursuant thereto,
upon completion of the rehabilitation of any building used primarily for
residential purposes, which is aided by a loan made by a municipality
pursuant to subdivision one of this section in a jurisdiction in which
rents are regulated pursuant to any of the above laws or acts, the
agency shall establish the initial rent for each rental dwelling unit
within the building. All dwelling units within such building subsequent
to establishment of initial rents by the agency shall be subject to the
emergency housing rent control law, the local emergency housing rent
control act, the emergency tenant protection act of nineteen
seventy-four, and/or any local law enacted pursuant thereto, if
applicable in the municipality, but only if such laws and/or acts would
otherwise apply to such dwelling units. The tenants in occupancy of such
dwelling units in such a building that are regulated pursuant to such
laws and/or acts shall be offered a choice of a one-year or two-year
lease at the initial rent established by the agency, notwithstanding any
contrary provisions of, or regulations adopted pursuant to, such laws
and/or acts. The agency shall cause all tenants in occupancy of each
dwelling unit affected by this subdivision to be notified of and have an
opportunity to comment upon the contemplated rehabilitation. Such
notification shall advise such tenants of the approximate expected rent
increase and the subsequent availability of a one- or two-year lease.
Such notification and opportunity to comment shall be provided prior to
commencement of the rehabilitation and again after its completion before
establishment of the initial rents.

3. The agency shall use its best efforts to ensure that actions
undertaken pursuant to subdivision two of this section are structured so
as to minimize the likelihood of any involuntary economic displacement
of tenants who reside in multiple dwellings which are the subject of
such actions, provided, however, that if temporary physical displacement
is required as a direct result of rehabilitation work which is performed
in a multiple dwelling which is aided by a loan made by a municipality
pursuant to subdivision one of this section, suitable temporary
relocation arrangements shall be provided.

* NB Effective until July 1, 2024

* § 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 to the owner of any property that is part of an
urban development 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, recreational, communal and other non-residential
facilities and the outfitting thereof, the curing of problems caused by
abnormal site conditions, excavation and construction of footings and
foundations and other improvements associated with the provision of
infrastructure, or (iii) providing for other costs of construction for
the development of private and multiple dwelling housing accommodations.
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 regulatory agreement with the
agency limiting profits. Any loan made in accordance with this section
shall be secured by a note and mortgage upon the property improved,
other than any such property title to which is held by the municipality,
or, in the case of a condominium, a note and mortgage upon each of the
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 accommodations 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 article, (1) the term "mortgage" shall include any
pledge or assignment of shares or assignment of a proprietary lease in a
cooperative housing corporation where such pledge or assignment is
intended as security for the 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 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.

* NB Effective July 1, 2024