S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10517
 
                           I N  A S S E M B L Y
 
                               May 31, 2022
                                ___________
 
 Introduced  by COMMITTEE ON RULES -- (at request of M. of A. Woerner) --
   read once and referred to the Committee on Housing
 
 AN ACT to amend the private housing finance law, in relation  to  estab-
   lishing the small rental housing development initiative
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. The private housing finance law is amended by adding a  new
 article 17-C to read as follows:
                              ARTICLE XVII-C
                SMALL RENTAL HOUSING DEVELOPMENT INITIATIVE
 SECTION 1060. LEGISLATIVE FINDINGS AND STATEMENT OF POLICY.
         1061. DEFINITIONS.
         1062. SMALL RENTAL HOUSING DEVELOPMENT INITIATIVE.
   §  1060. LEGISLATIVE FINDINGS AND STATEMENT OF POLICY. THE LEGISLATURE
 HEREBY FINDS AND DECLARES THAT THERE EXISTS IN MANY RURAL AREAS  OF  THE
 STATE A SUBSTANTIAL NEED FOR AFFORDABLE RENTAL HOUSING OF A SIZE THAT IS
 SUITABLE  TO SMALL COMMUNITIES WITH LIMITED INFRASTRUCTURE. THE FINDINGS
 SET FORTH IN ARTICLE SEVENTEEN OF THIS  CHAPTER,  WITH  RESPECT  TO  THE
 SPECIAL  NEEDS  AND PROBLEMS OF SUCH AREAS AND THE SIGNIFICANT POTENTIAL
 ROLE OF LOCALLY BASED NOT-FOR-PROFIT ORGANIZATIONS IN  HELPING  TO  MEET
 SUCH  NEEDS,  ARE  HEREBY  REAFFIRMED. THE LEGISLATURE HEREBY DETERMINES
 THAT, IN ADDITION TO THE PROGRAM OF  STATE  SUPPORT  TO  HELP  MEET  THE
 ADMINISTRATIVE EXPENSES OF SUCH ORGANIZATIONS UNDER ARTICLE SEVENTEEN OF
 THIS  CHAPTER,  A  FURTHER  PUBLIC NEED EXISTS FOR STATE FUNDING FOR THE
 DEVELOPMENT OF AFFORDABLE RENTAL HOUSING OF TWENTY UNITS OR LESS.  IT IS
 THE PURPOSE OF THIS ARTICLE TO ENCOURAGE THE CONSTRUCTION OF  AFFORDABLE
 RENTAL  HOUSING  IN THE RURAL AREAS OF THE STATE BY ESTABLISHING A DEDI-
 CATED PROGRAM OF SUCH FUNDING.
   § 1061. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE,  THE  FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "SMALL  RENTAL  HOUSING DEVELOPMENTS" SHALL MEAN AFFORDABLE RENTAL
 APARTMENT BUILDINGS OF TWENTY UNITS OR LESS FOR LOW TO  MODERATE  INCOME
 HOUSEHOLDS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD15909-04-2
              

