2012 New York Consolidated Laws
PVH - Private Housing Finance
Article 18 - (1100 - 1103) LOW INCOME HOUSING TRUST FUND PROGRAM
1102 - Cooperative or condominium, homesteading and rental contracts.

 
    § 1102. Cooperative or condominium, homesteading and rental contracts.
  1.  Within  the  limit  of  funds  available  in  the housing trust fund
  account, the corporation is hereby authorized to  enter  into  contracts
  with  eligible  applicants  for  the  furnishing  by  such applicants of
  housing for persons of low income. Each such contract shall provide that
  eligible applicants rehabilitate or construct one or  more  projects  or
  convert  one  or  more  nonresidential  properties.  Such  contracts may
  provide for payments,  grants  or  loans  by  the  corporation  for  the
  activities  to  be  carried  out  by  the  eligible  applicant under the
  contract. Such contracts shall provide that a private developer make  an
  equity  investment  of  the  greater  of (i) two and one-half percent of
  project costs or (ii) five percent of project costs  less  grants  which
  are  to  be  applied  to  such costs. The foregoing shall not preclude a
  private developer from making a greater equity investment. Any payments,
  grants or loans made by the  corporation  outstanding  at  the  time  of
  resale  shall  be  subject  to repayment in whole or in part upon resale
  after termination of the regulatory period  and  as  otherwise  provided
  therein. Such repayment provisions may survive the end of the regulatory
  period. Such contracts may provide that eligible applicants shall either
  (a)  perform  activities  specified under the contract themselves or (b)
  act  as  administrators  of  a  program   under   which   projects   are
  rehabilitated  or constructed or nonresidential properties are converted
  by other eligible applicants or (c) perform both such functions. In  the
  case  of  a  municipality  acting as an administrator, funds provided to
  such municipality hereunder shall not be deemed to be  municipal  funds.
  The  corporation  shall  refer any request for payments, grants or loans
  from persons of low income to eligible applicants in the area  in  which
  such  persons reside. Loans may be in the form of participation in loans
  including but not  limited  to  participation  in  loans  originated  or
  financed by lending institutions as defined in section forty-two of this
  chapter,  the  state  of  New  York  mortgage  agency, the New York city
  housing development corporation, the  New  York  state  housing  finance
  agency  or private or public employee pension funds. Notwithstanding any
  other provision of law, payments, grants and loans may be  deposited  by
  the  corporation  directly  with  a lending institution at or before the
  time  of  initial  loan  closing  pursuant  to   an   escrow   agreement
  satisfactory  to the corporation. Payments, grants and loans shall be on
  such terms and conditions as the corporation, or the eligible  applicant
  with  the  approval  of  the  corporation,  as  the  case  may be, shall
  determine. Payments, grants and loans shall  be  used  to  pay  for  the
  actual  and  necessary cost of acquisition, construction, rehabilitation
  or conversion, provided  that  not  more  than  fifty  percent  of  such
  payments, grants and loans received for the rehabilitation, construction
  or  conversion  of  a  project may be used for the cost of the project's
  acquisition and not more than ten percent of such payments,  grants  and
  loans  may be used for the rehabilitation, construction or conversion of
  community service  facilities  and,  provided  further,  that  payments,
  grants or loans shall not be used for (i) the administrative costs of an
  eligible  applicant except as otherwise authorized by law, (ii) the cost
  of  the  acquisition,  construction,  conversion  or  rehabilitation  of
  residential  units  which, subsequent to such acquisition, construction,
  conversion or rehabilitation, are to be occupied by persons  other  than
  persons   of  low  income,  and  (iii)  the  cost  of  the  acquisition,
  construction, conversion or rehabilitation of units which, subsequent to
  such  acquisition,  construction,  conversion  or  rehabilitation,   are
  occupied  or  to be occupied for other than residential purposes, except
  for community service facilities as described above. No  such  payments,
  grants or loans shall exceed a total of one hundred twenty-five thousand

  dollars  per  dwelling  unit.  Among  the criteria the corporation shall
  consider in determining whether to provide additional funds are: average
  cost of construction in the area, location of the project and the impact
  of  the  additional  funding on the affordability of the project for the
  occupants of such project. The length of any loan  provided  under  this
  article shall not exceed thirty years. No more than fifty percent of the
  total  amount  originally  appropriated  pursuant to this article in any
  fiscal year shall be allocated to projects  located  within  any  single
  municipality.  Of  the amount originally appropriated to the corporation
  in any fiscal year, no more  than  thirty-three  and  one-third  percent
  shall be allocated to private developers for projects within a city with
  a   population  of  one  million  or  more.  Of  the  amount  originally
  appropriated to the  corporation  in  any  fiscal  year,  no  more  than
  thirty-three  and  one-third  percent  shall  be  allocated  to  private
  developers for projects in the area outside cities with a population  of
  one million or more.
