S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6655--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 25, 2023
                                ___________
 
 Introduced  by  M.  of  A. L. ROSENTHAL -- read once and referred to the
   Committee on Housing -- committee discharged,  bill  amended,  ordered
   reprinted as amended and recommitted to said committee
 
 AN  ACT  to  amend the general municipal law, the local finance law, the
   private housing finance  law,  and  the  New  York  city  charter,  in
   relation to enacting the "housing affordability, resiliency, and ener-
   gy efficiency investment act of 2023"
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "housing affordability, resiliency, and energy efficiency investment
 act of 2023".
   §  2.  Paragraphs  a, c and g of subdivision 1 of section 696-a of the
 general municipal law, as amended by chapter 320 of the  laws  of  1999,
 are amended to read as follows:
   a.  Notwithstanding  the  provisions  of any general, special or local
 law, an agency is hereby authorized to make or contract to  make  grants
 or  loans to the owner of any property that is part of an urban develop-
 ment action area project for the purpose of  (i)  rehabilitation  of  an
 existing  private  or multiple dwelling OR CONSTRUCTION OF A NEW PRIVATE
 OR MULTIPLE DWELLING, (ii) providing site  improvements,  INCIDENTAL  OR
 APPURTENANT  TO  SUCH  REHABILITATION  OR  SUCH CONSTRUCTION, WITHIN THE
 URBAN DEVELOPMENT ACTION AREA IN WHICH THE URBAN DEVELOPMENT ACTION AREA
 PROJECT IS LOCATED, including, but  not  limited  to,  water  and  sewer
 facilities, sidewalks, landscaping, PARKS AND OPEN SPACE, SOCIAL, RECRE-
 ATIONAL,  COMMUNAL  AND OTHER NON-RESIDENTIAL FACILITIES AND THE OUTFIT-
 TING THEREOF, the curing of problems caused by abnormal site conditions,
 excavation and  construction  of  footings  and  foundations  and  other
 improvements  associated  with the provision of infrastructure, or (iii)
 providing for other costs of construction for the development of private
 and multiple dwelling housing accommodations.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10921-02-3
              

 A. 6655--A                          2
 
   c. Any loan made in accordance with this section shall be secured by a
 note and mortgage upon the property improved, OTHER THAN ANY SUCH  PROP-
 ERTY  TITLE  TO  WHICH  IS HELD BY THE MUNICIPALITY or, in the case of a
 condominium, a note and mortgage upon  each  of  the  [housing  accommo-
 dations] CONDOMINIUM UNITS aided by such loan, or in the case of a coop-
 erative  housing  corporation,  a  note  and  mortgage upon the economic
 interest in such corporation of each tenant-shareholder  aided  by  such
 loan,  or upon the property improved, OTHER THAN ANY SUCH PROPERTY TITLE
 TO WHICH IS HELD BY THE MUNICIPALITY, or upon both such economic  inter-
 est  or  property;  provided, however, that all or part of any such loan
 may be unsecured if necessary to satisfy the requirements of any partic-
 ipating lender, AND, PROVIDED FURTHER, THAT THE LIEN CREATED BY THE NOTE
 AND MORTGAGE MAY BE RECORDED IN AN EQUAL  OR  SUBORDINATE  POSITION,  OR
 SUBSEQUENTLY  MADE  EQUAL  OR  SUBORDINATE,  TO  A  LIEN RECORDED BY ANY
 PARTICIPATING LENDER AGAINST SUCH PROPERTY. Such loan  shall  be  repaid
 over such period as the agency shall determine.
   g.  For  purposes  of  this [section] ARTICLE, (I) the term "mortgage"
 shall include any pledge or assignment of  shares  or  assignment  of  a
 proprietary lease in a cooperative housing corporation where such pledge
 or  assignment  is  intended as security for the performance of an obli-
 gation and which imposes a lien on or affects title to  such  shares  or
 such proprietary lease; AND (II) THE TERM "OWNER" SHALL MEAN AN INDIVID-
 UAL,  PARTNERSHIP,  CORPORATION  OR OTHER ENTITY, INCLUDING A NON-PROFIT
 COMPANY, A MUTUAL COMPANY, OR A HOUSING DEVELOPMENT FUND COMPANY, HAVING
 RECORD OR BENEFICIAL TITLE IN FEE SIMPLE TO REAL PROPERTY OR THE  LESSEE
 THEREOF UNDER A LEASE HAVING A TERM OF AT LEAST FORTY-NINE YEARS.
   § 3. Section 696-a of the general municipal law, as amended by chapter
 465 of the laws of 1993, is amended to read as follows:
   § 696-a. Loans. Notwithstanding the provisions of any general, special
 or local law, an agency is hereby authorized to make or contract to make
 grants  or  loans[: (i)] to the owner of any property that is part of an
 urban development action area project for the purpose of: (I)  rehabili-
 tation  of an existing private or multiple dwelling OR CONSTRUCTION OF A
 NEW PRIVATE OR MULTIPLE DWELLING, (ii) [for the  purpose  of]  providing
 site  improvements,  INCIDENTAL OR APPURTENANT TO SUCH REHABILITATION OR
 SUCH CONSTRUCTION, WITHIN THE URBAN DEVELOPMENT ACTION AREA IN WHICH THE
 URBAN DEVELOPMENT ACTION AREA PROJECT IS  LOCATED,  including,  but  not
 limited  to,  water  and sewer facilities, sidewalks, landscaping, PARKS
 AND OPEN SPACE, SOCIAL, RECREATIONAL, COMMUNAL AND OTHER NON-RESIDENTIAL
 FACILITIES AND THE OUTFITTING THEREOF, the curing of problems caused  by
 abnormal  site  conditions,  excavation and construction of footings and
 foundations and other improvements  associated  with  the  provision  of
 infrastructure,  or (iii) [for the purpose of] providing for other costs
 of construction for the development of  private  and  multiple  dwelling
 housing  accommodations.  In the case of a grant made under this section
 for the rehabilitation of an existing multiple dwelling intended  to  be
 converted  to  a condominium or cooperative form of ownership or for the
 development of one to four unit housing accommodations or a  condominium
 or cooperative housing corporation, such grant shall require a regulato-
 ry  agreement with the agency limiting profits. Any loan made in accord-
 ance with this section shall be secured by a note and mortgage upon  the
 property  improved,  OTHER THAN ANY SUCH PROPERTY TITLE TO WHICH IS HELD
 BY THE MUNICIPALITY, or, in the case of a condominium, a note and  mort-
 gage  upon  each of the [housing accommodations] CONDOMINIUM UNITS aided
 by such loan, or in the case of a  cooperative  housing  corporation,  a
 note and mortgage upon the economic interest in such corporation of each
 A. 6655--A                          3
 
 tenant-shareholder  aided  by  such loan, or upon the property improved,
 OTHER THAN ANY SUCH PROPERTY TITLE TO WHICH IS HELD BY THE MUNICIPALITY,
 or upon both such economic interest or property; PROVIDED, HOWEVER, THAT
 ALL  OR  PART  OF ANY SUCH LOAN MAY BE UNSECURED IF NECESSARY TO SATISFY
 THE REQUIREMENTS OF ANY PARTICIPATING LENDER.  Such loan shall be repaid
 over such period as the agency shall determine. In the case  of  a  loan
 for  rehabilitation  of  an  existing  multiple  dwelling intended to be
 converted to a condominium or cooperative form of ownership  or  a  loan
 for  the provision of infrastructure or for the provision of other costs
 of construction for the development of one to four unit housing accommo-
 dations or a condominium or cooperative housing corporation,  such  note
 and mortgage may provide that the loan shall automatically be reduced to
 zero  over  a  period  of  owner-occupancy of the housing accommodations
 assisted by such loan. In the case of a grant or loan  made  under  this
 section  for  the purpose of providing rental housing for persons of low
 income as defined in section two of the  private  housing  finance  law,
 such  loan or grant shall require a regulatory agreement with the agency
 limiting profits and rentals charged. In the case of a loan  made  under
 this  section for the purpose of providing rental housing for persons of
 low income as defined in section two of the private housing finance law,
 such note and mortgage may provide that the loan shall automatically  be
 reduced to zero over a period of up to thirty years of compliance by the
 owner  with  a regulatory agreement with the agency limiting profits and
 rentals charged. The repayment of any loan made in accordance with  this
 section shall be made in such manner as may be provided in such note and
 mortgage in connection with such loan, and may authorize the owner, with
 the  consent  of the agency, to prepay the principal of the loan subject
 to such terms and conditions as therein provided. Such note and mortgage
 may contain such other terms and conditions not  inconsistent  with  the
 provisions of this article as the agency may deem necessary or desirable
 to  carrying  out the purposes and provisions of this article including,
 but not limited to, provisions concerning the repayment of the loan, the
 interest, if any, thereon, and other charges  in  connection  therewith.
 For  purposes  of  this [section] ARTICLE, (1) the term "mortgage" shall
 include any pledge or assignment of shares or assignment of  a  proprie-
 tary  lease  in  a  cooperative housing corporation where such pledge or
 assignment is intended as security for the performance of an  obligation
 and  which  imposes  a  lien  on or affects title to such shares or such
 proprietary lease; AND (2) THE TERM "OWNER" SHALL  MEAN  AN  INDIVIDUAL,
 PARTNERSHIP,  CORPORATION OR OTHER ENTITY, INCLUDING A NON-PROFIT COMPA-
 NY, A MUTUAL COMPANY, OR A  HOUSING  DEVELOPMENT  FUND  COMPANY,  HAVING
 RECORD  OR BENEFICIAL TITLE IN FEE SIMPLE TO REAL PROPERTY OR THE LESSEE
 THEREOF UNDER A LEASE HAVING A TERM OF AT LEAST FORTY-NINE YEARS.
   § 4. The general municipal law is amended by adding two  new  sections
 696-e and 696-f to read as follows:
   § 696-E. CHARGES. A MUNICIPALITY, OR AN AGENCY, MAKING A LOAN OR GRANT
 PURSUANT TO THIS ARTICLE, MAY REQUIRE THE PAYMENT OF CHARGES BY AN OWNER
 IN CONSIDERATION FOR THE FINANCING, REGULATION, SUPERVISION AND AUDIT OF
 SUCH  LOAN, OR FOR REGULATION, SUPERVISION AND AUDIT OF SUCH GRANT. SUCH
 CHARGES SHALL BE PAID INTO THE TREASURY OF  THE  MUNICIPALITY  REQUIRING
 THE  CHARGES  AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND OF ANY
 SUCH MUNICIPALITY.
   § 696-F. SERVICING. AN AGENCY MAY MAKE PROVISION IN A  NOTE  AND  LOAN
 AGREEMENT  OR BY SEPARATE AGREEMENT FOR THE PERFORMANCE OF LOAN OR GRANT
 SERVICING FUNCTIONS, INCLUDING, BUT NOT LIMITED TO, FUNCTIONS RELATED TO
 LENDING OR PROVIDING A GRANT  FOR  CONSTRUCTION,  AS  MAY  GENERALLY  BE
 A. 6655--A                          4
 
