S T A T E O F N E W Y O R K
________________________________________________________________________
5790
2017-2018 Regular Sessions
I N A S S E M B L Y
February 15, 2017
___________
Introduced by M. of A. CYMBROWITZ -- read once and referred to the
Committee on Housing
AN ACT to amend the public housing law, in relation to creating a home
ownership assistance program
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The public housing law is amended by adding a new article 9
to read as follows:
ARTICLE IX
HOME OWNERSHIP ASSISTANCE PROGRAM
SECTION 170. DEFINITIONS.
171. HOME OWNERSHIP ASSISTANCE PROGRAM.
172. APPLICABILITY OF THE PROGRAM.
173. AMOUNT AND PROCEDURE FOR HOME OWNERSHIP ASSISTANCE
PAYMENTS.
174. TERMS OF ASSISTANCE FOR NOT-FOR-PROFIT ORGANIZATIONS.
175. RULES AND REGULATIONS.
176. FUNDING FOR THE HOME OWNERSHIP ASSISTANCE PROGRAM.
§ 170. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
1. "DEPARTMENT" SHALL MEAN THE NEW YORK CITY DEPARTMENT OF HOUSING
PRESERVATION AND DEVELOPMENT.
2. "ELIGIBLE UNIT" SHALL MEAN:
A. ANY (I) HOME WITH FOUR OR LESS UNITS; (II) CONDOMINIUM; OR (III)
COOPERATIVE;
B. WHERE THE PURCHASE OF SUCH HOME, CONDOMINIUM, OR COOPERATIVE IS
PROVIDED FOR, INSURED, OR GUARANTEED BY THE STATE OR FEDERAL GOVERNMENT.
3. "QUALIFIED HOUSEHOLD" SHALL MEAN ANY PERSON OR HIS OR HER FAMILY
MEMBER WHO:
A. (I) HAS AN ANNUAL HOUSEHOLD INCOME UNDER EIGHTY PERCENT OF THE
MEDIAN POVERTY LEVEL, PROVIDED, THAT ANY ASSISTANCE RECEIVED AS A RESULT
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09717-01-7
A. 5790 2
OF A SOCIAL PROGRAM SHALL NOT BE CONSIDERED WHEN CALCULATING AN INDIVID-
UAL'S GROSS INCOME. THE DEPARTMENT SHALL DETERMINE INCOME ELIGIBILITY
OF HOME BUYERS USING THE INCOME DETERMINATION METHODOLOGY UTILIZED BY
THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT IN ACCORD-
ANCE WITH THEIR SECTION 8 HOUSING PROGRAM; OR
(II) IS OVER THE AGE OF SIXTY-FIVE; OR
(III) IS DIAGNOSED BY A LICENSED PHYSICIAN TO BE MENTALLY OR PHYS-
ICALLY DISABLED;
B. DOES NOT CURRENTLY OWN A HOUSING UNIT IN THE CITY OF NEW YORK OR
ANY OTHER LOCATION, INCLUDING A SINGLE FAMILY HOUSE, CONDOMINIUM UNIT,
COOPERATIVE UNIT, OR RENTAL UNIT THAT COULD BE OWNER OCCUPIED;
C. HAS NOT PREVIOUSLY RECEIVED HOME OWNERSHIP ASSISTANCE PAYMENTS
PURSUANT TO THIS ARTICLE; AND
D. IS CURRENTLY EMPLOYED AND HAS BEEN GAINFULLY EMPLOYED FOR AT LEAST
TWELVE MONTHS PRIOR TO HIS OR HER APPLICATION FOR HOME OWNERSHIP ASSIST-
ANCE PAYMENTS, EXCEPT THAT THIS PARAGRAPH SHALL NOT APPLY TO AN INDIVID-
UAL WHO QUALIFIES PURSUANT TO SUBPARAGRAPH (II) OR (III) OF PARAGRAPH A
OF THIS SUBDIVISION.