 A. 10517                            2
 
   2.  "ELIGIBLE  AREA"  SHALL  MEAN  A TOWN OR CITY WITH A POPULATION OF
 THIRTY THOUSAND OR LESS.
   3. "ELIGIBLE APPLICANT" SHALL MEAN A NON-PROFIT HOUSING AGENCY SUCH AS
 A RURAL PRESERVATION OR NEIGHBORHOOD COMPANY OR OTHER SIMILAR NON-PROFIT
 ENTITY CHARTERED BY THE STATE.
   4.  "LOW  TO MODERATE-INCOME HOUSEHOLD" SHALL MEAN A HOUSEHOLD WITH UP
 TO ONE HUNDRED TWENTY PERCENT OF AREA MEDIAN INCOME.
   5. "PERIOD OF AFFORDABILITY" SHALL MEAN THE REQUIRED LENGTH OF TIME  A
 PROJECT   MUST  MEET  AFFORDABILITY  REQUIREMENTS  PURSUANT  TO  24  CFR
 92.254(E) AND TO BE SPECIFIED IN THE PROJECT NOTE AND MORTGAGE.
   § 1062. SMALL RENTAL HOUSING  DEVELOPMENT  INITIATIVE.  1.  APPLICANTS
 CONSTRUCTING  SMALL  RENTAL HOUSING DEVELOPMENTS IN ELIGIBLE AREAS SHALL
 BE ELIGIBLE FOR STATE FUNDING IN THE FORM  OF  DEFERRED  LOANS  AT  ZERO
 PERCENT  INTEREST  LOANS,  DUE  ON SALE. SUCH ZERO INTEREST LOANS MAY BE
 SUBJECT TO FORGIVENESS IN ACCORDANCE WITH THE PROVISIONS OF  SUBDIVISION
 TWO OF THIS SECTION.
   (A) THE ELIGIBLE APPLICANT SHALL CHOOSE A PAYBACK PERIOD FOR SUCH LOAN
 OF BETWEEN TEN AND TWENTY YEARS.
   (B)  THE  MAXIMUM  PER-UNIT SUBSIDY SHALL BE DETERMINED BY THE COMMIS-
 SIONER.
   (C) FUNDS SHALL BE USED FOR THE CONSTRUCTION OF RESIDENTIAL UNITS  AND
 MAY BE USED FOR THE CONSTRUCTION OF COMMUNITY ROOMS OR COMMON AREAS USED
 FOR THE BENEFIT OF RESIDENTS.
   2.   (A) ZERO INTEREST LOANS ISSUED IN ACCORDANCE WITH SUBDIVISION ONE
 OF THIS SECTION SHALL BE DEFERRED FOR THE PERIOD  OF  AFFORDABILITY.  IF
 THE  ELIGIBLE  APPLICANT,  WHO IS THE RECIPIENT OF A ZERO INTEREST LOAN,
 REMAINS IN COMPLIANCE WITH ALL PROGRAM REQUIREMENTS FOR THE ENTIRETY  OF
 THE  PERIOD OF AFFORDABILITY, THE ZERO INTEREST LOAN MAY BE FORGIVEN AND
 THE MORTGAGE LIEN PLACED AGAINST THE PROPERTY MAY BE SATISFIED.
   (B) IF THE PROPERTY OF AN ELIGIBLE APPLICANT IS SOLD DURING THE PERIOD
 OF AFFORDABILITY, THE SUM OF ANY OUTSTANDING MORTGAGE MUST  BE  RE-PAID.
 THE  MORTGAGE LIEN MAY BE ASSUMED BY A NEW PURCHASER ONLY IF APPROVED BY
 THE HOUSING  TRUST  FUND  CORPORATION,  SUBJECT  TO  ANY  CONDITIONS  OR
 REQUIREMENTS SET BY THE HOUSING TRUST FUND CORPORATION.
   (C)  THE  RENTAL  MANAGEMENT  REQUIREMENTS OF THE SMALL RENTAL HOUSING
 INITIATIVE SHALL RUN WITH THE PROPERTY THROUGHOUT THE  ENTIRETY  OF  THE
 PERIOD OF AFFORDABILITY, REGARDLESS OF ANY CHANGE IN OWNERSHIP.
   (D)  AWARDS  MADE UNDER THIS PROGRAM SHALL BE PURSUANT TO A REGULATORY
 AGREEMENT, INCLUDING RENT SETTING AND ANY AND ALL RENT INCREASES  DURING
 THE AFFORDABILITY PERIOD.
   3.  THE  DIVISION  OF  HOUSING  AND COMMUNITY RENEWAL SHALL NOTIFY, IN
 WRITING, ALL APPLICANTS WHO WERE NOT SELECTED FOR FUNDING OF THE REASONS
 WHY THE PROPOSAL WAS NOT FUNDED,  INCLUDING  THE  DESIGN,  UNDERWRITING,
 LEGAL  OR PROGRAM DEFICIENCIES, DEFICIENCIES OF ANY DOCUMENTS AND/OR THE
 BASIS UPON WHICH THE APPLICATION WAS DETERMINED  TO  BE  INELIGIBLE  FOR
 FUNDING.
   4. THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE FOR THE
 REVIEW, AT PERIODIC INTERVALS NOT LESS THAN ANNUALLY, OF THE PERFORMANCE
 OF  APPLICANTS  RECEIVING GRANTS OR LOANS PURSUANT TO THIS ARTICLE. SUCH
 REVIEW SHALL, AMONG OTHER THINGS, BE FOR THE  PURPOSES  OF  ASCERTAINING
 THE  CONFORMITY  TO  AGREEMENT PROVISIONS, AND ADHERENCE TO REGULATIONS.
 AGREEMENTS ENTERED INTO PURSUANT TO THIS ARTICLE MAY BE  TERMINATED  AND
 FUNDS  MAY  BE  WITHHELD  OR  RECAPTURED  BY THE DIVISION OF HOUSING AND
 COMMUNITY RENEWAL UPON A FINDING OF SUBSTANTIAL NONPERFORMANCE OR BREACH
 BY SUCH APPLICANT UNDER ITS AGREEMENT.
 A. 10517                            3
 
   5. THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL  DEVELOP  ADDI-
 TIONAL  PROCEDURES AND REQUIREMENTS RELATED TO THE APPLICATION AND AWARD
 OF FUNDING FOR PROJECTS PURSUANT TO THIS ARTICLE AS DEEMED NECESSARY  OR
 APPROPRIATE TO IMPLEMENT THE PURPOSES AND PROVISIONS OF THIS ARTICLE.
   § 2. This act shall take effect immediately.