 PERFORMED BY AN INSTITUTIONAL LENDER. SUCH AGENCY MAY ACT IN SUCH CAPAC-
 ITY  OR APPOINT OR CONSENT TO THE APPOINTMENT OF A FINANCIAL INSTITUTION
 OR OTHER QUALIFIED ENTITY, AS DETERMINED BY SUCH AGENCY, TO ACT IN  SUCH
 CAPACITY  ON BEHALF OF SUCH AGENCY. SUCH AGENCY MAY PAY A REASONABLE AND
 CUSTOMARY FEE TO SUCH FINANCIAL INSTITUTION OR  OTHER  QUALIFIED  ENTITY
 APPOINTED  BY  SUCH AGENCY, OR TO WHOSE APPOINTMENT SUCH AGENCY PROVIDED
 CONSENT, FOR THE PERFORMANCE OF SUCH LOAN OR GRANT SERVICING FUNCTIONS.
   § 5. Subdivision 41 of paragraph a  of  section  11.00  of  the  local
 finance  law,  as amended by chapter 400 of the laws of 1994, is amended
 to read as follows:
   41. Housing. The effectuating of any of the  purposes  of  the  public
 housing law, other than making loans to limited profit housing companies
 pursuant  to  article  two of the private housing finance law, and other
 than making loans to owners of existing multiple dwellings, fifty years;
 bonds issued by a housing authority pursuant to section forty-one of the
 public housing law and guaranteed by a municipality pursuant to  section
 ninety-five  of  the  public housing law, five years, in addition to the
 foregoing period of fifty  years,  for  the  temporary  financing  of  a
 project  prior  to the permanent financing thereof; evidences of indebt-
 edness issued to the state pursuant to paragraph c of section  20.00  of
 this  chapter, three years, in addition to the foregoing period of fifty
 years for the temporary financing of a project prior  to  the  permanent
 financing thereof; loans to limited profit housing companies pursuant to
 article  two of the private housing finance law, fifty-five years; loans
 OR GRANTS to owners of existing private or multiple dwellings, NON-RESI-
 DENTIAL PROPERTY, OR VACANT LAND pursuant to the provisions  of  article
 eight,  article  eight-A,  article  eight-B,  article  eleven or article
 fifteen  of  the  private  housing  finance  law,  or  loans   for   the
 construction  of  multiple  dwellings  pursuant to article eleven of the
 private housing finance law, or loans OR GRANTS for the  pre-development
 costs or construction of private or multiple dwellings pursuant to arti-
 cle twenty-two of the private housing finance law, thirty years.
   § 6. Section 2 of the private housing finance law is amended by adding
 two new subdivisions 30 and 31 to read as follows:
   30. "CLIMATE RESILIENCY IMPROVEMENTS." IMPROVEMENTS FOR THE PURPOSE OF
 PROTECTING  LAND OR ANY STRUCTURES THEREON FROM DAMAGE RESULTING FROM OR
 WHICH MAY RESULT FROM CHANGES IN CLIMATE, INCLUDING, BUT NOT LIMITED TO,
 EXTREME WEATHER EVENTS, ABNORMAL TEMPERATURES, AND SEA LEVEL RISE, OR OF
 REDUCING THE IMPACT OF THE  OPERATION  OF  SUCH  STRUCTURES  ON  CLIMATE
 CHANGE,  INCLUDING,  BUT NOT LIMITED TO, IMPROVEMENTS THAT REDUCE ENERGY
 CONSUMPTION OR PROMOTE THE EFFICIENT USE OF NATURAL RESOURCES.
   31. "PRIVATE LENDER." ONE OR MORE BANKING ORGANIZATIONS,  FOUNDATIONS,
 LABOR  UNIONS,  CREDIT UNIONS, EMPLOYERS' ASSOCIATIONS, VETERANS' ORGAN-
 IZATIONS, COLLEGES, UNIVERSITIES, EDUCATIONAL INSTITUTIONS,  CHILD  CARE
 INSTITUTIONS,  HOSPITALS,  MEDICAL RESEARCH INSTITUTES, INSURANCE COMPA-
 NIES, TRUSTEES OR FIDUCIARIES, TRUSTEES OF PENSIONS AND RETIREMENT FUNDS
 AND SYSTEMS, CORPORATIONS, PARTNERSHIPS, INDIVIDUALS OR  OTHER  ENTITIES
 OR  ANY COMBINATION OF THE FOREGOING, AND SHALL INCLUDE ANY PUBLIC BENE-
 FIT CORPORATION AND THE UNITED STATES OF AMERICA AND ANY OF ITS AGENCIES
 AND DEPARTMENTS. AS USED IN THIS DEFINITION, THE  TERMS  "TRUSTEES"  AND
 "FIDUCIARIES"  SHALL  INCLUDE ANY FIDUCIARY OR FIDUCIARIES HOLDING FUNDS
 FOR INVESTMENT AND THE TERM "BANKING ORGANIZATIONS" SHALL HAVE THE  SAME
 MEANING AS IN SUBDIVISION ELEVEN OF SECTION TWO OF THE BANKING LAW.
   § 7. Section 400 of the private housing finance law is amended to read
 as follows:
 A. 6655--A                          5

   §  400.  Policy  and  purposes  of article. It is hereby declared that
 there exists in municipalities in  this  state  a  seriously  inadequate
 supply  of  safe  and  sanitary  dwelling accommodations for persons and
 families of low income; that such shortage constitutes an emergency  and
 a  grave  menace  to  the health, safety, morals, welfare and comfort of
 citizens of this state; that there exists in such municipalities a large
 number of multiple dwellings which are inadequate, unsafe or  insanitary
 by  reason  of  the absence of proper heating facilities or by reason of
 the necessity for elimination of conditions dangerous to human  life  or
 detrimental  to  health,  including  nuisances  as defined[,] in section
 three hundred nine of the multiple dwelling law, or for other  rehabili-
 tation or improvement and which can be made adequate, safe and sanitary,
 by  the  installation of proper heating facilities or by other rehabili-
 tation, PRESERVATION or improvement or by the elimination of such condi-
 tions; that such installation, rehabilitation, PRESERVATION or  improve-
 ment  cannot  readily  be  provided by the ordinary unaided operation of
 private enterprise for occupancy by persons or families  of  low  income
 without public aid in the form of low interest loans OR GRANTS to owners
 of  such  multiple dwellings for the purpose of such installation, reha-
 bilitation, PRESERVATION or improvement; that the installation of proper
 heating facilities in such multiple dwellings or  other  rehabilitation,
 PRESERVATION  or  improvement  thereof  for  occupancy by persons of low
 income as defined in this article is a public use and a  public  purpose
 for  which  public  money may be loaned OR GRANTED; that such conditions
 require the provisions hereinafter enacted; and  the  necessity  in  the
 public  interest  for  the  provisions  hereinafter  enacted  is  hereby
 declared as a matter of legislative determination.
   § 8. Subdivision 3 of section 401 of the private housing finance  law,
 paragraph  a as amended by chapter 44 of the laws of 1976, and paragraph
 b as amended by chapter 904 of the laws of 1962, is amended to  read  as
 follows:
   3. a. The term "persons or families of low income" shall mean "persons
 of  low income" or "families of low income" as defined in section two of
 this chapter[, whose probable aggregate annual income during the  period
 of  occupancy  does not exceed six times the rental (including the value
 or cost to them of heat, light, water  and  cooking  fuel)  of  dwelling
 units  occupied  by such persons or families in existing multiple dwell-
 ings aided by a loan pursuant to this article, except that in  the  case
 of  persons  or families with three or more dependents, such ratio shall
 not exceed seven to one, and except further that the income  limitations
 prescribed  by  this  paragraph  shall  be  subject to the provisions of
 subdivision two of section four hundred three of this article.
   In calculating annual income,  social  security  payments  and  income
 received from private pension funds by any person sixty-two years of age
 or  more  shall be excluded up to a total maximum amount of seventy-five
 dollars per month. The term "probable aggregate annual income" means the
 annual income of the chief wage earner of the  family,  plus  all  other
 income  of other members of the family over the age of twenty-one years,
 plus a proportion of income of gainfully employed members under the  age
 of  twenty-one years, the proportion to be determined by the agency. The
 agency may exclude a proportion of the income of other  members  of  the
 family  over  the age of twenty-one years for the purpose of determining
 eligibility for commencement of occupancy or continued occupancy, or for
 establishing rental of such family, or for all such purposes].
   b. Notwithstanding the provisions of paragraph a of this  subdivision,
 [and  subject  to  the  provisions  of subdivision three of section four
 A. 6655--A                          6

 hundred three of this article] the term  "persons  or  families  of  low
 income"  shall  also mean any person or family who, immediately prior to
 the date on which a contract for a loan  with  respect  to  an  existing
 multiple  dwelling  is  entered  into pursuant to the provisions of this
 article, occupies any dwelling unit in such multiple  dwelling  and  who
 continuously  occupies  such unit during and after completion of central
 heating or other rehabilitation or  improvement  performed  pursuant  to
 such  contract  provided, however, that any person or family required to
 remove from any such dwelling unit because of such  installation,  reha-
 bilitation  or  improvement  shall,  for the purpose of this section, be
 deemed to have continuously occupied such unit and shall have preference
 in re-entering such multiple dwelling upon completion of  the  aforesaid
 work.
   §  9. Subdivision 6 of section 401 of the private housing finance law,
 as added by chapter 505 of the laws of  1973,  is  amended  to  read  as
 follows:
   6.  The  term  "owner" shall mean a person having record OR BENEFICIAL
 title in fee simple to real property or the lessee thereof under a lease
 having an unexpired term of at least thirty years.
   § 10. Subdivision 1 of section 402 of the private housing finance law,
 as amended by chapter 808 of the laws of 1971,  is  amended  and  a  new
 subdivision 1-a is added to read as follows:
   1.  Notwithstanding  the  provisions  of any general, special or local
 law, a municipality, by such officer or  agency  as  determined  by  its
 local legislative body, is hereby authorized:
   (A) to make or contract to make loans to the owners of existing multi-
 ple  dwellings within its territorial limits, subject to the limitations
 in subdivision two of this section, in such amounts as may  be  required
 for  the installation of proper heating facilities, THE INCORPORATION OF
 CLIMATE RESILIENCY IMPROVEMENTS, or elimination of conditions  dangerous
 to  human  life or detrimental to health, including nuisances as defined
 in section three hundred nine of the multiple  dwelling  law,  or  other
 rehabilitation,  PRESERVATION or improvement of such multiple dwellings,
 and if such owner acquires the multiple dwelling  for  the  purposes  of
 such  rehabilitation,  PRESERVATION  or improvement or owns the multiple
 dwelling subject to an outstanding indebtedness, such loans MAY BE  MADE
 EXCLUSIVELY  FOR  OR may include such amounts as may be required for the
 cost of such acquisition or for  the  refinancing  of  such  outstanding
 indebtedness, and may make temporary loans or advances to such owners in
 anticipation of the permanent municipal loans for such purposes[.]; AND
   (B) TO MAKE OR CONTRACT TO MAKE GRANTS TO ANY OWNER DESCRIBED IN PARA-
 GRAPH (A) OF THIS SUBDIVISION, ON THE SAME TERMS AS PERMITTED UNDER SUCH
 PARAGRAPH FOR A LOAN.
   1-A.  AS USED IN THIS ARTICLE, THE TERM "LOAN" SHALL INCLUDE ANY GRANT
 MADE BY A MUNICIPALITY PURSUANT TO THIS ARTICLE, PROVIDED, HOWEVER, THAT
 ANY  PROVISION  OF  THIS ARTICLE CONCERNING THE REPAYMENT OR FORGIVENESS
 OF, OR SECURITY FOR, A LOAN SHALL NOT APPLY TO ANY GRANT  MADE  PURSUANT
 TO THIS ARTICLE.
   §  11.  Subdivisions 2-a, 2-b, 2-c and 4 of section 402 of the private
 housing finance law, subdivision 2-a as added by chapter 213 of the laws
 of 1975, subdivision 2-b as amended by chapter 362 of the laws of  2000,
 and  subdivision  2-c as amended by chapter 101 of the laws of 1994, are
 amended to read as follows:
   2-a. [As used in this section the term "value" shall mean the "as  is"
 value  of  the  multiple dwelling and the land upon which it is situated
 prior  to  such  installation,  elimination,  other  rehabilitation   or
 A. 6655--A                          7

