S T A T E O F N E W Y O R K
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7185
2021-2022 Regular Sessions
I N S E N A T E
June 4, 2021
___________
Introduced by Sen. MAY -- (at request of the New York State Homes and
Community Renewal) -- read twice and ordered printed, and when printed
to be committed to the Committee on Rules
AN ACT to amend the public authorities law, in relation to the
construction of modular and manufactured housing
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 2401 of the public authorities law is amended by
adding a new undesignated paragraph to read as follows:
IT IS FURTHER FOUND AND DETERMINED THAT THERE IS A SHORTAGE OF
ADEQUATE FUNDS TO ASSIST IN THE NEW CONSTRUCTION OF MODULAR AND MANUFAC-
TURED HOUSING.
§ 2. Subdivisions 2, 5, and 12 of section 2402 of the public authori-
ties law, subdivision 2 as amended by chapter 806 of the laws of 1990,
subdivision 5 as amended by chapter 151 of the laws of 2013, and subdi-
vision 12 as added by chapter 915 of the laws of 1982, are amended to
read as follows:
(2) "Bank". Any bank or trust company, savings bank, savings and loan
association, industrial bank, credit union, national banking associ-
ation, federal savings and loan association, federal savings bank or
federal credit union which is located in the state. The term "bank"
shall also include a New York state licensed mortgage banker, or a
domestic not-for-profit corporation whose public purposes include
combatting community deterioration and which is an exempt organization
as defined in paragraph (e) of subdivision one of section five hundred
ninety of the banking law, or an entity exempt from licensing provisions
in accordance with paragraph (a) of subdivision two of SUCH section
[five hundred ninety of such law], which in any such case is approved as
a mortgage lender by the Federal National Mortgage Association or by the
Federal Home Loan Mortgage Corporation, OR DOMESTIC NOT-FOR-PROFIT
CORPORATIONS THAT ARE CERTIFIED BY THE UNITED STATES DEPARTMENT OF TREA-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11153-01-1
S. 7185 2
SURY AS COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS OR LICENSED BY THE
NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES.
(5) "Mortgage". A loan owed to a bank secured by a first lien on a fee
simple or leasehold estate in real property located in the state and
improved by a residential structure OR, ON WHICH A RESIDENTIAL STRUCTURE
FOR USE AS SINGLE-FAMILY MODULAR OR MANUFACTURED HOUSING PURCHASED AND
SITED ON LAND SHALL BE CONSTRUCTED USING THE PROCEEDS OF SUCH LOAN,
whether or not insured or guaranteed by the United States of America or
any agency thereof. The term "mortgage" shall also include a loan owed
to a bank secured by a second lien on a fee simple or leasehold estate
in real property located in the state and improved by a residential
structure OR ON WHICH A RESIDENTIAL STRUCTURE FOR USE AS SINGLE-FAMILY
MODULAR OR MANUFACTURED HOUSING PURCHASED AND SITED ON LAND SHALL BE
CONSTRUCTED USING THE PROCEEDS OF THE RELATED LOAN DESCRIBED IN PARA-
GRAPH (A) OR (B) OF THIS SUBDIVISION, whether or not insured or guaran-
teed by the United States of America or any agency thereof, provided,
however, that such second lien: (a) secures a loan purchased by the
agency, and (b) is made at the same time as a first lien securing a loan
purchased by the agency pursuant to its programs or by a government
sponsored enterprise or is made at the same time as a new housing loan
purchased by the agency pursuant to section twenty-four hundred five-c
of this part. The term "mortgage" shall also include loans made by the
agency and secured by a second lien on a fee simple or leasehold estate
in real property located in the state and improved by a residential
structure OR ON WHICH A RESIDENTIAL STRUCTURE FOR USE AS SINGLE-FAMILY
MODULAR OR MANUFACTURED HOUSING PURCHASED AND SITED ON LAND SHALL BE
CONSTRUCTED USING THE PROCEEDS OF SUCH LOAN, whether or not insured or
guaranteed by the United States of America or any agency thereof,
provided however, that the loan made by the agency and secured by such
second lien is made at the same time as a first lien securing a mortgage
loan purchased by the agency pursuant to its programs or by a government
sponsored enterprise. In the case of any second lien purchased or made
hereunder, the mortgagor shall be obligated to contribute from his or
her own verifiable funds an amount not less than such percentage as the
agency shall determine, of the lower of the purchase price or appraised
value of the property subject to the first lien. "Real property" as used
in this subdivision shall include air rights.
