N.Y. Private Housing Finance Law § 472

§ 472. Loans to owner-occupants. 1. Notwithstanding the provisions of\nany general, special or local law, a municipality, acting through an\nagency, is authorized to make, or contract to make, loans to low and\nmoderate income owner-occupants of one to four unit existing private or\nmultiple dwellings within its territorial limits, subject to the\nlimitation of subdivisions two through seven of this section, in such\namounts as shall be required for the rehabilitation of such dwellings,\nprovided, however, that such loans shall not exceed sixty thousand\ndollars per dwelling unit. Such loans may also include the refinancing\nof the outstanding indebtedness of such dwellings, and the municipality\nmay make temporary loans or advances to such owner-occupants in\nanticipation of permanent loans for such purposes.\n 2. Each loan shall be evidenced by a note executed by the\nowner-occupant of the existing dwelling. Repayment of each such note\nshall be within a period of the probable life of the existing dwelling\nwhich is hereby determined to be thirty years, or such shorter period as\nthe agency shall determine. The repayment shall be made in such manner\nas may be provided in such note and contract, if any, in connection with\nsuch loan, and may authorize such owner-occupant, with the consent of\nthe agency, to prepay the principal of the loan subject to such terms\nand conditions as therein provided. In order to make any such loan\naffordable to the owner-occupant, the agency may provide in such note\nand contract that all of the outstanding principal of said loan may be\nself-liquidated over a fifteen year period of owner-occupancy. Such note\nand contract may contain such other terms and provisions not\ninconsistent with the provisions of this article as the agency may deem\nnecessary or desirable to secure repayment of the loan, the interest\nthereon, if any, and other charges in connection therewith, and to carry\nout the purposes and provisions of this article.\n 3. The agency in its discretion may require that the owner-occupant\nexecute, acknowledge and deliver a uniform commercial code financing\nstatement for the real property improvement to be in such form as the\nagency shall specify and in accordance with the requirements of section\n9--502 of the uniform commercial code of the state of New York. Said\nfinancing statement shall be filed or recorded without charge in\naccordance with the provisions of paragraph one of subsection (a) of\nsection 9--501 of the uniform commercial code, and from the date of such\nfiling the municipality shall have a lien against said real property\nimprovement for the amount advanced or so much thereof as remains unpaid\ntogether with the interest thereon. Upon payment of all sums advanced by\nthe municipality and interest thereon, and upon demand of the then\nrecord owner of the real property, the agency shall deliver a copy of\nthe financing statement with an endorsement thereon that the lien is\nsatisfied. Upon filing of such copy in the office where the financing\nstatement was filed and upon payment of the proper fee therefor, the\nlien of such financing statement shall be discharged.\n 4. The agency may require the owner-occupant to execute a mortgage as\nsecurity for a loan in lieu of or in addition to a financing statement\nas provided in subdivision three of this section. Such mortgage shall\ncontain such terms and provisions not inconsistent with the provisions\nof this article as the agency shall deem necessary or desirable to\nsecure repayment of the loan.\n 5. Loans may be made with respect to a one to four unit private or\nmultiple dwelling encumbered by mortgages, provided no mortgage is in\ndefault, except if such default shall be remedied by the proposed\nrehabilitation or improvement.\n 6. The agency may charge the owner-occupant of such existing private\nor multiple dwelling reasonable fees for administration, financing,\nregulation, supervision and audit.\n 7. In making a loan under this article, an agency shall have the power\nto participate in a loan made by any private investor, provided that the\nportion of the loan funded by the agency shall not exceed an amount\nequal to seventy-five percent of the total loan. The agency may enter\ninto an agreement with a private investor to deposit funds with such\nprivate investor to cover the agency's participation in loans to\nowner-occupants of one to four unit existing private and multiple\ndwellings with such funds advanced by such private investor to\nowner-occupants of existing dwellings. The portion of the loan funded by\nthe agency may be equal to or subordinate in lien to the portion of the\nloan funded by the private investor and the note and contract may\ncontain such terms with respect to interest rate, if any, and time of\npayment of principal and interest as determined by the agency. The\nagency may make provision, either in the mortgage or mortgages or by\nseparate agreement, for the performance by the private investor of such\nservices as are generally performed by a banking institution which\nitself holds a mortgage, including, without limitation, construction\nloan advances, construction supervision, initiation of foreclosure\nproceedings, procurement of insurance, and all other matters in\nconnection with the financing, supervision, regulation and audit of any\nsuch loan. In order to make the loan affordable to the owner-occupant,\nthe agency may provide an interest reduction subsidy pursuant to section\nfour hundred seventy-five of this article, or may provide that all or\npart of the agency's portion of the outstanding principal of any such\nparticipation loan may be self-liquidated over a fifteen year period of\nowner-occupancy.\n