 improvement  referred  to  in  subdivision  one of this section plus the
 total of all costs of such installation, elimination, rehabilitation  or
 improvement  including,  but  not  limited  to,  the costs of any or all
 undertakings  necessary  for the planning, financing, tenant relocation,
 acquisition, construction, equipment and development in connection ther-
 ewith.
   2-b.] (a) Each permanent loan shall be secured by a bond and  mortgage
 or  note and mortgage upon the multiple dwelling and the land upon which
 it is situated, PROVIDED THAT WHERE THE MULTIPLE DWELLING IS HELD IN THE
 CONDOMINIUM FORM OF OWNERSHIP, SUCH LOAN SHALL BE SECURED BY A BOND  AND
 MORTGAGE  OR  NOTE AND MORTGAGE UPON THE CONDOMINIUM UNITS REHABILITATED
 OR IMPROVED WITH SUCH LOAN; where the loan is made to an owner who is  a
 lessee,  such loan shall be secured by [a first lien on such property] A
 LEASEHOLD INTEREST IN SUCH PROPERTY.
   (b) [The amount of any such loan shall not  exceed  the  cost  of  the
 installation  of proper heating facilities, or elimination of conditions
 dangerous to human life or detrimental to health, including nuisances as
 defined in section three hundred nine of the multiple dwelling  law,  or
 other  rehabilitation  or  improvement  provided that, if any portion of
 such loan is used for the cost of acquisition of the land and the multi-
 ple dwelling or for re-financing, the total amount of  such  loan  shall
 not  exceed two times the cost of such installation, elimination of such
 conditions, rehabilitation or improvement.
   (c) The amount of any such loan, together with the amount of all prior
 liens and encumbrances, shall not exceed, except in the case of  a  loan
 made to a non-profit company, a mutual company, or a housing development
 fund  company,  ninety  per  centum  of the value of the property, after
 completion of the installation of proper heating facilities,  or  elimi-
 nation  of  such  conditions  or other rehabilitation or improvement, as
 estimated by the agency, unless the agency makes a written determination
 that the owner has insufficient resources to pay for the  remaining  ten
 per  centum  of  the  value  of  the  property, after completion of such
 installation, elimination, or other rehabilitation  or  improvement,  as
 estimated  by the agency, in which case such loan shall not exceed nine-
 ty-five per centum of the value of the property, after completion of the
 installation of proper heating facilities, or elimination of such condi-
 tions or other rehabilitation or improvement, as estimated by the  agen-
 cy.  The  amount of any such loan, together with the amount of all prior
 liens and encumbrances, made to a non-profit company, a mutual  company,
 or  a housing development fund company shall not exceed the value of the
 property after completion of such installation,  elimination,  or  other
 rehabilitation  or improvement, as estimated by the agency provided that
 when after completion of such installation, elimination or  other  reha-
 bilitation  or improvement, such project is, or is to be operated exclu-
 sively for the benefit of persons or families who are entitled to  occu-
 pancy by reason of ownership of stock in the corporate owners, such loan
 shall  not  exceed  ninety-eight percentum of the value of the property,
 after completion of such installation, elimination, or  other  rehabili-
 tation  or  improvement,  as  estimated by the agency, unless the agency
 makes a written determination that the owner has insufficient  resources
 to  pay  for  the remaining two per centum of the value of the property,
 after completion of such installation, elimination, or  other  rehabili-
 tation  or  improvement,  as estimated by the agency, in which case such
 loan shall not exceed the value of the  property,  after  completion  of
 such  installation, elimination, or other rehabilitation or improvement,
 as estimated by the agency.
 A. 6655--A                          8

   (d)] Each such bond and mortgage or note and mortgage shall be  repaid
 over  or  within  a  period  of [thirty] FORTY years, PROVIDED THAT SUCH
 PERIOD MAY BE EXTENDED AS THE AGENCY MAY DETERMINE NECESSARY  TO  ENSURE
 THE CONTINUED AFFORDABILITY OR ECONOMIC VIABILITY OF THE MULTIPLE DWELL-
 ING, in such manner as may be provided in such bond and mortgage or note
 and mortgage and contract [but in no case to exceed the probable life of
 the  multiple  dwelling  which is hereby determined to be thirty years].
 Such bond and  mortgage  or  note  and  mortgage  and  the  contract  in
 connection  with  such  permanent  and  temporary loans may contain such
 other terms and provisions not inconsistent with the provisions of  this
 article  as  the local legislative body or the agency may deem necessary
 or desirable to secure repayment of the loan, the interest  thereon  and
 other  charges in connection therewith and to carry out the purposes and
 provisions of this article[; notwithstanding the foregoing, a loan  made
 prior  to  January  first,  nineteen  hundred  seventy-eight may, in the
 discretion of the agency, be extended to a term up to forty-five  years.
 The  agency  may  modify the rate and time of payment of interest on the
 original loan and the rate and time of amortization of principal in such
 manner as required to secure payment of the  loan  within  the  extended
 term], INCLUDING, BUT NOT LIMITED TO, PROVIDING THAT THE LIEN CREATED BY
 SUCH  BOND  AND  MORTGAGE  OR NOTE AND MORTGAGE, AND, IF APPLICABLE, ANY
 REGULATORY AGREEMENT EXECUTED BY THE OWNER AND THE AGENCY OR RESTRICTIVE
 COVENANT APPROVED BY SUCH AGENCY, MAY BE RECORDED IN AN EQUAL OR  SUBOR-
 DINATE  POSITION,  OR  SUBSEQUENTLY MADE EQUAL OR SUBORDINATE, TO A LIEN
 RECORDED BY ANY PRIVATE LENDER AGAINST SUCH MULTIPLE DWELLING.
   [2-c.] 2-B. If a loan pursuant to this article is made to a non-profit
 company or a housing development fund company which  agrees  to  provide
 housing  accommodations  exclusively  for  persons  and  families of low
 income, at least thirty percent of whom are referred to it by the  muni-
 cipality  and  have  prior  to  their initial occupancy in such accommo-
 dations resided in emergency shelter facilities operated by or on behalf
 of the municipality, the agency may provide that the note  and  mortgage
 shall  automatically  be reduced to zero in five equal annual decrements
 commencing on the tenth year after the initial occupancy date,  provided
 that  such  accommodations  have  been  owned  and  operated in a manner
 consistent with an agreement with the  municipality  contained  in  such
 note and mortgage to provide housing for such persons.
   4.  The  agency  may [charge the] REQUIRE THE PAYMENT OF CHARGES BY AN
 owner of such multiple dwelling [reasonable fees] IN  CONSIDERATION  for
 THE financing, regulation, supervision and audit OF SUCH LOAN. Such fees
 shall be [kept by the municipality in a separate fund to be known as the
 housing rehabilitation fund and shall be used to pay for the expenses of
 the  municipality  in  administering  and carrying out the provisions of
 this article] PAID INTO THE TREASURY OF THE MUNICIPALITY  REQUIRING  THE
 CHARGES  AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH
 MUNICIPALITY.
   § 12. Subdivisions 2, 3, 4 and 5 of section 403 of the private housing
 finance law, subdivision 2, paragraphs a, b and c of subdivision  3  and
 subdivision 4 as amended by chapter 904 of the laws of 1962, are amended
 to read as follows:
   2.  [In  the event that after any person or family included within the
 provisions of paragraph a of subdivision three of section  four  hundred
 one of this article, but not included within the provisions of paragraph
 b  of  such  subdivision three, begins occupancy of any dwelling unit in
 any multiple dwelling aided by a loan  pursuant  to  this  article,  and
 during  the period while such dwelling unit is subject to a maximum rent
 A. 6655--A                          9

 prescribed pursuant to this article, the income of such person or family
 increases so as to exceed the  applicable  maximum  prescribed  by  such
 paragraph  a by more than fifty per centum, such person shall be subject
 to removal from such dwelling with the approval of the agency.
   3.  a. In the event that on the date on which a contract for a loan is
 made with respect to a multiple dwelling aided by  a  loan  pursuant  to
 this  article,  any  person  or family occupying a dwelling unit in such
 multiple dwelling and included within the provisions of paragraph  b  of
 subdivision  three  of  section  four hundred one of this article, has a
 probable aggregate annual income, as determined in accordance  with  the
 provisions  of  paragraph a of such subdivision three, which exceeds the
 income limits specified in such paragraph a by more than fifty per cent,
 such person or family shall be subject to  removal  from  such  dwelling
 unit  with the approval of the agency upon the expiration of a period of
 two years after the date on which such contract is entered into.
   b. In the event that at any time within a period of  two  years  after
 any  such  contract  is  entered  into, the income of any such person or
 family increases so as to exceed the income  limits  specified  in  such
 paragraph  a by more than fifty per cent, such person or family shall be
 subject to removal from such dwelling unit  with  the  approval  of  the
 agency upon the expiration of such period of two years.
   c.  If,  at  any  time subsequent to the expiration of a period of two
 years after any such contract is entered into,  and  during  the  period
 while the dwelling unit occupied by any such person or family is subject
 to  a  maximum  rent  prescribed pursuant to this article, the income of
 such person or family increases so as to exceed the income limits speci-
 fied in such paragraph a by more than fifty per  cent,  such  person  or
 family  shall  be  subject  to  removal from such dwelling unit with the
 approval of the agency.
   4.] Any person or family in occupancy[, whether  included  within  the
 provisions of paragraph a or paragraph b of subdivision three of section
 four  hundred  one  of  this  article,  whose income exceeds the maximum
 prescribed by the provisions of such paragraph a  with  respect  to  the
 time of beginning of occupancy, shall] WHOSE INCOME PRECLUDES THE INCLU-
 SION  OF  SUCH  PERSON OR FAMILY WITHIN THE DEFINITION PROVIDED IN PARA-
 GRAPH A OF SUBDIVISION THREE OF SECTION FOUR HUNDRED ONE OF THIS ARTICLE
 MAY BE REQUIRED TO pay a rental surcharge in accordance with a  schedule
 of  surcharges  to be promulgated by the agency.  IN DETERMINING IMPOSI-
 TION OF ANY SUCH SURCHARGE, THE AGENCY SHALL CONSIDER  FACTORS  SUCH  AS
 THE NET OPERATING INCOME AND DEBT SERVICE COVERAGE RATIO OF THE PROPERTY
 AIDED  BY  A  LOAN PURSUANT TO THIS ARTICLE. Rental surcharges collected
 pursuant to this section shall be paid by the owner to the  municipality
 which  has granted such owner tax exemption or tax abatement pursuant to
 any law authorizing the granting of same, as reimbursement to such muni-
 cipality therefor. In the event that such tax exemption and  tax  abate-
 ment  have  not  been  granted,  or in the event that a sum equal to the
 total amount of tax exemption and tax abatement granted to the owner has
 been paid to the municipality, the excess, if any, of  surcharges  shall
 be paid to the municipality in reduction of the loan.
   [5. Any person or family whose removal is required by any provision of
 this article shall be subject to removal by summary proceedings.]
   §  13.  The  opening  paragraph of subdivision 1 of section 404 of the
 private housing finance law, as added by chapter  904  of  the  laws  of
 1962, is amended to read as follows:
   No  such loan shall be made by a municipality to an owner of an exist-
 ing multiple dwelling unless the owner of such  multiple  dwelling  [and
 A. 6655--A                         10