    2. The corporation and eligible applicants which act as administrators
  of  a  program  under this article shall deposit any recaptured funds or
  funds from the repayment of loans and interest received  on  loans  into
  the housing trust fund account.
    3.  The corporation shall not enter into a contract under this article
  unless the eligible applicant has  submitted  an  application  and  such
  application  contains  a  plan,  acceptable  to  the  corporation, which
  provides for each project:
    (a) That violations on the project which are classified  as  hazardous
  or  immediately hazardous shall be repaired in accordance with state and
  local laws and regulations of state and local agencies and  the  project
  shall   be   brought  into  compliance  with  all  applicable  laws  and
  regulations.
    (b) For the  establishment  of  occupant  selection  procedures  which
  provide  that  any  lawful  occupants  who  live  in  a project prior to
  rehabilitation  shall  not  be   displaced   as   a   result   of   such
  rehabilitation,   other   than   temporarily,  in  which  case  suitable
  relocation arrangements shall  be  provided,  and  that  any  additional
  occupants  who move into a project are persons of low income. Preference
  in selection of such additional occupants; (i) shall be given to persons
  or  families  with  the  lowest  incomes  possible,  given  the   income
  requirements  of the project and; (ii) shall also be given to persons or
  families whose current housing fails to meet basic standards  of  health
  and  safety  and  who have little prospect of improving the condition of
  their housing except by residing in a project receiving payments, grants
  or loans under this article.
    (c) In the case of a homesteading project that  (i)  the  project  may
  only  be  transferred  or  sold  to  an eligible applicant; and (ii) the
  resale price of the project shall not exceed an amount equal to the  sum
  of  (A)  the  original  equity  paid  by  the  owner for the project and
  rehabilitation or  construction  thereof,  exclusive  of  any  payments,
  grants  or loans received pursuant to this article for such purposes, or
  from such other sources as determined by the corporation, with  interest
  thereon  at  the  rate of six percent per annum, (B) the cost of capital
  improvements to the project paid by such owner after the  completion  of
  rehabilitation  or  construction,  exclusive  of any payments, grants or
  loans received pursuant to this article for such purposes, or from  such
  other sources as determined by the corporation, with interest thereon at
  the  rate  of six percent per annum, (C) the actual amortization paid by
  such owner in the reduction of total outstanding principal  indebtedness
  on  all existing and prior mortgages on, or loans for, such project, but
  only to the extent that the proceeds of such  mortgages  or  loans  were

  used  by  the  owner  for the project and rehabilitation or construction
  thereof or for the cost of capital improvements thereto,  with  interest
  thereon at the rate of six percent per annum, (D) the actual outstanding
  principal  indebtedness  on all existing mortgages on, or loans or other
  obligations for, such project which the owner is  required  to  satisfy,
  but only to the extent that the proceeds of such mortgages or loans were
  used  by  the  owner  for the project and rehabilitation or construction
  thereof or for the cost of capital improvements thereto,  with  interest
  thereon  at  the  rate  of  six  percent per annum, provided that if the
  indebtedness is not paid in full upon the  sale  of  the  project,  such
  owner  shall  not  be credited with the amount of such indebtedness, and
  (E) the reasonable costs and expenses incurred in  connection  with  the
  sale of such project.