For the purposes of this title and of [section one hundred ninety and
subsection (a) of section one thousand four hundred fifty-six] SECTION
ONE HUNDRED EIGHTY-SEVEN of the tax law, "mortgage" shall include hous-
ing loans as defined below. Except for the purposes of subdivision seven
of section [two thousand four] TWENTY-FOUR hundred five and subdivision
eight of section two thousand four hundred five-b of this part, "mort-
gage" shall also include a loan owed to a bank by an individual borrower
incurred for the purpose of financing the purchase of certificates of
stock or other evidence of ownership of an interest in, and a proprie-
tary lease from, a cooperative housing corporation formed for the
purpose of the cooperative ownership of residential real estate in the
state, secured by an assignment or transfer of the benefits of such
cooperative ownership, and containing such terms and conditions as the
agency may approve.
(12) "Forward commitment mortgage". A mortgage, WHICH INCLUDES
CONSTRUCTION LOANS FOR SINGLE-FAMILY MODULAR OR MANUFACTURED HOUSING
PURCHASED AND SITED ON LAND, for which a commitment to advance funds is
made not earlier than the date the agency issues an invitation to
purchase mortgages or such later date as specified in the invitation. A
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mortgage made in satisfaction of the obligation of a bank under section
twenty-four hundred five of this [title] PART is not a forward commit-
ment mortgage.
§ 3. Subdivisions 7 and 14 of section 2404 of the public authorities
law, subdivision 7 as amended by chapter 782 of the laws of 1992, and
subdivision 14 as added by chapter 612 of the laws of 1970, are amended
to read as follows:
(7) To (a) acquire, and contract to acquire, existing mortgages owned
by banks and to enter into advance commitments to banks for the purchase
of said mortgages, all subject to the provisions of section [two thou-
sand four] TWENTY-FOUR hundred five of this [title] PART, (b) acquire,
and contract to acquire, forward commitment mortgages made by banks and
to enter into advance commitments to banks for the purchase of said
mortgages, all subject to the provisions of section [two thousand four]
TWENTY-FOUR hundred five-b of this [title] PART, (c) acquire, and
contract to acquire, new housing loans made by banks and to enter into
advance commitments to banks for the purchase of said housing loans, all
subject to the provisions of section [two thousand four] TWENTY-FOUR
hundred five-c of this [title] PART, [and] (d) to acquire and contract
to acquire mortgages pursuant to section twenty-four hundred five-d of
this title, AND (E) ACQUIRE, AND CONTRACT TO ACQUIRE, NEW CONSTRUCTION
MORTGAGE LOANS FOR SINGLE-FAMILY MODULAR OR MANUFACTURED HOUSING
PURCHASED AND SITED ON LAND OWNED BY BANKS AND TO ENTER INTO ADVANCE
COMMITMENTS TO BANKS FOR THE PURCHASE OF SUCH MORTGAGES, ALL SUBJECT TO
THE PROVISIONS OF SECTION TWENTY-FOUR HUNDRED FIVE-B OF THIS PART;
(14) To renegotiate, refinance or foreclose, or contract for the fore-
closure of, any mortgage in default; to waive any default or consent to
the modification of the terms of any mortgage; to commence any action to
protect or enforce any right conferred upon it by any law, mortgage,
contract or other agreement, and to bid for and purchase such property
at any foreclosure or at any other sale, or acquire or take possession
of any such property; to operate, manage, lease, dispose of, and other-
wise deal with such property, in such manner as [may be necessary to
protect the interests of the agency and the holders of its bonds and