 all  persons  holding  a  lien  prior to that of the municipality] shall
 covenant in writing that so long  as  any  part  of  such  loan  remains
 unpaid,  any  exemption  and  abatement  from  taxation  on the property
 resulting  from the installations, alterations or improvements made with
 such loan remains in effect or for a period of at least ten  years  from
 the occupancy date, whichever is the later:
   §  14.  Section  450 of the private housing finance law, as amended by
 chapter 273 of the laws of 1975, is amended to read as follows:
   § 450. Policy and purposes of article.   It is  hereby  declared  that
 there  exists  in  municipalities  in  this state a seriously inadequate
 supply of safe and sanitary dwelling accommodations; that such  shortage
 constitutes  an  emergency  and  a  grave  menace to the health, safety,
 morals, welfare and comfort of citizens of  this  state;  that  existing
 conditions  of deterioration of housing marked by noncompliance with the
 multiple dwelling law or local housing codes threaten a further decrease
 in such supply; that rehabilitation  and  improvement  of  dwellings  to
 prolong  the  useful  life  of such dwellings may be necessary to arrest
 such conditions of deterioration; that the elimination  of  such  condi-
 tions  by rehabilitation or other improvement cannot readily be provided
 by the ordinary unaided operation of private enterprise  without  public
 aid in the form of low interest loans OR GRANTS to owners of such multi-
 ple  dwellings;  that  such  rehabilitation or other improvement of such
 dwellings to bring them into conformance with the multiple dwelling  law
 and  local  housing  codes  is a public use, a public purpose and a city
 purpose for which public money may be loaned OR  GRANTED  by  a  munici-
 pality  and  for which indebtedness may be contracted by a municipality;
 that such conditions require the provisions hereinafter enacted, and the
 necessity in the public interest for the provisions hereinafter  enacted
 is hereby declared as a matter of legislative determination.
   §  15.  Subdivisions  2  and  3  of section 451 of the private housing
 finance law, subdivision 2 as amended by chapter 705 of the laws of 1976
 and subdivision 3 as amended by chapter 269 of the  laws  of  1985,  are
 amended to read as follows:
   2.  "Occupancy by persons of low income." Occupancy by [persons paying
 rentals or carrying charges not in excess  of  the  average  rentals  or
 carrying  charges  prevailing  in  local  projects  of municipally-aided
 limited-profit housing companies aided under article two of  this  chap-
 ter,  the occupancy of which commenced on or after May eighteenth, nine-
 teen hundred seventy] "PERSONS  OF  LOW  INCOME"  OR  "FAMILIES  OF  LOW
 INCOME," AS SUCH TERMS ARE DEFINED IN SECTION TWO OF THIS CHAPTER.
   3.  "Owner."  An individual, partnership, corporation or other entity,
 including a non-profit company, a mutual company, or a housing  develop-
 ment  fund company, which holds record OR BENEFICIAL title in fee simple
 to the multiple dwelling and the real property upon which it is  situate
 or the lessee thereof under a lease the unexpired term of which shall be
 not less than the term of the loan to be made under this article.
   § 16. Subdivision 1 of section 452 of the private housing finance law,
 as  amended  by  chapter  923  of the laws of 1983, is amended and a new
 subdivision 1-a is added to read as follows:
   1. Notwithstanding the provisions of any  general,  special  or  local
 law, a municipality is hereby authorized:
   (A) to make or contract to make loans to the owners of existing multi-
 ple  dwellings within its territorial limits, subject to the limitations
 in subdivision two of this section, for the elimination of any substand-
 ard or insanitary condition or conditions in violation of  the  multiple
 dwelling  law  or  local  housing code, FOR THE INCORPORATION OF CLIMATE
 A. 6655--A                         11
 
 RESILIENCY IMPROVEMENTS or for such replacement  and  rehabilitation  of
 the  heating, plumbing, electrical and related systems or other improve-
 ments as shall be reasonably necessary to prolong  the  useful  life  of
 such  dwellings,  and  may make temporary loans to such owners in antic-
 ipation of the permanent municipal loans for such purposes; AND
   (B)  TO MAKE OR CONTRACT TO MAKE GRANTS  TO  ANY  OWNER  DESCRIBED  IN
 PARAGRAPH  (A) OF THIS SUBDIVISION, ON THE SAME TERMS AS PERMITTED UNDER
 SUCH PARAGRAPH FOR A LOAN.
   1-A.  AS USED IN THIS ARTICLE, THE TERM "LOAN" SHALL INCLUDE ANY GRANT
 MADE BY A MUNICIPALITY PURSUANT TO THIS ARTICLE, PROVIDED, HOWEVER, THAT
 PROVISIONS OF THIS ARTICLE CONCERNING THE REPAYMENT OR  FORGIVENESS  OF,
 OR  SECURITY  FOR,  A LOAN SHALL NOT APPLY TO ANY GRANT MADE PURSUANT TO
 THIS ARTICLE.
   § 17. Subdivisions 2 and 5 of  section  452  of  the  private  housing
 finance law, subdivision 2 as amended by chapter 408 of the laws of 2009
 and  subdivision  5  as  amended by chapter 273 of the laws of 1975, are
 amended to read as follows:
   2. Each loan shall be evidenced by a note executed by the owner of the
 existing multiple dwelling. The supervising agency in its discretion may
 require one or more of the shareholders of a corporate owner to  co-sign
 such note or to otherwise guarantee or pledge security for the repayment
 of  the  loan.  [The amount of any such loan shall not exceed the sum of
 thirty-five thousand dollars ($35,000) per dwelling unit, or the cost of
 eliminating such substandard or insanitary condition or  conditions,  or
 effecting  such  rehabilitation or improvement, whichever is less.] Each
 such note shall be repaid within a period [of the probable life  of  the
 existing  multiple  dwelling  which  is  hereby  determined to be thirty
 years, or such shorter period as the supervising agency shall determine]
 OF FORTY YEARS, PROVIDED THAT SUCH PERIOD MAY BE EXTENDED AS THE  SUPER-
 VISING  AGENCY  MAY DETERMINE NECESSARY TO ENSURE THE CONTINUED AFFORDA-
 BILITY OR ECONOMIC VIABILITY OF THE EXISTING  MULTIPLE  DWELLING.    The
 repayment  shall  be made in such manner as may be provided in such note
 and contract, if any, in connection with such  loan  and  may  authorize
 such  owner,  with  the consent of the supervising agency, to prepay the
 principal of the loan subject to such terms and  conditions  as  therein
 provided.  Such  note  and  contract  may  contain  such other terms and
 provisions not inconsistent with the provisions of this article  as  the
 local  legislative  body  or  supervising  agency  may deem necessary or
 desirable to secure repayment of the  loan,  the  interest  thereon  and
 other  charges in connection therewith and to carry out the purposes and
 provisions of this article, including  but  not  limited  to  provisions
 ensuring availability of rents for such repayment AND PROVISIONS PERMIT-
 TING  THE  LIEN CREATED BY SUCH NOTE AND MORTGAGE, AND, IF APPLICABLE, A
 REGULATORY AGREEMENT EXECUTED BY SUCH OWNER AND SUPERVISING  AGENCY,  BE
 RECORDED  IN  AN  EQUAL  AND  SUBORDINATE POSITION, OR SUBSEQUENTLY MADE
 EQUAL OR SUBORDINATE, TO A LIEN RECORDED BY ANY PRIVATE  LENDER  AGAINST
 SUCH MULTIPLE DWELLING.
   5.  The supervising agency may [charge] REQUIRE THE PAYMENT OF CHARGES
 BY the owner of such existing multiple  dwelling  [reasonable  fees]  IN
 CONSIDERATION  for  THE  financing, regulation, supervision and audit OF
 SUCH LOAN.  Such [fees] CHARGES shall be [kept by the municipality in  a
 separate  fund  to be known as the article VIII-A housing rehabilitation
 fund and shall be used to help meet the expenses of the municipality  in
 administering and carrying out the provisions of this article] PAID INTO
 THE TREASURY OF THE MUNICIPALITY REQUIRING THE CHARGES AND SHALL BE PAID
 AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH MUNICIPALITY.
 A. 6655--A                         12
 
   §  18.  Section  453  of  the private housing finance law, as added by
 chapter 924 of the laws of 1970, paragraphs (c) and (d) as  amended  and
 paragraph  (e)  of  subdivision 1 as added by chapter 273 of the laws of
 1975, is amended to read as follows:
   §  453.  Conditions precedent to making such loans.  [1.] No such loan
 shall be made by a municipality to an  owner  of  an  existing  multiple
 dwelling  unless  the  owner of such multiple dwelling shall covenant in
 writing that so long as any part of such loan shall remain  unpaid    OR
 FOR  A PERIOD OF AT LEAST TEN YEARS FROM THE DATE OF THE LOAN, WHICHEVER
 IS LATER:
   [(a)] 1. Each dwelling unit in such multiple dwelling shall be  avail-
 able solely for occupancy by persons of low income;
   [(b)] 2. No person who lives in such multiple dwelling at the time the
 loan  is made shall be required to move because of the rehabilitation or
 improvement financed thereby, EXCEPT THAT A TEMPORARY RELOCATION MAY  BE
 REQUIRED IN CONNECTION WITH SUCH REHABILITATION OR IMPROVEMENT;
   [(c)] 3. All persons operating or managing such multiple dwelling will
 permit  the duly authorized officers, employees, agents or inspectors of
 the municipality to enter in or upon and inspect such multiple  dwelling
 at all reasonable hours; [and
   (d)]  4.  The  municipality by such duly authorized representatives as
 aforesaid shall have full power to investigate into and order the  owner
 of  such multiple dwelling to furnish such reports and information as it
 may require concerning such rehabilitation or improvement and shall have
 full power to audit the  books  of  said  owner  with  respect  to  such
 matters; and
   [(e)]  5.  The  owner will submit to the supervising agency annually a
 statement of the income and expenses of such multiple dwelling, in  such
 form as shall be approved by such agency.
   [2.  No  such  loan  shall be made by a municipality unless such owner
 executed an affidavit that he was unable to obtain  financing  for  such
 rehabilitation  or  improvement  because of the neighborhood, the age of
 the building, or other factors indicating an inability  of  the  private
 sector unaided to cause such rehabilitation or improvement to be made.]
   §  19.  The  article  heading  of  article  8-B of the private housing
 finance law, as added by chapter 786 of the laws of 1987, is amended  to
 read as follows:
            LOANS TO [OWNER-OCCUPANTS] OWNERS OF ONE TO FOUR UNIT
                      PRIVATE AND MULTIPLE DWELLINGS
   §  20.  Section  470 of the private housing finance law, as amended by
 chapter 200 of the laws of 1997, is amended to read as follows:
   § 470. Policy and purposes of article. It is hereby declared and found
 that there exists in municipalities within  the  state  substandard  and
 unsanitary  areas and neighborhoods containing deteriorated [owner-occu-
 pied] one to four unit private and  multiple  dwellings,  and  that  the
 rehabilitation  OR  PRESERVATION of such dwellings is necessary in order
 to aid in the prevention and elimination of slums  and  blight  in  such
 areas and  neighborhoods.
   It  further  is found that there exists in such municipalities a seri-
 ously inadequate supply of safe and  sanitary  [owner-occupied]  one  to
 four  unit  private  and multiple dwellings, particularly for persons of
 low and moderate income, that existing non-compliance with local housing
 codes and with the multiple dwelling law and the multiple residence  law
 threatens  to decrease such supply, and that the rehabilitation, PRESER-
 VATION and improvement of such dwellings is  necessary  to  arrest  such
 conditions of deterioration.
 A. 6655--A                         13
 
   It  further  is found that the elimination of such conditions by reha-
 bilitation or other improvements IN ONE TO FOUR UNIT PRIVATE AND  MULTI-
 PLE  DWELLINGS cannot be readily provided without public aid in the form
 of low interest loans OR GRANTS to [low and moderate income  owner-occu-
 pants] OWNERS of such one to four unit dwellings.
   The  rehabilitation,  PRESERVATION or other [improvements] IMPROVEMENT
 of such PRIVATE AND MULTIPLE dwellings [owned and occupied  by  low  and
 moderate  income  persons  or  families,]  is  hereby  declared a public
 purpose and a municipal purpose for which public monies may be loaned OR
 GRANTED.
   In order, further, to promote the preservation and  rehabilitation  of
 such  dwellings, it is hereby declared that additional provisions should
 be made to provide public monies for interest  reduction  subsidies  for
 private loans made by private investors for such rehabilitation.
   The  necessity in the public interest for the provisions of this arti-
 cle is hereby declared as a matter of legislative determination.
   § 21. Subdivisions 8 and 9 of  section  471  of  the  private  housing
 finance  law, as amended by chapter 200 of the laws of 1997, are amended
 to read as follows:
   8. "Owner" shall mean an individual  or  individuals,  a  partnership,
 [or]  A  CORPORATION  OR  OTHER  ENTITY, INCLUDING BUT NOT LIMITED TO, A
 TRUST, a joint tenancy, tenancy in common or  tenancy  by  the  entirety
 holding  record OR BENEFICIAL title in fee simple to an existing private
 or multiple dwelling and the real property upon which it is situated, OR
 THE LESSEE THEREOF UNDER A LEASE HAVING AN UNEXPIRED TERM  OF  AT  LEAST
 THIRTY  YEARS.  "Owner"  shall  be  deemed to also include a cooperative
 corporation or a condominium association.
   9. ["Owner-occupant" shall mean an owner who occupies at least one  of
 the  units  in a one to four unit dwelling as his or her principal resi-
 dence. In the case of a partnership, joint tenancy, tenancy in common or
 tenancy  by the entirety, at least one partner  or  tenant  must  be  an
 owner-occupant.  In  the case of a cooperative or condominium a majority
 of the units must be owner-occupied.  The  term  "owner-occupant"  shall
 include  an owner of a vacant one to four unit dwelling who demonstrates
 an intention to move into one of the units after the  rehabilitation  of
 the property] RESERVED.
   §  22.    Section  472 of the private housing finance law, as added by
 chapter 786 of the laws of 1987, subdivision 1 as amended by chapter 479
 of the laws of 2005, subdivision 2 as amended by chapter 408 of the laws
 of 2009, subdivision 3 as amended by chapter 84 of the laws of 2001, and
 subdivision 7 as added by chapter 705 of the laws of 1991, is amended to
 read as follows:
   § 472. Loans to [owner-occupants]  OWNERS.  1.    Notwithstanding  the
 provisions  of any general, special or local law, a municipality, acting
 through an agency, is authorized:
   (A) to make, or contract to make, loans to [low  and  moderate  income
 owner-occupants] OWNERS of one to four unit existing private or multiple
 dwellings  within  its  territorial limits, subject to the limitation of
 subdivisions two through seven of this section, in such amounts as shall
 be required for the rehabilitation, IMPROVEMENT OR ACQUISITION  of  such
 dwellings[,]  provided, [however, that such loans shall not exceed sixty
 thousand dollars per dwelling unit. Such] THAT ANY  SUCH  REHABILITATION
 OR  IMPROVEMENT  MAY INCLUDE CLIMATE RESILIENCY IMPROVEMENTS. SUCH loans
 may also BE MADE EXCLUSIVELY FOR  OR  include  the  refinancing  of  the
 outstanding  indebtedness  of  such  dwellings, and the municipality may
 A. 6655--A                         14
 