    (d)  In  the  case  of  a  cooperative  project  that  (i)  the shares
  applicable to a cooperative unit shall be transferred or sold only to an
  eligible applicant; and (ii) the resale price of shares applicable to  a
  cooperative  unit shall not exceed an amount equal to the sum of (A) the
  original equity paid by the tenant shareholder for such shares  and  for
  the  rehabilitation  or  construction  of  such  unit,  exclusive of any
  payments, grants or loans received pursuant to  this  article  for  such
  purposes  or  from  such other sources as determined by the corporation,
  with interest thereon at the rate of six percent per annum, (B) the cost
  of capital improvements to such unit paid  by  such  tenant  shareholder
  after the completion of rehabilitation or construction, exclusive of any
  payments,  grants  or  loans  received pursuant to this article for such
  purposes or from such other sources as determined  by  the  corporation,
  with  interest  thereon  at  the  rate of six percent per annum, (C) the
  pro-rata portion of any capital assessments or capital contributions for
  building  wide  improvements  paid  by  such  tenant  shareholder,  with
  interest  thereon at the rate of six percent per annum, (D) the pro-rata
  portion of actual amortization paid by such tenant  shareholder  on  all
  existing  and  prior mortgages on such project in the reduction of total
  outstanding principal indebtedness, with interest thereon at the rate of
  six percent per annum, (E) the actual amortization paid by  such  tenant
  shareholder in the reduction of total outstanding principal indebtedness
  on  all  existing  and prior loans for such unit, but only to the extent
  that the proceeds of such loans were used by the tenant shareholder  for
  the  purchase  of  such  shares or for the cost of the rehabilitation or
  construction of, or capital improvements to, such  unit,  with  interest
  thereon at the rate of six percent per annum, (F) the actual outstanding
  principal  indebtedness  on  all existing loans or other obligations for
  such unit which the tenant shareholder is required to satisfy, but  only
  to  the  extent that the proceeds of such loans were used by such tenant
  shareholder for the purchase of such shares  or  for  the  cost  of  the
  rehabilitation  or  construction  of,  or  capital improvements to, such
  unit, provided that if such indebtedness is not paid in  full  upon  the
  sale  of  such  tenant's  shares  such  tenant  shareholder shall not be
  credited with the amount of such indebtedness, and  (G)  the  reasonable
  costs and expenses incurred in connection with the sale of such shares.
    (e)  In  the case of a condominium project that (i) a condominium unit
  shall be transferred or sold only to an eligible applicant; and (ii) the
  resale price of a condominium unit shall not exceed an amount  equal  to
  the  sum  of (A) the original equity paid by the owner for such unit and
  the rehabilitation or construction thereof, exclusive of  any  payments,
  grants  or  loans received pursuant to this article for such purposes or
  from such other sources as determined by the corporation, with  interest
  thereon  at  the  rate of six percent per annum, (B) the cost of capital
  improvements to such unit paid by such owner  after  the  completion  of

  rehabilitation  or  construction,  exclusive  of any payments, grants or
  loans received pursuant to this article for such purposes or  from  such
  other sources as determined by the corporation, with interest thereon at
  the  rate  of  six  percent  per  annum, (C) the pro-rata portion of any
  capital  assessments  or  capital  contributions   for   building   wide
  improvements paid by such owner to the project, with interest thereon at
  the  rate  of six percent per annum, (D) the actual amortization paid by
  such owner on all existing and prior mortgages on, or  loans  for,  such
  unit  in  the reduction of total outstanding principal indebtedness, but
  only to the extent that the proceeds of such  mortgages  or  loans  were
  used  by  such owner for the unit and the rehabilitation or construction
  thereof or for the cost of capital improvements  thereto  with  interest
  thereon at the rate of six percent per annum, (E) the actual outstanding
  principal  indebtedness on all existing mortgages on, and loans or other
  obligations for, such unit which the owner is required to  satisfy,  but
  only  to  the  extent  that the proceeds of such mortgages or loans were
  used by such owner for the unit and the rehabilitation  or  construction
  thereof  or  for the cost of capital improvements thereto, provided that
  if the indebtedness is not paid in full upon the sale of such unit, such
  owner shall not be credited with the amount of  such  indebtedness,  and
  (F)  the  reasonable  costs and expenses incurred in connection with the
  sale of such unit.