notes] WOULD FURTHER THE PURPOSES OF THE AGENCY, SUBJECT TO ANY AGREE-
MENT WITH ITS BONDHOLDERS OR NOTEHOLDERS;
§ 4. Subdivisions 3 and 5 and paragraphs (a) and (h) of subdivision 8
of section 2405-b of the public authorities law, subdivisions 3 and 5
and paragraphs (a) and (h) of subdivision 8 as added by chapter 915 of
the laws of 1982, paragraph (h) of subdivision 8 as further amended by
section 104 of part A of chapter 62 of the laws of 2011, are amended to
read as follows:
(3) In conducting its program of purchasing forward commitment mort-
gages, the agency shall be governed by the provisions of paragraph (b)
of subdivision three of section twenty-four hundred five of this [title]
PART; HOWEVER, WITH RESPECT TO NEW CONSTRUCTION LOANS FOR SINGLE-FAMILY
MODULAR OR MANUFACTURED HOUSING PURCHASED AND SITED ON LAND, THE AGENCY
SHALL BE GOVERNED BY THE PROVISIONS OF ONLY SUBPARAGRAPH (III) OF PARA-
GRAPH (B) OF SUBDIVISION THREE OF SECTION TWENTY-FOUR HUNDRED FIVE OF
THIS PART.
(5) Notwithstanding the maximum interest rate, if any, fixed by
section 5-501 of the general obligations law or any other law not
specifically amending or applicable to this section, the agency may set
the interest rate to be borne by forward commitment mortgages purchased
by the agency from banks at a rate or rates which the agency from time
to time shall determine [to], PROVIDED HOWEVER, THAT IF SUCH MORTGAGES
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ARE FINANCED THROUGH THE ISSUANCE OF THE AGENCY'S BONDS OR NOTES, THE
INTEREST RATE SHALL be at least sufficient, together with any other
available monies, to provide for the payment of its bonds and notes, and
forward commitment mortgages bearing such interest rate shall not be
deemed to violate any such law or to be unenforceable if originated by a
bank in good faith pursuant to an undertaking with the agency with
respect to the sale thereof notwithstanding any subsequent failure of
the agency to purchase the mortgage or any subsequent sale or disposi-
tion of the mortgage by the agency to such bank or any other person.
(a) OTHER THAN WITH RESPECT TO NEW CONSTRUCTION LOANS FOR SINGLE-FAMI-
LY MODULAR OR MANUFACTURED HOUSING PURCHASED AND SITED ON LAND, the
mortgage was not made in satisfaction of an obligation of the bank under
section twenty-four hundred five of this [title] PART;
(h) the improvements to, OR NEW CONSTRUCTION OF SINGLE-FAMILY MODULAR
OR MANUFACTURED HOUSING PURCHASED AND SITED ON LAND, the mortgaged real
property are covered by a valid and subsisting policy of insurance
issued by a company authorized by the superintendent of financial
services to issue such policies in the state of New York and providing
fire and extended coverage to an amount not less than eighty percent of
the insurable value of the improvements to, OR NEW CONSTRUCTION OF, the
mortgaged real property.
§ 5. This act shall take effect immediately; provided, however, that:
a. the amendments to subdivisions 2, 5 and 12 of section 2402 of the
public authorities law made by section two of this act shall not affect
the expiration of such subdivisions and shall be deemed to expire there-
with;
b. the amendments to subdivision 7 of section 2404 of the public
authorities law made by section three of this act shall not affect the
expiration of such subdivision and shall be deemed to expire therewith;
and
c. the amendments to section 2405-b of the public authorities law made
by section four of this act shall not affect the repeal of such section
and shall be deemed repealed therewith.