 make temporary loans or advances to  such  [owner-occupants]  OWNERS  in
 anticipation of permanent loans for such purposes; AND
   (B) TO MAKE OR CONTRACT TO MAKE GRANTS TO ANY OWNER DESCRIBED IN PARA-
 GRAPH (A) OF THIS SUBDIVISION, ON THE SAME TERMS AS PERMITTED UNDER SUCH
 PARAGRAPH FOR A LOAN.
   1-A.  AS USED IN THIS ARTICLE, THE TERM "LOAN" SHALL INCLUDE ANY GRANT
 MADE BY A MUNICIPALITY PURSUANT TO THIS ARTICLE, PROVIDED, HOWEVER, THAT
 PROVISIONS  OF  THIS ARTICLE CONCERNING THE REPAYMENT OR FORGIVENESS OF,
 OR SECURITY FOR, A LOAN SHALL NOT APPLY TO ANY GRANT  MADE  PURSUANT  TO
 THIS ARTICLE.
   2. Each loan shall be evidenced by a note executed by the [owner-occu-
 pant]  OWNER of the existing dwelling. Repayment of each such note shall
 be within a period of [the probable life of the existing dwelling  which
 is  hereby  determined to be thirty years, or such shorter period as the
 agency shall determine] FORTY YEARS, PROVIDED THAT SUCH  PERIOD  MAY  BE
 EXTENDED  AS  THE AGENCY MAY DETERMINE NECESSARY TO ENSURE THE CONTINUED
 AFFORDABILITY OR ECONOMIC VIABILITY  OF  THE  EXISTING  DWELLING.    The
 repayment  shall  be made in such manner as may be provided in such note
 and contract, if any, in connection with such loan,  and  may  authorize
 such  [owner-occupant]  OWNER, with the consent of the agency, to prepay
 the principal of the loan subject to such terms and conditions as there-
 in provided. In order to make any such loan affordable to the [owner-oc-
 cupant] OWNER, the agency may provide in such note and contract that all
 of the outstanding principal of said loan may be self-liquidated over  a
 [fifteen  year]  period of [owner-occupancy] NOT LESS THAN FIFTEEN YEARS
 OF CONTINUOUS COMPLIANCE BY THE OWNER WITH  A  REGULATORY  AGREEMENT  OR
 OTHER  RESTRICTIVE  COVENANT WITH OR APPROVED BY THE AGENCY AND UPON THE
 SATISFACTION OF ANY ADDITIONAL CONDITIONS SPECIFIED THEREIN.  Such  note
 and  contract may contain such other terms and provisions not inconsist-
 ent with the provisions of this article as the agency may deem necessary
 or desirable to secure repayment of the loan, the interest  thereon,  if
 any,  and  other  charges  in connection therewith, and to carry out the
 purposes and provisions of this article, INCLUDING, BUT NOT LIMITED  TO,
 PROVIDING THAT THE LIEN CREATED BY THE NOTE AND MORTGAGE, AND, IF APPLI-
 CABLE,  ANY  REGULATORY  AGREEMENT EXECUTED BY SUCH OWNER AND AGENCY, OR
 RESTRICTIVE COVENANT APPROVED BY SUCH AGENCY,  MAY  BE  RECORDED  IN  AN
 EQUAL  OR  SUBORDINATE  POSITION, OR SUBSEQUENTLY MADE EQUAL OR SUBORDI-
 NATE, TO A LIEN RECORDED BY ANY PRIVATE  LENDER  AGAINST  SUCH  EXISTING
 DWELLING.
   3.  The agency in its discretion may require that the [owner-occupant]
 OWNER execute, acknowledge and deliver a uniform commercial code financ-
 ing statement for the real property improvement to be in  such  form  as
 the  agency  shall  specify  and  in accordance with the requirements of
 section 9--502 of the uniform commercial code of the state of New  York.
 Said  financing  statement  shall be filed or recorded without charge in
 accordance with the provisions of paragraph one  of  subsection  (a)  of
 section 9--501 of the uniform commercial code, and from the date of such
 filing  the  municipality  shall  have a lien against said real property
 improvement for the amount advanced or so much thereof as remains unpaid
 together with the interest thereon. Upon payment of all sums advanced by
 the municipality and interest thereon,  and  upon  demand  of  the  then
 record  owner  of  the real property, the agency shall deliver a copy of
 the financing statement with an endorsement thereon  that  the  lien  is
 satisfied.  Upon  filing  of such copy in the office where the financing
 statement was filed and upon payment of the  proper  fee  therefor,  the
 lien of such financing statement shall be discharged.
 A. 6655--A                         15
 
   4.  The  agency  may  require  the [owner-occupant] OWNER to execute a
 mortgage as security for a loan in lieu of or in addition to a financing
 statement as provided in subdivision three of this section.  Such  mort-
 gage  shall  contain such terms and provisions not inconsistent with the
 provisions of this article as the agency shall deem necessary or desira-
 ble to secure repayment of the loan.
   5.  Loans  may  be  made with respect to a one to four unit private or
 multiple dwelling encumbered by mortgages, provided no  mortgage  is  in
 default,  except if such default shall be remedied by the proposed reha-
 bilitation or improvement.
   6. The agency may [charge] REQUIRE  the  [owner-occupant]  PAYMENT  OF
 CHARGES  BY  THE  OWNER  of  such  existing private or multiple dwelling
 [reasonable fees] IN CONSIDERATION for [administration,] THE  financing,
 regulation,  supervision and audit  OF SUCH LOAN.  SUCH CHARGES SHALL BE
 PAID INTO THE TREASURY OF THE MUNICIPALITY  REQUIRING  THE  CHARGES  AND
 SHALL  BE  PAID  AND  DEPOSITED  IN THE GENERAL FUND OF ANY SUCH MUNICI-
 PALITY.
   7. In making a loan under this article, an agency shall have the power
 to participate in a loan made by any private  investor[,  provided  that
 the  portion of the loan funded by the agency shall not exceed an amount
 equal to seventy-five percent of the total loan.] The agency  may  enter
 into  an  agreement  with  a private investor to deposit funds with such
 private investor  to  cover  the  agency's  participation  in  loans  to
 [owner-occupants] OWNERS of one to four unit existing private and multi-
 ple  dwellings  with  such  funds  advanced  by such private investor to
 [owner-occupants] OWNERS of existing dwellings. The portion of the  loan
 funded  by  the  agency  may  be  equal to or subordinate in lien to the
 portion of the loan funded by the private  investor  and  the  note  and
 contract  may  contain such terms with respect to interest rate, if any,
 and time of payment of principal and interest as determined by the agen-
 cy. The agency may make provision, either in the mortgage  or  mortgages
 or by separate agreement, for the performance by the private investor of
 such  services as are generally performed by a banking institution which
 itself holds a mortgage,  including,  without  limitation,  construction
 loan  advances,  construction  supervision,  initiation  of  foreclosure
 proceedings,  procurement  of  insurance,  and  all  other  matters   in
 connection  with the financing, supervision, regulation and audit of any
 such loan. In order to make the loan affordable to the  [owner-occupant]
 OWNER,  the agency may provide an interest reduction subsidy pursuant to
 section four hundred seventy-five of this article, or may  provide  that
 all  or part of the agency's portion of the outstanding principal of any
 such participation loan may be self-liquidated  over  a  [fifteen  year]
 period  of  [owner-occupancy]  NOT LESS THAN FIFTEEN YEARS OF CONTINUOUS
 COMPLIANCE BY THE OWNER WITH A REGULATORY AGREEMENT OR OTHER RESTRICTIVE
 COVENANT WITH OR APPROVED BY THE AGENCY AND UPON THE SATISFACTION OF ANY
 ADDITIONAL CONDITIONS SPECIFIED THEREIN.
   § 23. Subdivisions 1 and 2 of  section  473  of  the  private  housing
 finance law, as added by chapter 786 of the laws of 1987, are amended to
 read as follows:
   1.  No  such  loan  shall  be  made to an [owner-occupant] OWNER of an
 existing private or multiple dwelling unless the [owner-occupant]  OWNER
 of  such  private or multiple dwelling shall covenant in writing that so
 long as any part of such loan shall remain  unpaid  OR  ANY  REQUIREMENT
 IMPOSED  AS A CONDITION FOR MAKING SUCH LOAN THAT SURVIVES THE REPAYMENT
 OF SUCH LOAN, INCLUDING, BUT NOT LIMITED TO, IN A  REGULATORY  AGREEMENT
 EXECUTED BY SUCH OWNER AND THE AGENCY OR A RESTRICTIVE COVENANT APPROVED
 A. 6655--A                         16
 
 BY  SUCH  AGENCY,  REMAINS  IN EFFECT: (i) the [owner-occupant] OWNER or
 managing agent or operator  of  such  dwelling  shall  permit  the  duly
 authorized  officers,  employees,  agents or inspectors of the agency to
 enter  in  or  upon and inspect such private or multiple dwelling at all
 reasonable hours; (ii) the agency  by  such  duly  authorized  represen-
 tatives as aforesaid shall have full power to investigate into and order
 the  [owner-occupant] OWNER of such dwelling to furnish such reports and
 information as it may require concerning such rehabilitation or improve-
 ment and shall have full power to audit the books  of  said  owner  with
 respect  to  such matters; and (iii) if the property to be rehabilitated
 is a multiple dwelling, the [owner-occupant] OWNER will  submit  to  the
 agency  annually a statement of income and expenses of such dwelling, in
 such form as shall be approved by the agency.
   2. A municipality shall neither make nor participate in a loan  to  an
 [owner-occupant]  OWNER  of  an  existing  private  or multiple dwelling
 pursuant to this article unless the agency finds that (I)  the  area  in
 which  such  dwelling is situated is a blighted, deteriorated or deteri-
 orating area or has a blighting influence on the surrounding area, or is
 in danger of becoming a slum or a blighted area because of the existence
 of substandard, unsanitary, deteriorating or deteriorated conditions, an
 aged housing stock, or other factors  indicating  an  inability  of  the
 private  sector  to  cause  such  rehabilitation to be made; OR (II) THE
 OWNER OF SUCH PRIVATE OR MULTIPLE DWELLING IS A PERSON OR FAMILY OF  LOW
 INCOME.
   § 24. Subdivision 2 of section 474 of the private housing finance law,
 as  added  by  chapter  786  of  the laws of 1987, is amended to read as
 follows:
   2. The agency is authorized to make provision in  the  note  and  loan
 agreement  or by separate agreement for the servicing of such loans by a
 loan servicing company OR OTHER QUALIFIED ENTITY, AS DETERMINED  BY  THE
 AGENCY,  and  such  services  may  include,  but  not be limited to, the
 collection of the debt services on such  loans  and  the  establishment,
 administration, and distribution of an escrow account for the payment of
 the  [owner-occupant's] OWNER'S real estate taxes, sewer and water rents
 and fire insurance.
   § 25. Section 475 of the private housing  finance  law,  as  added  by
 chapter 786 of the laws of 1987, is amended to read as follows:
   § 475. Interest reduction subsidies. Notwithstanding the provisions of
 any  general,  special  or  local law, a municipality, acting through an
 agency, is authorized to  provide,  or  contract  to  provide,  interest
 reduction  subsidies  for  loans  made  by private investors to [low and
 moderate income owner-occupants] OWNERS of one  to  four  unit  existing
 private  or  multiple  dwellings  within its territorial limits, if such
 [owner-occupants] OWNERS would have been eligible under  the  provisions
 of  this  article  for  a loan made by the municipality pursuant to this
 article.
   § 26. Subdivision 1 of section 576-c of the  private  housing  finance
 law,  as  amended  by  section  1 of chapter 254 of the laws of 1998, is
 amended to read as follows:
   1. In addition to the powers granted  to  municipalities  pursuant  to
 this article, a municipality, acting by its supervising agency, may make
 loans for the purposes of acquisition, rehabilitation or construction of
 dwelling  accommodations to a non-profit housing development fund compa-
 ny, a  wholly-owned  subsidiary  of  such  company,  a  partnership  the
 controlling  interest  of  which  is  held by such company and which has
 agreed to limit profits or rate of return  of  investors  in  accordance
 A. 6655--A                         17
 