4. "QUALIFIED NOT-FOR-PROFIT ORGANIZATION" SHALL MEAN AN ORGANIZATION
THAT IS TAX EXEMPT PURSUANT TO SUBSECTION (C) OF SECTION 501 OF THE
INTERNAL REVENUE CODE AND WHOSE PURPOSE IS TO ASSIST HOUSEHOLDS, WHOSE
INCOME IS UNDER EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL, WITH
PURCHASING A HOME. SUCH ORGANIZATION MUST SHOW EXPERIENCE AND CAPACITY
TO UNDERTAKE A PURCHASE FOR REHABILITATION AND TO RESELL TO QUALIFIED
HOUSEHOLDS AS DEFINED IN SUBDIVISION THREE OF THIS SECTION.
§ 171. HOME OWNERSHIP ASSISTANCE PROGRAM. 1. THERE IS HEREBY ESTAB-
LISHED A HOME OWNERSHIP ASSISTANCE PROGRAM. THE PURPOSE OF THE PROGRAM
IS TO PROVIDE FINANCIAL ASSISTANCE TO LOW INCOME HOUSEHOLDS, WITH ANNUAL
INCOMES UNDER EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL WHO DO NOT
CURRENTLY OWN A HOME, TO PURCHASE AN ELIGIBLE UNIT FOR PURPOSES OF REHA-
BILITATION AND OWNERSHIP.
2. THE MAXIMUM PURCHASE PRICE SHALL BE THE SINGLE FAMILY MORTGAGE
LIMITS DEFINED UNDER 24 C.F.R. 203 AND SHALL BE ADJUSTED ACCORDING TO
THE ADJUSTMENTS MADE BY THE UNITED STATES DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT.
3. THE UNIT MAY NOT BE "OVERCROWDED" AS DEFINED IN THE HOUSING QUALITY
STANDARDS, WHICH ARE ISSUED BY THE UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT. A SUFFICIENT NUMBER OF BEDROOMS ARE REQUIRED TO
PROVIDE ADEQUATE SLEEPING SPACE FOR ALL MEMBERS OF THE HOUSEHOLD. THERE
MUST BE ONE BEDROOM FOR EVERY TWO MEMBERS OF THE FAMILY, PROVIDED THAT
CHILDREN OF THE OPPOSITE SEX MAY NOT SHARE A BEDROOM.
4. MONTHLY HOME OWNERSHIP EXPENSES SHALL INCLUDE INTEREST ON THE MORT-
GAGE, MORTGAGE INSURANCE PREMIUMS, REAL ESTATE TAXES, HOME OWNERSHIP
INSURANCE, AND MAJOR REPAIRS AND REPLACEMENTS. HOUSING EXPENSES AFTER
THE PURCHASE AND REHABILITATION OF A HOME MAY NOT EXCEED THIRTY PERCENT
OF THE HOUSEHOLD'S GROSS MONTHLY INCOME.
§ 172. APPLICABILITY OF THE PROGRAM. 1. A QUALIFIED HOUSEHOLD MUST
MAKE AN APPLICATION TO THE DEPARTMENT TO RECEIVE HOME OWNERSHIP ASSIST-
ANCE PAYMENTS.
