N.Y. Private Housing Finance Law § 402

§ 402. Loans to owners. 1. Notwithstanding the provisions of any\ngeneral, special or local law, a municipality, by such officer or agency\nas determined by its local legislative body, is hereby authorized to\nmake or contract to make loans to the owners of existing multiple\ndwellings within its territorial limits, subject to the limitations in\nsubdivision two of this section, in such amounts as may be required for\nthe installation of proper heating facilities, or elimination of\nconditions dangerous to human life or detrimental to health, including\nnuisances as defined in section three hundred nine of the multiple\ndwelling law, or other rehabilitation or improvement of such multiple\ndwellings, and if such owner acquires the multiple dwelling for the\npurposes of such rehabilitation or improvement or owns the multiple\ndwelling subject to an outstanding indebtedness, such loans may include\nsuch amounts as may be required for the cost of such acquisition or for\nthe refinancing of such outstanding indebtedness, and may make temporary\nloans or advances to such owners in anticipation of the permanent\nmunicipal loans for such purposes.\n 2-a. As used in this section the term "value" shall mean the "as is"\nvalue of the multiple dwelling and the land upon which it is situated\nprior to such installation, elimination, other rehabilitation or\nimprovement referred to in subdivision one of this section plus the\ntotal of all costs of such installation, elimination, rehabilitation or\nimprovement including, but not limited to, the costs of any or all\nundertakings necessary for the planning, financing, tenant relocation,\nacquisition, construction, equipment and development in connection\ntherewith.\n 2-b. (a) Each permanent loan shall be secured by a bond and mortgage\nor note and mortgage upon the multiple dwelling and the land upon which\nit is situated; where the loan is made to an owner who is a lessee, such\nloan shall be secured by a first lien on such property.\n (b) The amount of any such loan shall not exceed the cost of the\ninstallation of proper heating facilities, or elimination of conditions\ndangerous to human life or detrimental to health, including nuisances as\ndefined in section three hundred nine of the multiple dwelling law, or\nother rehabilitation or improvement provided that, if any portion of\nsuch loan is used for the cost of acquisition of the land and the\nmultiple dwelling or for re-financing, the total amount of such loan\nshall not exceed two times the cost of such installation, elimination of\nsuch conditions, rehabilitation or improvement.\n (c) The amount of any such loan, together with the amount of all prior\nliens and encumbrances, shall not exceed, except in the case of a loan\nmade to a non-profit company, a mutual company, or a housing development\nfund company, ninety per centum of the value of the property, after\ncompletion of the installation of proper heating facilities, or\nelimination of such conditions or other rehabilitation or improvement,\nas estimated by the agency, unless the agency makes a written\ndetermination that the owner has insufficient resources to pay for the\nremaining ten per centum of the value of the property, after completion\nof such installation, elimination, or other rehabilitation or\nimprovement, as estimated by the agency, in which case such loan shall\nnot exceed ninety-five per centum of the value of the property, after\ncompletion of the installation of proper heating facilities, or\nelimination of such conditions or other rehabilitation or improvement,\nas estimated by the agency. The amount of any such loan, together with\nthe amount of all prior liens and encumbrances, made to a non-profit\ncompany, a mutual company, or a housing development fund company shall\nnot exceed the value of the property after completion of such\ninstallation, elimination, or other rehabilitation or improvement, as\nestimated by the agency provided that when after completion of such\ninstallation, elimination or other rehabilitation or improvement, such\nproject is, or is to be operated exclusively for the benefit of persons\nor families who are entitled to occupancy by reason of ownership of\nstock in the corporate owners, such loan shall not exceed ninety-eight\npercentum of the value of the property, after completion of such\ninstallation, elimination, or other rehabilitation or improvement, as\nestimated by the agency, unless the agency makes a written determination\nthat the owner has insufficient resources to pay for the remaining two\nper centum of the value of the property, after completion of such\ninstallation, elimination, or other rehabilitation or improvement, as\nestimated by the agency, in which case such loan shall not exceed the\nvalue of the property, after completion of such installation,\nelimination, or other rehabilitation or improvement, as estimated by the\nagency.\n (d) Each such bond and mortgage or note and mortgage shall be repaid\nover or within a period of thirty years in such manner as may be\nprovided in such bond and mortgage or note and mortgage and contract but\nin no case to exceed the probable life of the multiple dwelling which is\nhereby determined to be thirty years. Such bond and mortgage or note and\nmortgage and the contract in connection with such permanent and\ntemporary loans may contain such other terms and provisions not\ninconsistent with the provisions of this article as the local\nlegislative body or the agency may deem necessary or desirable to secure\nrepayment of the loan, the interest thereon and other charges in\nconnection therewith and to carry out the purposes and provisions of\nthis article; notwithstanding the foregoing, a loan made prior to\nJanuary first, nineteen hundred seventy-eight may, in the discretion of\nthe agency, be extended to a term up to forty-five years. The agency may\nmodify the rate and time of payment of interest on the original loan and\nthe rate and time of amortization of principal in such manner as\nrequired to secure payment of the loan within the extended term.\n 2-c. If a loan pursuant to this article is made to a non-profit\ncompany or a housing development fund company which agrees to provide\nhousing accommodations exclusively for persons and families of low\nincome, at least thirty percent of whom are referred to it by the\nmunicipality and have prior to their initial occupancy in such\naccommodations resided in emergency shelter facilities operated by or on\nbehalf of the municipality, the agency may provide that the note and\nmortgage shall automatically be reduced to zero in five equal annual\ndecrements commencing on the tenth year after the initial occupancy\ndate, provided that such accommodations have been owned and operated in\na manner consistent with an agreement with the municipality contained in\nsuch note and mortgage to provide housing for such persons.\n 3. The bond or note issued by the owner of such multiple dwelling and\nthe mortgage relating thereto may authorize such owner, with the consent\nof the agency, to prepay the principal of the loan subject to such terms\nand conditions as therein provided. Such bond or note and mortgage may\ncontain such other clauses and provisions as the agency shall require.\n 4. The agency may charge the owner of such multiple dwelling\nreasonable fees for financing, regulation, supervision and audit. Such\nfees shall be kept by the municipality in a separate fund to be known as\nthe housing rehabilitation fund and shall be used to pay for the\nexpenses of the municipality in administering and carrying out the\nprovisions of this article.\n 5. Whenever reference is made in this article to a municipal loan, a\nloan by a municipality, a loan from a municipality, a contract for a\nloan between a municipality and an owner, or any similar term, with\nrespect to the territorial limits of the city of New York such terms\nshall be construed to refer to a loan made or to be made either by such\nmunicipality or by the New York city housing development corporation,\nwhichever is applicable.\n 6. The bond and mortgage or note and mortgage issued by the owner of\nany such multiple dwelling may provide that the loan shall be reduced to\nzero commencing on the fifteenth year after the execution of the bond\nand mortgage or note and mortgage, provided that, as of the date of any\nsuch reduction, the multiple dwelling has been and continues to be owned\nand operated in a manner consistent with a regulatory agreement with the\nmunicipality. Notwithstanding such provision as contained in the bond\nand mortgage or note and mortgage, the loan shall be reduced to zero\nonly if, prior to or simultaneously with delivery of such bond and\nmortgage or note and mortgage, the agency made a written determination\nthat such reduction would be necessary to ensure the continued\naffordability or economic viability of the multiple dwelling. Such\nwritten determination shall document the basis upon which the loan was\ndetermined to be eligible for evaporation.\n