 with  a  formula  established  or  approved by the company, or a private
 developer which has agreed to limit profits or rate of return of  inves-
 tors  in accordance with a formula established or approved by the compa-
 ny,  which  agrees  to  provide  housing  accommodations exclusively for
 persons and families of low income, at least thirty percent of whom  are
 referred  to  it by a municipality and have prior to their initial occu-
 pancy in such accommodations resided  in  emergency  shelter  facilities
 operated  by  or  on  behalf of the municipality or who are otherwise in
 need of emergency shelter as determined by the municipality,  providing,
 however,  that  in  the  case  of a building acquired by such a company,
 subsidiary, partnership, or developer the obligation to provide  housing
 accommodations  for  such  persons  shall be applicable only to dwelling
 accommodations which are or become vacant after the date of acquisition.
 Such loans may be made for such period of  time  and  pursuant  to  such
 terms  and conditions as may be required by the municipality, INCLUDING,
 BUT NOT LIMITED TO, TERMS AND CONDITIONS PROVIDING THAT THE LIEN CREATED
 BY THE NOTE AND MORTGAGE, AND, IF APPLICABLE, ANY  REGULATORY  AGREEMENT
 EXECUTED  BY  THE  OWNER  AND  SUCH MUNICIPALITY OR RESTRICTIVE COVENANT
 APPROVED BY A SUPERVISING AGENCY, MAY BE RECORDED IN AN EQUAL OR  SUBOR-
 DINATE  POSITION,  OR  SUBSEQUENTLY MADE EQUAL OR SUBORDINATE, TO A LIEN
 RECORDED BY ANY PRIVATE LENDER AGAINST THE DWELLING AIDED  BY  THE  LOAN
 MADE  PURSUANT TO THIS ARTICLE, and the supervising agency of such muni-
 cipality may provide that the amount of  the  note  and  mortgage  shall
 automatically  be reduced to zero in five equal decrements commencing on
 the tenth year after the initial occupancy date, provided  that,  as  of
 the  date  of such reduction, such accommodations have been and continue
 to be owned and operated in a manner consistent with an  agreement  with
 the  municipality contained in such note and mortgage to provide housing
 for such persons.  Notwithstanding such provision as  contained  in  the
 note  and  mortgage, the loan shall be reduced to zero only if, prior to
 or simultaneously with delivery of such note and mortgage, the supervis-
 ing agency made a written determination that  such  reduction  would  be
 necessary to ensure the continued affordability or economic viability of
 such  housing  project.  Such  written  determination shall document the
 basis upon which the loan was determined to be eligible for evaporation.
   § 27. Section 576-c of the private housing finance law, as amended  by
 section  2  of  chapter  254  of the laws of 1998, is amended to read as
 follows:
   § 576-c. Loans to housing development companies by a municipality.  In
 addition  to the powers granted to municipalities pursuant to this arti-
 cle, a municipality, acting by its supervising agency,  may  make  loans
 for  the  purposes  of  acquisition,  rehabilitation  or construction of
 dwelling accommodations to a non-profit housing development fund  compa-
 ny,  a  wholly-owned  subsidiary  of  such  company,  a  partnership the
 controlling interest of which is held by  such  company  and  which  has
 agreed  to  limit  profits  or rate of return of investors in accordance
 with a formula established or approved by  the  company,  or  a  private
 developer  which has agreed to limit profits or rate of return of inves-
 tors in accordance with a formula established or approved by the  compa-
 ny,  which  agrees  to  provide  housing  accommodations exclusively for
 persons and families of low income, at least thirty percent of whom  are
 referred  to  it by a municipality and have prior to their initial occu-
 pancy in such accommodations resided  in  emergency  shelter  facilities
 operated  by  or  on  behalf of the municipality or who are otherwise in
 need of emergency shelter as determined by the municipality,  providing,
 however,  that  in  the  case  of a building acquired by such a company,
 A. 6655--A                         18
 
 subsidiary, partnership, or developer the obligation to provide  housing
 accommodations  for  such  persons  shall be applicable only to dwelling
 accommodations which are or become vacant after the date of acquisition.
 Such  loans  may  be  made  for such period of time and pursuant to such
 terms and conditions as may be required by the municipality,  INCLUDING,
 BUT NOT LIMITED TO, TERMS AND CONDITIONS PROVIDING THAT THE LIEN CREATED
 BY  THE  NOTE AND MORTGAGE, AND, AS APPLICABLE, ANY REGULATORY AGREEMENT
 EXECUTED BY THE OWNER AND SUCH MUNICIPALITY, MAY BE RECORDED IN AN EQUAL
 OR SUBORDINATE POSITION, OR SUBSEQUENTLY MADE EQUAL OR  SUBORDINATE,  TO
 THE  LIEN  RECORDED  BY ANY PRIVATE LENDER AGAINST THE DWELLING AIDED BY
 THE LOAN MADE PURSUANT TO THIS ARTICLE, and the  supervising  agency  of
 such  municipality  may provide that the amount of the note and mortgage
 shall automatically be reduced to zero in five equal decrements commenc-
 ing on the tenth year after the initial occupancy date,  provided  that,
 as  of  the  date  of  such reduction, such accommodations have been and
 [continues] CONTINUE to be owned and operated  in  a  manner  consistent
 with an agreement with the municipality contained in such note and mort-
 gage  to  provide  housing  for  such  persons.    Notwithstanding  such
 provision as contained in the note  and  mortgage,  the  loan  shall  be
 reduced  to  zero  only  if, prior to or simultaneously with delivery of
 such note and mortgage, the supervising agency made a  written  determi-
 nation  that  such  reduction would be necessary to ensure the continued
 affordability or economic viability of such housing project. Such  writ-
 ten  determination  shall  document  the  basis  upon which the loan was
 determined to be eligible for evaporation.
   § 28. The private housing finance law is amended by  adding  four  new
 sections 611, 612, 613 and 614 to read as follows:
   §  611. RENT STABILIZATION AND REGULATORY AGREEMENTS. 1. NOTWITHSTAND-
 ING ANY OTHER PROVISION OF LAW, INCLUDING  THE  PROVISIONS  OF,  OR  ANY
 REGULATION  PROMULGATED PURSUANT TO, THE EMERGENCY TENANT PROTECTION ACT
 OF NINETEEN SEVENTY-FOUR OR  THE  RENT  STABILIZATION  LAW  OF  NINETEEN
 HUNDRED SIXTY-NINE, THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL,
 WHEN  SUPERVISING  HOUSING  ACCOMMODATIONS UNDER PROVISIONS OF LAW OTHER
 THAN THE EMERGENCY TENANT PROTECTION ACT OF NINETEEN SEVENTY-FOUR OR THE
 RENT STABILIZATION LAW OF NINETEEN HUNDRED SIXTY-NINE, THE NEW YORK CITY
 DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT, THE NEW  YORK  STATE
 URBAN  DEVELOPMENT CORPORATION, THE NEW YORK STATE HOUSING FINANCE AGEN-
 CY, THE NEW YORK STATE HOUSING TRUST FUND, AND THE NEW YORK CITY HOUSING
 DEVELOPMENT CORPORATION, OR SUCH OTHER STATE OR MUNICIPAL AGENCY,  POLI-
 TICAL  SUBDIVISION,  PUBLIC BENEFIT CORPORATION,   OR INSTRUMENTALITY AS
 THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL IDENTIFY, MAY,
 BY AGREEMENT WITH AN OWNER OF A MULTIPLE DWELLING, SUBJECT  ANY  HOUSING
 ACCOMMODATION   IN  SUCH  MULTIPLE  DWELLING  TO  THE  EMERGENCY  TENANT
 PROTECTION ACT OF NINETEEN SEVENTY-FOUR OR THE RENT STABILIZATION LAW OF
 NINETEEN HUNDRED SIXTY-NINE, OR BOTH, IF APPLICABLE TO THE MUNICIPALITY.
 THE REQUIREMENTS OF SUCH AGREEMENT  SHALL  SUPPLEMENT  ANY  REQUIREMENTS
 IMPOSED  ON  SUCH HOUSING ACCOMMODATION PURSUANT TO ANY OTHER PROVISIONS
 OF LAW.
   2. ANY AGREEMENT BETWEEN A STATE OR MUNICIPAL AGENCY, POLITICAL SUBDI-
 VISION, PUBLIC BENEFIT  CORPORATION,  OR  INSTRUMENTALITY  DESCRIBED  IN
 SUBDIVISION ONE OF THIS SECTION AND AN OWNER OF A MULTIPLE DWELLING THAT
 CONTAINS  PROVISIONS  THAT  ARE  CONSISTENT WITH SUBDIVISION ONE OF THIS
 SECTION AND THAT IS IN EFFECT AS OF THE EFFECTIVE DATE OF  THIS  SECTION
 IS AND WILL REMAIN VALID AND ENFORCEABLE.
   § 612. COMPLIANCE MONITORING. 1. ANY SUPERVISING AGENCY AND ANY CORPO-
 RATE  GOVERNMENTAL  AGENCY THAT CONSTITUTES A PUBLIC BENEFIT CORPORATION
 A. 6655--A                         19
 