2. THE DEPARTMENT SHALL APPROVE AN INDIVIDUAL'S APPLICATION IF IT
FINDS THAT:
A. SUCH INDIVIDUAL IS PART OF A QUALIFIED HOUSEHOLD AS DEFINED IN
SUBDIVISION THREE OF SECTION ONE HUNDRED SEVENTY OF THIS ARTICLE;
B. THE HOME TO BE PURCHASED BY THE INDIVIDUAL IS AN ELIGIBLE UNIT AS
DEFINED IN SUBDIVISION TWO OF SECTION ONE HUNDRED SEVENTY OF THIS ARTI-
CLE;
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C. THE HOME TO BE PURCHASED HAS BEEN INSPECTED BY A DEPARTMENT
APPROVED HOME INSPECTOR;
D. THE HOME TO BE PURCHASED HAS BEEN APPRAISED AT A VALUE NEAR OR
ABOVE THE MAXIMUM PURCHASE PRICE AS DEFINED IN SUBDIVISION TWO OF
SECTION ONE HUNDRED SEVENTY-ONE OF THIS ARTICLE. IF THE PURCHASE PRICE
EXCEEDS THE MAXIMUM PURCHASE PRICE, THE ELIGIBLE HOUSEHOLD MUST PAY THE
DIFFERENCE. THE ELIGIBLE HOUSEHOLD MUST GIVE THE FUNDS TO THE DEPARTMENT
AT THE CLOSING. THE DEPARTMENT WILL HOLD THE FUNDS IN AN INTEREST BEAR-
ING ESCROW ACCOUNT AND MAKE PAYMENTS FROM SUCH ACCOUNT AS NECESSARY. ALL
ELIGIBLE HOUSEHOLD FUNDS MUST BE EXPENDED BEFORE ANY HOME OWNERSHIP
ASSISTANCE PROGRAM PAYMENTS MAY BE MADE.
3. UPON APPROVAL OF THE INDIVIDUAL'S APPLICATION, THE INDIVIDUAL MUST
ATTEND HOME OWNERSHIP ASSISTANCE COUNSELING. SUCH COUNSELING SHALL
INCLUDE, BUT NEED NOT BE LIMITED TO:
A. HOME MAINTENANCE;
B. BUDGETING AND MONEY MANAGEMENT;
C. CREDIT COUNSELING; AND
D. HOW TO OBTAIN HOME OWNERSHIP FINANCING, INCLUDING HOW TO IDENTIFY
AND AVOID LOANS WITH OPPRESSIVE TERMS AND CONDITIONS.
4. UPON COMPLETION OF THE HOME OWNERSHIP COUNSELING PURSUANT TO SUBDI-
VISION THREE OF THIS SECTION, THE DEPARTMENT SHALL MAKE HOME OWNERSHIP
ASSISTANCE PAYMENTS IN ACCORDANCE WITH SECTION ONE HUNDRED SEVENTY-THREE
OF THIS ARTICLE.
5. THE REFINANCING OF A HOME THAT IS A BASIS FOR RECEIVING HOME OWNER-
SHIP ASSISTANCE PAYMENTS SHALL AUTOMATICALLY CAUSE SUCH PAYMENTS TO
CEASE AND BE TERMINATED.
6. IF ANY QUALIFIED HOUSEHOLD THAT HAS BEEN APPROVED AND IS RECEIVING
HOME OWNERSHIP ASSISTANCE PAYMENTS DEFAULTS ON ITS MORTGAGE PAYMENT,
SUCH HOME OWNERSHIP ASSISTANCE PAYMENTS SHALL AUTOMATICALLY CEASE AND BE
TERMINATED.
§ 173. AMOUNT AND PROCEDURE FOR HOME OWNERSHIP ASSISTANCE PAYMENTS.
1. THE MAXIMUM FINANCIAL ASSISTANCE UNDER THE HOME OWNERSHIP ASSISTANCE
PROGRAM FOR ELIGIBLE HOUSEHOLDS SHALL NOT EXCEED THE TOTAL COST OF
ACQUISITION AND REHABILITATION. THE ASSISTANCE PROVIDED FOR THE PURCHASE
OF THE PROPERTY SHALL BE A PRORATED LOAN. THE DEPARTMENT WILL PLACE A
MORTGAGE ON THE PROPERTY TO SECURE THE LOAN. THE MORTGAGEE MAY BE SUBOR-
DINATED TO ANY OTHER MORTGAGEE APPROVED BY THE DEPARTMENT THAT IS PRES-
ENTLY ON OR THAT MAY BE PLACED ON THE PROPERTY.