    (f) In the case of a rental project that (i) the  rental  project  may
  only  be  transferred  or  sold  to  an eligible applicant; and (ii) the
  resale price of the rental project shall not exceed an amount  equal  to
  the sum of (A) the original equity paid by the owner for the project and
  rehabilitation  or  construction  thereof,  exclusive  of  any payments,
  grants or loans received pursuant to this article for such  purposes  or
  from  such other sources as determined by the corporation, with interest
  thereon at the rate of six percent per annum, (B) the  cost  of  capital
  improvements  to  the  project paid by the owner after the completion of
  rehabilitation or construction, exclusive of  any  payments,  grants  or
  loans  received  pursuant to this article for such purposes or from such
  other sources as determined by the corporation, with interest thereon at
  the rate of six percent per annum, (C) the actual amortization  paid  by
  such  owner  on  all existing and prior mortgages on, or loans for, such
  project in the reduction of total  outstanding  principal  indebtedness,
  but only to the extent that the proceeds of such mortgages or loans were
  used by such owner for the project and rehabilitation thereof or for the
  cost  of capital improvements thereto, with interest thereon at the rate
  of  six  percent  per  annum,  (D)  the  actual  outstanding   principal
  indebtedness on all existing mortgages on, or loans or other obligations
  for,  such  project  which the owner is required to satisfy, but only to
  the extent that the proceeds of such mortgages or loans were used by the
  owner for the project and rehabilitation thereof  or  for  the  cost  of
  capital  improvements  thereto, provided that if the indebtedness is not
  paid in full upon the sale of the  project,  such  owner  shall  not  be
  credited  with  the  amount of such indebtedness, and (E) the reasonable
  costs and expenses incurred in connection with the sale of such project.
    (g) In the case of  a  rental  project,  that  the  project  shall  be
  operated initially as a rental property, and when located in the city of
  New  York  shall  be  subject  to the rent stabilization law of nineteen
  hundred sixty-nine, and when located in a municipality which has elected
  to be covered by the provisions of the emergency tenant  protection  act
  of  nineteen seventy-four, be subject to the provisions of such act. Any
  subsequent conversion to cooperative or condominium ownership during the
  period in which such property remains subject to the provisions of  this
  article shall only be allowed with the consent of the corporation and if

  done  pursuant  to section three hundred fifty-two-eeee or three hundred
  fifty-two-eee of the general business law shall only be allowed pursuant
  to  a  non-eviction  plan.  The  conversion  of  a  rental  project   to
  cooperative  or  condominium  ownership  shall  make  the cooperative or
  condominium subject to the provisions of this article for cooperative or
  condominium projects for the remaining term which the rental project was
  to be subject to the provisions of this article.
    (h) To be located in  an  area  which  is  blighted,  deteriorated  or
  deteriorating,  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,  insanitary,  deteriorating  or deteriorated
  conditions, an aged housing stock, or vacant  non-residential  property,
  or other factors indicating an inability or unwillingness of the private
  sector  unaided  to cause the rehabilitation, construction or conversion
  which is contracted for under this article.
    3-a. The corporation shall  provide  the  applicant  with  a  list  of
  conditions  that  must be met prior to entering into a contract pursuant
  to  this  article.  Within  fifteen  working  days  of  receipt  by  the
  corporation   of   all  documents  in  satisfaction  of  the  list,  the
  corporation  shall  notify  the  applicant   of   the   sufficiency   or
  insufficiency  of  the documents. After satisfaction by the applicant of
  all conditions required by the corporation  prior  to  entering  into  a
  contract the corporation shall enter into the contract within forty-five
  working days of satisfaction of such conditions.
    4.  Notwithstanding  the  provisions of, or any regulation promulgated
  pursuant to, the emergency housing rent control law, the local emergency
  housing rent control act, or local law  enacted  pursuant  thereto,  the
  rent  stabilization law of nineteen hundred sixty-nine, or the emergency
  tenant protection act of nineteen seventy-four, the  eligible  applicant
  with  the  approval  of  the corporation shall have the power to set the
  initial rent level of any rental housing accommodation which is  located
  in  a rental or homesteading project receiving payments, grants or loans
  under this article.