 CREATED PURSUANT TO THIS CHAPTER SHALL HAVE THE POWER TO: (A)  SUBPOENA,
 REQUIRE  THE  ATTENDANCE OF AND EXAMINE AND TAKE TESTIMONY UNDER OATH OF
 SUCH PERSONS AS IT DEEMS NECESSARY TO MONITOR,  AND  ENFORCE  COMPLIANCE
 WITH, A NOTE, MORTGAGE, OTHER FINANCING AGREEMENT, REGULATORY AGREEMENT,
 DEED,  LAND  DISPOSITION  AGREEMENT,  OR  RESTRICTIVE  COVENANT  WITH OR
 APPROVED BY SUCH AGENCY OR CORPORATION AND ENTERED  INTO  IN  CONNECTION
 WITH  AN  ACTION  TAKEN  PURSUANT TO THIS CHAPTER, THE GENERAL MUNICIPAL
 LAW, THE REAL PROPERTY TAX LAW, OR THE NEW YORK CITY ZONING  RESOLUTION;
 AND  (B) SUBPOENA AND REQUIRE THE PRODUCTION OF BOOKS, ACCOUNTS, PAPERS,
 DOCUMENTS AND OTHER EVIDENCE RELATED TO SUCH MONITORING AND ENFORCEMENT.
   2.  ANY PERSON WHO HAS BEEN ISSUED A SUBPOENA, OR ANY  OTHER  REQUIRE-
 MENT  TO  TESTIFY  OR PRODUCE BOOKS AND RECORDS, PURSUANT TO SUBDIVISION
 ONE OF THIS SECTION, SHALL BE REQUIRED TO COMPLY WITH SUCH  SUBPOENA  OR
 OTHER  REQUIREMENT WITHIN A REASONABLE PERIOD OF TIME ESTABLISHED BY THE
 SUPERVISING AGENCY  OR  PUBLIC  BENEFIT  CORPORATION  THAT  ISSUED  SUCH
 SUBPOENA. EACH DAY IN WHICH A PERSON FAILS TO COMPLY WITH SUCH SUBPOENA,
 OR  WITH  ANY  OTHER  SUCH  REQUIREMENT  TO TESTIFY OR PRODUCE BOOKS AND
 RECORDS, SHALL CONSTITUTE A SEPARATE  VIOLATION  OF  THIS  SECTION.  THE
 CIVIL PENALTY FOR EACH SUCH VIOLATION SHALL BE NOT MORE THAN TWO HUNDRED
 FIFTY  DOLLARS, PROVIDED THAT SUCH PENALTY SHALL NOT APPLY TO ANY PERIOD
 DURING WHICH SUCH SUBPOENA OR OTHER REQUIREMENT TO  TESTIFY  OR  PRODUCE
 BOOKS  AND  RECORDS  IS  THE  SUBJECT  OF  A PENDING JUDICIAL PROCEEDING
 COMMENCED PRIOR TO THE EXPIRATION OF THE PERIOD OF TIME  ESTABLISHED  BY
 SUCH  SUPERVISING  AGENCY  OR  PUBLIC BENEFIT CORPORATION FOR COMPLIANCE
 WITH SUCH SUBPOENA OR OTHER REQUIREMENT TO TESTIFY OR PRODUCE BOOKS  AND
 RECORDS.
   3.    ANY  SUCH  SUPERVISING  AGENCY OR PUBLIC BENEFIT CORPORATION MAY
 PROMULGATE RULES AND REGULATIONS TO CARRY OUT  THE  PROVISIONS  OF  THIS
 SECTION.
   §  613.  CHARGES.  A MUNICIPALITY, OR A SUPERVISING AGENCY THEREUNDER,
 MAY REQUIRE THE PAYMENT OF CHARGES BY  AN  OWNER  IN  CONSIDERATION  FOR
 FINANCING,  REGULATION,  SUPERVISION  AND AUDIT OF LOANS AND GRANTS MADE
 PURSUANT TO THE PROVISIONS OF THIS CHAPTER. SUCH CHARGES SHALL  BE  PAID
 INTO THE TREASURY OF THE MUNICIPALITY REQUIRING THE CHARGES AND SHALL BE
 PAID AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH MUNICIPALITY.
   §  614.  SERVICING  LOANS.  AN AGENCY MAY MAKE PROVISION IN A NOTE AND
 LOAN AGREEMENT OR BY SEPARATE AGREEMENT FOR THE PERFORMANCE OF  LOAN  OR
 GRANT  SERVICING  FUNCTIONS,  INCLUDING,  BUT  NOT LIMITED TO, FUNCTIONS
 RELATED TO LENDING OR PROVIDING A GRANT FOR CONSTRUCTION, AS MAY  GENER-
 ALLY  BE  PERFORMED  BY  AN INSTITUTIONAL LENDER. SUCH AGENCY MAY ACT IN
 SUCH CAPACITY OR APPOINT OR CONSENT TO THE APPOINTMENT  OF  A  FINANCIAL
 INSTITUTION  OR OTHER QUALIFIED ENTITY, AS DETERMINED BY SUCH AGENCY, TO
 ACT IN SUCH CAPACITY ON BEHALF OF SUCH AGENCY. SUCH  AGENCY  MAY  PAY  A
 REASONABLE  AND  CUSTOMARY  FEE  TO  SUCH FINANCIAL INSTITUTION OR OTHER
 QUALIFIED ENTITY APPOINTED BY SUCH AGENCY, OR TO WHOSE APPOINTMENT  SUCH
 AGENCY  PROVIDED  CONSENT,  FOR  THE  PERFORMANCE  OF SUCH LOAN OR GRANT
 SERVICING FUNCTIONS.
   § 29. Section 800 of the private housing finance law,  as  amended  by
 chapter 456 of the laws of 2003, is amended to read as follows:
   § 800. Policy and purposes of article. It is hereby declared and found
 that there exists in municipalities in this state substandard and insan-
 itary areas and neighborhoods characterized by undermaintained and dete-
 riorating  housing  accommodations  and  under-utilized  non-residential
 buildings and under-utilized vacant land. It is further found that there
 exists in such municipalities a  diminishing  and  seriously  inadequate
 supply  of  safe  and sanitary dwelling accommodations, particularly for
 A. 6655--A                         20
 
 persons of low income; that the loss of housing accommodations is caused
 by the inability of the ordinary unaided operations  of  private  enter-
 prise  to  make loans for rehabilitation or construction purposes or for
 conversion  which  accelerates the process of deterioration and abandon-
 ment, turning active and viable neighborhoods into  slums  and  blighted
 areas;  and  that the prevention of deterioration and loss through aban-
 donment can only be achieved by the elimination of conditions which  are
 unsafe  or detrimental to health, the replacement of antiquated heating,
 plumbing, and electrical systems and, where necessary, the overall reha-
 bilitation of certain housing accommodations, the  construction  of  new
 housing  accommodations  on vacant land and the conversion of under-uti-
 lized non-residential property to residential use, and that the unavail-
 ability of funds for the conversion of under-utilized property to  resi-
 dential   use,  for  the  preservation  and  rehabilitation  of  housing
 accommodations and for the construction of new housing accommodations on
 vacant land constitutes a threat to the health, safety and well-being of
 the persons who occupy them and denies  to  others  the  possibility  of
 living in safe and sanitary housing accommodations.
   In  order to promote the preservation and rehabilitation of such hous-
 ing accommodations, the creation of new housing  accommodations  by  the
 conversion  of  under-utilized  non-residential  property  into multiple
 dwellings and the construction of new housing accommodations  on  vacant
 land in such areas and to encourage the investment of private capital in
 such  areas,  provision  should  be  made  for a municipality to attract
 private investment for such  purposes  by  utilizing  funds,  which  are
 available  from the federal government through specific or discretionary
 grants, or are available from other financing sources, for joint partic-
 ipation loans with private investors, OR LOANS OR GRANTS BY THE  MUNICI-
 PALITY,  to  effect the required construction, rehabilitation or conver-
 sion.
   The necessity in the public interest for  the  provisions  hereinafter
 enacted is hereby declared as a matter of legislative determination.
   § 30. Subdivision 5 of section 801 of the private housing finance law,
 as  amended  by  chapter  456 of the laws of 2003, is amended to read as
 follows:
   5. "Owner" shall mean an individual, partnership, corporation or other
 entity, including a non-profit company, a mutual company, or  a  housing
 development  fund company, which holds record OR BENEFICIAL title in fee
 simple to the existing multiple dwelling  to  be  rehabilitated  or  the
 non-residential  property  to  be converted into a multiple dwelling and
 the real property upon which it is situate or to vacant land upon  which
 the  new multiple dwelling is to be constructed, OR IS THE LESSEE OF ANY
 SUCH REAL PROPERTY HAVING AN UNEXPIRED TERM OF AT LEAST THIRTY YEARS.
   § 31. Section 801 of the private housing finance  law  is  amended  by
 adding a new subdivision 5-a to read as follows:
   5-A.  "PARTICIPATION  LOAN" AND THE MUNICIPALITY'S "PARTICIPATION" IN,
 "PORTION" OF, OR "INVESTMENT" IN A LOAN, OR WORDS  OF  SIMILAR  MEANING,
 SHALL  MEAN  ANY  LOAN OR GRANT MADE BY THE MUNICIPALITY OR THE NEW YORK
 CITY HOUSING DEVELOPMENT CORPORATION PURSUANT  TO  THIS  ARTICLE  EITHER
 WITH  OR  WITHOUT A PRIVATE INVESTOR, PROVIDED, HOWEVER, THAT PROVISIONS
 OF THIS ARTICLE CONCERNING THE REPAYMENT OR FORGIVENESS OF, OR  SECURITY
 FOR, A LOAN SHALL NOT APPLY TO ANY GRANT MADE PURSUANT TO THIS ARTICLE.
   § 32. Subdivision 6 of section 801 of the private housing finance law,
 as  amended  by  chapter  456 of the laws of 2003, is amended to read as
 follows:
 A. 6655--A                         21
 
   6. "Private investor" shall mean one or  more  banking  organizations,
 foundations,  labor  unions,  credit  unions,  employers'  associations,
 veterans'  organizations,  colleges,  universities,  educational  insti-
 tutions,  child  care  institutions,  hospitals, medical research insti-
 tutes, insurance companies, trustees or fiduciaries, trustees of pension
 and  retirement  funds and systems, corporations, partnerships, individ-
 uals or other entities or any combination of the  foregoing,  and  shall
 include  the  United States of America and THE STATE OF NEW YORK AND any
 [of its agencies acting as a lender under the loan program  pursuant  to
 section  three  hundred  twelve  of  the housing act of nineteen hundred
 sixty-four and any amendments thereto or any  similar  program]  AGENCY,
 OFFICE  OR  PUBLIC BENEFIT CORPORATION THEREOF. As used in this subdivi-
 sion, the terms "trustees" and "fiduciaries" shall include any fiduciary
 or fiduciaries holding funds  for  investment,  and  the  term  "banking
 organizations"  shall  have the same meaning as in subdivision eleven of
 section two of the banking law.
   § 33. Subdivisions 1, 3 and 4 of section 802 of  the  private  housing
 finance  law, subdivisions 1 and 3 as amended by chapter 456 of the laws
 of 2003 and subdivision 4 as added by chapter 822 of the laws  of  1976,
 are amended to read as follows:
   1. (A) Notwithstanding the provisions of any general, special or local
 law,  one  or  more private investors and a municipality, acting through
 its agency, shall have the power to participate  and  invest  in  making
 loans  to  the owners of existing multiple dwellings or to the owners of
 non-residential property or to the owners of vacant land subject to  the
 limitations  of  subdivisions two through seven of this section, in such
 amounts as shall be required for (I) the rehabilitation of such existing
 multiple dwellings or for the conversion of such non-residential proper-
 ty or for the construction of [a] new multiple [dwelling]  DWELLINGS  on
 such  vacant  land,  PROVIDED  THAT  SUCH  REHABILITATION, CONVERSION OR
 CONSTRUCTION MAY INCLUDE CLIMATE RESILIENCY  IMPROVEMENTS,  and  if  any
 such  owner  acquires the existing multiple dwelling or the non-residen-
 tial property or the vacant land for the purpose of such rehabilitation,
 conversion or construction or owns the existing multiple dwelling or the
 non-residential property or the vacant land subject  to  an  outstanding
 indebtedness, such loans MAY BE MADE EXCLUSIVELY FOR OR may include such
 amounts  as  may be required for the cost of such acquisition or for the
 refinancing  of  such  outstanding  indebtedness,  (II)  PROVIDING  SITE
 IMPROVEMENTS  LOCATED  ON  THE  PROPERTY ON WHICH SUCH EXISTING MULTIPLE
 DWELLINGS ARE LOCATED OR ON SUCH NON-RESIDENTIAL PROPERTY OR VACANT LAND
 OR IN A PUBLIC RIGHT-OF-WAY, INCIDENTAL OR APPURTENANT TO SUCH REHABILI-
 TATION, CONVERSION OR CONSTRUCTION, INCLUDING, BUT NOT LIMITED TO, WATER
 AND SEWER FACILITIES, SIDEWALKS,  LANDSCAPING,  PARKS  AND  OPEN  SPACE,
 SOCIAL,  RECREATIONAL, COMMUNAL AND OTHER NON-RESIDENTIAL FACILITIES AND
 THE OUTFITTING THEREOF, THE CURING OF PROBLEMS CAUSED BY  ABNORMAL  SITE
 CONDITIONS,  EXCAVATION AND CONSTRUCTION OF FOOTINGS AND FOUNDATIONS AND
 OTHER IMPROVEMENTS ASSOCIATED WITH THE PROVISION OF  INFRASTRUCTURE  FOR
 HOUSING ACCOMMODATIONS, OR (III) PROVIDING FOR OTHER COSTS OF DEVELOPING
 HOUSING  ACCOMMODATIONS,  and  such private investors and a municipality
 may jointly participate or invest in the making of  temporary  loans  or
 advances  to  such owners in anticipation of the permanent participation
 loans for such purposes.
   (B) NOTWITHSTANDING THE PROVISIONS OF ANY GENERAL,  SPECIAL  OR  LOCAL
 LAW,  AND  IN  ADDITION TO THE POWER TO MAKE OR CONTRACT TO MAKE PARTIC-
 IPATION LOANS GRANTED BY PARAGRAPH (A) OF THIS SUBDIVISION, THE  MUNICI-
 PALITY,  ACTING THROUGH ITS AGENCY, AND THE NEW YORK CITY HOUSING DEVEL-
 A. 6655--A                         22
 