THE DEPARTMENT SHALL HAVE THE RIGHT TO DETERMINE WHETHER OR NOT AN
IMPROVEMENT QUALIFIES AS CAPITAL IMPROVEMENTS. PRIOR TO THE COMMENCEMENT
OF CAPITAL IMPROVEMENTS, THE PROPERTY OWNER MUST NOTIFY THE DEPARTMENT
AND PROVIDE A COST ESTIMATE. THE DEPARTMENT SHALL HAVE THE RIGHT TO
INSPECT THE PROPERTY PRIOR TO AND UPON COMPLETION OF CONSTRUCTION. THE
PROPERTY OWNER MUST PROVIDE DOCUMENTATION OF ALL WORK PERFORMED.
2. THE MAXIMUM ASSISTANCE FOR QUALIFIED NOT-FOR-PROFIT ORGANIZATIONS,
AS DEFINED IN SUBDIVISION FOUR OF SECTION ONE HUNDRED SEVENTY OF THIS
ARTICLE, MAY NOT EXCEED TWENTY THOUSAND DOLLARS PER BUILDING.
3. THE PROPERTY MAY BE SOLD SUBJECT TO THE FOLLOWING CONDITIONS:
A. THE MAXIMUM SALE PRICE WILL BE DETERMINED BY THE FOLLOWING FORMULA:
THE ORIGINAL SUBSIDIZED PRICE OF THE HOME MULTIPLIED BY A FRACTION WHERE
THE NUMERATOR IS THE MEDIAN INCOME FOR A FAMILY OF FOUR IN NEW YORK CITY
IN THE YEAR OF THE RESALE AND THE DENOMINATOR IS THE CORRESPONDING
FIGURE FOR THE YEAR THE PROPERTY WAS PURCHASED. BOTH NUMBERS SHALL BE
DETERMINED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOP-
MENT.
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B. THE OWNER'S DOWN PAYMENT AND THE VALUE OF QUALIFYING CAPITAL
IMPROVEMENTS MAY BE ADDED TO THE MAXIMUM RESALE PRICE. QUALIFYING
IMPROVEMENTS ARE THOSE DEFINED AND APPLIED BY THE NEW YORK STATE DEPART-
MENT OF TAXATION AND FINANCE THAT DO NOT CONSTITUTE UNAFFORDABLE LUXU-
RIES DEFINED AS ITEMS NOT NORMALLY CONSIDERED A NECESSARY OR CUSTOMARY
PART OF A RESIDENCE IN THE SURROUNDING NEIGHBORHOOD. THE DEPARTMENT
SHALL HAVE THE RIGHT TO DETERMINE WHETHER OR NOT AN IMPROVEMENT QUALI-
FIES AS CAPITAL IMPROVEMENTS. PRIOR TO THE COMMENCEMENT OF CAPITAL
IMPROVEMENTS, THE PROPERTY OWNER MUST NOTIFY THE DEPARTMENT AND PROVIDE
A COST ESTIMATE. THE DEPARTMENT SHALL HAVE THE RIGHT TO INSPECT THE
PROPERTY PRIOR TO AND UPON COMPLETION OF CONSTRUCTION. THE PROPERTY
OWNER MUST PROVIDE DOCUMENTATION OF ALL WORK PERFORMED.
§ 174. TERMS OF ASSISTANCE FOR NOT-FOR-PROFIT ORGANIZATIONS. FINANCIAL
ASSISTANCE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-THREE OF THIS ARTI-
CLE MAY BE PROVIDED TO NOT-FOR-PROFIT ORGANIZATIONS FOR THE PURPOSE OF
RESALE TO QUALIFIED HOUSEHOLDS AS DEFINED IN SUBDIVISION THREE OF
SECTION ONE HUNDRED SEVENTY OF THIS ARTICLE.