    5. Any cooperative or condominium or  rental  project  which  receives
  payments,  grants  or loans pursuant to this article shall be subject to
  its provisions for a period of  twenty  years  following  completion  of
  rehabilitation work, construction or conversion or for the period during
  which  any  loan  or  indebtedness  received  under this article remains
  outstanding, whichever is greater  provided  however  that  all  housing
  accommodations  in  rental  projects shall continue to be subject to the
  rent stabilization law of nineteen hundred sixty-nine or  the  emergency
  tenant protection act of nineteen seventy-four, as provided in paragraph
  (g)  of  subdivision  three  of this section as the case may be, for the
  period specified in this subdivision and thereafter the applicability of
  such laws shall terminate  as  to  each  accommodation  upon  the  first
  vacancy which occurs in each accommodation.
    6.  Any  homesteading project which receives payments, grants or loans
  under this article shall be subject to its provisions for  a  period  of
  fifteen  years following completion of rehabilitation work, construction
  or conversion, or for the period during which any loan  or  indebtedness
  received under this article remains outstanding, whichever is greater.
    6-a.  Notwithstanding  any  provisions of subdivisions five and six of
  this section to the contrary, in the  case  of  projects  subject  to  a
  mortgage made by any lender:
    (a)  such  lender,  if not the corporation, shall give the corporation
  notice when an owner has  defaulted  on  any  payment  of  principal  or
  interest on such mortgage loan for a project for a consecutive period of
  sixty days.

    (b)  following  receipt of such notice, or at such earlier time as the
  corporation deems appropriate, the corporation shall seek to  cure  such
  default  and make the project economically viable by assisting the owner
  in entering into a mortgage  modification  agreement  with  the  lender,
  finding  a  new  eligible  applicant  to  own the project and assume the
  obligations under the mortgage or taking such other actions,  consistent
  with   the   provisions  of  this  article,  as  the  corporation  deems
  appropriate.
    (c) notwithstanding the provisions of paragraphs (a) and (b)  of  this
  subdivision,  with respect to any lender other than the corporation, the
  corporation may provide in agreements respecting any project that  where
  a  lender  shall  have  foreclosed  or  obtained  title  to a project in
  accordance with law and the provisions of its mortgage, the  project  or
  particular residential units therein shall not be subject to one or more
  provisions  of  this article, other than the rent stabilization coverage
  provisions of paragraph (g) of subdivision three of  this  section.  Any
  agreement  pursuant  to this paragraph shall only be made upon a finding
  by the corporation that such agreement is necessary in order to enable a
  project owner to obtain a mortgage loan from a  lender  other  than  the
  corporation.
    7. The corporation shall provide for the review, at periodic intervals
  at  least  annually,  of  the  performance  of eligible applicants under
  contract pursuant to  this  article.  Such  review  shall,  among  other
  things,  be  for  the purposes of ascertaining conformity to contractual
  provisions,  the  financial  integrity  and   efficiency   of   eligible
  applicants  and  the  evaluation  of the project. Contracts entered into
  pursuant to this article may be terminated, funds may  be  withheld  and
  unspent  funds  may  be  recaptured by the corporation upon a finding of
  substantial nonperformance or breach by the eligible  applicant  of  its
  obligations under its contract.
    8.  Within  each  of  the three categories of projects (cooperative or
  condominium, rental, or homesteading), preference  in  the  awarding  of
  contracts shall be given to economically feasible projects which contain
  a  substantial  number  of  persons  of low income whose income does not
  exceed  fifty  percent  of  the  median  income  for  the   metropolitan
  statistical  area  in which the project is located, or if the project is
  located outside such an area, to projects which  contain  a  substantial
  number  of  persons  of  low  income  whose  incomes do not exceed fifty
  percent of the median income for the county  in  which  the  project  is
  located,  additional  preference shall be given to economically feasible
  projects located on a brownfield site that has received a certificate of
  completion.