1. THE NOT-FOR-PROFIT ORGANIZATION MAY MANAGE THE PROPERTY DURING AN
INTERIM PERIOD UNDER A "LEASE TO OWN" PROGRAM BEFORE TRANSFERRING TITLE
TO THE PROPERTY AND MUST SUBMIT COMPLETE DEVELOPMENT AND OPERATING BUDG-
ETS FOR THE INTERIM TO THE DEPARTMENT.
A. AN ELIGIBLE "LEASE TO OWN" PURCHASER MUST BE LOCATED WITHIN TWELVE
MONTHS FROM PURCHASE BY THE NOT-FOR-PROFIT ORGANIZATION.
B. THE INITIAL OCCUPANT OF THE OWNER'S UNIT, WHETHER A TENANT DURING A
RENTAL AGREEMENT, TENANT DURING A LEASE TO OWN PERIOD, OR HOME BUYER,
MUST QUALIFY AS AN ELIGIBLE HOUSEHOLD. FIFTY-ONE PERCENT OF THE UNITS
MUST BE OCCUPIED AT INITIAL OCCUPANCY BY HOUSEHOLDS WHOSE HOUSEHOLD
INCOME IS LESS THAN EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL.
C. RENT, INCLUDING UTILITIES, FOR A HOUSEHOLD WHERE THE HOUSEHOLD
INCOME IS BETWEEN FIFTY AND EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL
CANNOT EXCEED THIRTY PERCENT OF THE HOUSEHOLD MONTHLY INCOME. IF TENANTS
PAY UTILITIES, THE RENT SHALL BE ADJUSTED BY THE AMOUNT OF THE UTILI-
TIES.
D. NOT-FOR-PROFIT ORGANIZATIONS MUST SUBMIT A PROPOSED RESALE PROCESS
OR FORMULA FOR DEPARTMENTAL REVIEW AND APPROVAL.
E. IN ALL CASES, TRANSFER OF TITLE TO THE PROPERTY FROM THE NOT-FOR-
PROFIT ORGANIZATION TO AN ELIGIBLE HOUSEHOLD MUST TAKE PLACE WITHIN FIVE
YEARS FROM PURCHASE BY THE NOT-FOR-PROFIT ORGANIZATION.
F. IF THE NOT-FOR-PROFIT ORGANIZATION FAILS TO MEET THESE DEADLINES,
THE DEFERRED LOAN SHALL BE DUE AND PAYABLE WITH ACCRUED INTEREST AT A
RATE OF FOUR PERCENT.
§ 175. RULES AND REGULATIONS. 1. THE DEPARTMENT IS AUTHORIZED TO
IMPLEMENT ANY RULE OR REGULATION NECESSARY FOR THE SUCCESSFUL IMPLEMEN-
TATION OF THIS PROGRAM.
2. THE DEPARTMENT MAY CREATE ANY FORM AND REQUIRE ANY APPLICANT TO
FILL OUT SUCH FORM BEFORE RECEIVING DEPARTMENTAL APPROVAL FOR THE HOME
OWNERSHIP ASSISTANCE PAYMENTS.
3. THE DEPARTMENT MAY CHARGE AN APPLICATION FEE FOR THE PROCESSING OF
A HOUSEHOLD'S HOME OWNERSHIP ASSISTANCE PAYMENT APPLICATION. SUCH FEE
SHALL NOT EXCEED ONE HUNDRED DOLLARS.
§ 176. FUNDING FOR THE HOME OWNERSHIP ASSISTANCE PROGRAM. FUNDING
SHALL BE OBTAINED BY USING FUNDS FROM THE COMMUNITY DEVELOPMENT BLOCK
GRANT AND THE NEW YORK STATE HOME PROGRAM. TWO PERCENT OF THE TOTAL
AMOUNT OF EACH, RESPECTIVELY, SHALL BE USED TO FUND THE HOME OWNERSHIP
ASSISTANCE PROGRAM.
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§ 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal of any rule or regulation
necessary for the timely implementation of this act on its effective
date is hereby authorized and directed to be made on or before such
effective date.