 OPMENT CORPORATION SHALL EACH HAVE THE POWER TO MAKE OR CONTRACT TO MAKE
 LOANS OR GRANTS TO ANY OWNER DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVI-
 SION WITHOUT THE PARTICIPATION OF A PRIVATE INVESTOR, ON THE SAME  TERMS
 AS PERMITTED UNDER SUCH PARAGRAPH FOR A PARTICIPATION LOAN.
   3.  [(a)]  Each  participation loan shall be secured by a bond or note
 and single participating mortgage or by  separate  bonds  or  notes  and
 mortgages  upon  the  existing  multiple dwelling or the non-residential
 property and the land upon which it is situated or, in the case  of  the
 construction  of  a  new multiple dwelling, upon the vacant land and the
 multiple dwelling to be constructed, OR,  IN  THE  CASE  OF  A  MULTIPLE
 DWELLING  HELD IN THE CONDOMINIUM FORM OF OWNERSHIP, A NOTE AND MORTGAGE
 UPON THE CONDOMINIUM UNITS REHABILITATED WITH SUCH  PARTICIPATION  LOAN,
 PROVIDED  THAT A PARTICIPATION LOAN TO AN OWNER WHO IS A LESSEE SHALL BE
 SECURED BY A LEASEHOLD INTEREST IN SUCH PROPERTY, AND provided, FURTHER,
 that each such loan shall be made upon such terms and conditions as  may
 be approved by the agency, including but not limited to, provisions that
 [(i)]  (A)  priority may be given to the payment of the principal of and
 interest on that portion of the mortgage  indebtedness  attributable  to
 participation  in  the loan by one or more private investors, [(ii)] (B)
 the interest of the municipality created as a result of  making  such  a
 mortgage  loan  may  be subordinated to the interest that one or more of
 such private investors may have upon such participation, [(iii)] (C) the
 interest of each upon such participation need not be of  equal  priority
 as  to  lien  nor  be equal as to interest rate, time or rate of amorti-
 zation of principal or time of payment of interest, or otherwise, [(iv)]
 (D) the bond or note and mortgage may provide  that  the  municipality's
 portion  of  a  participation  loan made to an owner shall be reduced to
 zero commencing in the fifteenth year after the execution of the bond or
 note and mortgage, provided that, as of the date of any such  reduction,
 such  multiple  dwelling has been and continues to be owned and operated
 in a manner consistent with a  regulatory  agreement  with  the  munici-
 pality.  Notwithstanding such provision as contained in the bond or note
 and mortgage, the municipality's portion of the loan shall be reduced to
 zero only if, prior to or simultaneously with delivery of such  bond  or
 note  and  mortgage,  the  agency made a written determination that such
 reduction would be necessary to ensure the  continued  affordability  or
 economic  viability of the multiple dwelling. Such written determination
 shall document the basis upon which the loan was determined to be eligi-
 ble for evaporation.
   [(b) The aggregate amount of each such participation  loan  shall  not
 exceed  the cost of the rehabilitation, conversion or construction, plus
 the costs of any or all undertakings necessary for the planning, financ-
 ing, acquisition, satisfaction of tax liens and  other  municipal  liens
 and  encumbrances, construction, equipment and development in connection
 therewith, provided that, if any portion of such loan is  used  for  the
 cost  of  acquisition or for refinancing, the amount of a municipality's
 portion of such loan shall not exceed one and one-half times the cost of
 rehabilitation, conversion or construction.
   (c) The amount of any such loan, together with the amount of all prior
 liens and encumbrances, shall not exceed, except in the case of  a  loan
 made to a non-profit company, a mutual company, or a housing development
 fund company, ninety per centum of value unless the agency makes a writ-
 ten  determination  that the owner has insufficient resources to pay for
 the remaining ten per centum of value, in which case such loan shall not
 exceed ninety-five per centum of value. The amount  of  any  such  loan,
 together  with the amount of all prior liens and encumbrances, made to a
 A. 6655--A                         23

 non-profit company, a mutual company,  or  a  housing  development  fund
 company  shall  not exceed value, provided that when after completion of
 such rehabilitation, conversion or construction, such multiple  dwelling
 is,  or  is  to  be operated, exclusively for the benefit of persons and
 families who are entitled to occupancy by reason of ownership  of  stock
 in  the  corporate  owners,  such loan shall not exceed ninety-eight per
 centum of value unless the agency makes a written determination that the
 owner has insufficient resources to pay for the remaining two per centum
 of value, in which case such loan shall not exceed value.]
   4. Each such bond or note and mortgage or bonds or notes and mortgages
 shall be repaid over  or  within  a  period  of  [thirty]  FORTY  years,
 PROVIDED  THAT  SUCH  PERIOD MAY BE EXTENDED AS THE AGENCY MAY DETERMINE
 NECESSARY TO ENSURE THE CONTINUED AFFORDABILITY OR ECONOMIC VIABILITY OF
 THE MULTIPLE DWELLING, in such manner as may be provided in such bond or
 note and mortgage or bonds or notes and mortgages [but in no case  shall
 the  term of such loan exceed the probable life of the multiple dwelling
 which is hereby determined to be thirty years]. Such bond  or  note  and
 mortgage  or bonds or notes and mortgages and any contract in connection
 with such permanent and temporary loans may contain such other terms and
 provisions not inconsistent with the provisions of this article  as  the
 local  legislative body or the agency may deem necessary or desirable to
 secure repayment of the loan, the interest thereon and other charges  in
 connection  therewith  and  to  carry out the purposes and provisions of
 this article.
   § 34. Subdivisions 2, 3 and 6 of section 1151 of the  private  housing
 finance law, subdivision 2 as amended by chapter 567 of the laws of 1993
 and  subdivisions  3  and 6 as added by chapter 639 of the laws of 1989,
 are amended to read as follows:
   2. "Eligible project" shall mean a project intended to  construct  new
 housing  accommodations  on  an  eligible  site  by  new construction or
 substantial rehabilitation,  PROVIDED  THAT  SUCH  NEW  CONSTRUCTION  OR
 SUBSTANTIAL  REHABILITATION MAY INCLUDE CLIMATE RESILIENCY IMPROVEMENTS.
 An eligible project shall serve the needs  of  persons  of  low  income,
 including privately-owned one to four family dwellings, condominiums and
 cooperatives, and rental projects.
   3.  ["Development costs" shall mean the reasonable and necessary costs
 for  planning,  financing,  acquisition  of  land   or   buildings   and
 construction  of  new  buildings  or the reconstruction, rehabilitation,
 repair or remodeling of existing buildings and the  costs  of  necessary
 site  improvements]  "PARTICIPATION LOAN" AND THE CITY'S "PARTICIPATION"
 IN, "PORTION" OF, OR "INVESTMENT" IN A LOAN, OR WORDS OF  SIMILAR  MEAN-
 ING,  SHALL  MEAN  ANY LOAN OR GRANT MADE BY THE AGENCY PURSUANT TO THIS
 ARTICLE EITHER WITH OR WITHOUT A PRIVATE LENDER, PROVIDED, HOWEVER, THAT
 PROVISIONS OF THIS ARTICLE CONCERNING THE REPAYMENT OR  FORGIVENESS  OF,
 OR SECURITY FOR, A LOAN SHALL NOT APPLY TO ANY GRANT.
   6.  "Loan" shall mean a [first] mortgage loan made by a private lender
 in participation with the city of New York to a sponsor for the  purpose
 of  construction  of  an  eligible project including a loan in which the
 portion of the loan funded by the agency is represented  by  a  separate
 note and mortgage.
   §  35.  Section  1152  of the private housing finance law, as added by
 chapter 639 of the laws of 1989, subdivision 4 as amended  and  subdivi-
 sion  13  as added by chapter 241 of the laws of 1998, subdivision 12 as
 added by chapter 400 of the laws of 1994 and paragraph e of  subdivision
 12  as amended by chapter 118 of the laws of 2003, is amended to read as
 follows:
 A. 6655--A                         24
 
   § 1152. Affordable housing development loans. 1.  (A)  Notwithstanding
 the provisions of any general, special or local law, one or more private
 lenders  and the city of New York, acting through the agency, shall have
 the power to participate and invest in making loans to sponsors for  the
 construction  of  eligible  projects. Such loans MAY BE MADE EXCLUSIVELY
 FOR OR may include such amounts as may be required for site  acquisition
 OR  THE  REFINANCING  OF ELIGIBLE PROJECTS. Each such participation loan
 shall be secured by a bond or note and single participating mortgage  or
 by separate bonds or notes and mortgages upon the eligible project. Such
 bond  or  note  and  mortgage or bonds or notes or mortgages may contain
 such other terms and provisions not inconsistent with the provisions  of
 this  article  as the agency may deem necessary or desirable, INCLUDING,
 BUT NOT LIMITED TO, TERMS PROVIDING THAT THE LIEN CREATED BY  SUCH  NOTE
 AND  MORTGAGE,  AND, IF APPLICABLE, ANY REGULATORY AGREEMENT EXECUTED BY
 THE SPONSOR AND SUCH AGENCY OR RESTRICTIVE  COVENANT  APPROVED  BY  SUCH
 AGENCY,  MAY  BE RECORDED IN AN EQUAL OR SUBORDINATE POSITION, OR SUBSE-
 QUENTLY MADE EQUAL OR SUBORDINATE, TO THE LIEN CREATED  BY  ANY  PRIVATE
 LENDER AGAINST SUCH ELIGIBLE PROJECT.
   (B)    NOTWITHSTANDING THE PROVISIONS OF ANY GENERAL, SPECIAL OR LOCAL
 LAW, AND IN ADDITION TO THE POWER TO MAKE OR CONTRACT  TO  MAKE  PARTIC-
 IPATION  LOANS GRANTED BY PARAGRAPH (A) OF THIS SUBDIVISION, THE CITY OF
 NEW YORK, ACTING THROUGH THE AGENCY, SHALL HAVE THE  POWER  TO  MAKE  OR
 CONTRACT TO MAKE LOANS OR GRANTS TO ANY OWNER DESCRIBED IN PARAGRAPH (A)
 OF  THIS  SUBDIVISION  WITHOUT THE PARTICIPATION OF A PRIVATE LENDER, ON
 THE SAME TERMS AS PERMITTED UNDER SUCH  PARAGRAPH  FOR  A  PARTICIPATION
 LOAN.
   2.  [The portion of such loan funded by the agency shall not exceed an
 amount equal to sixty percent of the actual total development cost of an
 eligible project.] The agency may enter into an agreement with a private
 lender to deposit its share of a loan with  the  private  lender  to  be
 advanced  by  the  private lender. The portion of the loan funded by the
 agency may be equal to or subordinate in lien to the portion of the loan
 funded by the private lender and may contain such terms with respect  to
 interest  rate,  if  any, rate of amortization of principal, if any, and
 time of payment of interest and principal as determined by  the  agency.
 The  agency may make provision either in the mortgage or mortgages or by
 separate agreement for the performance by the  private  lender  of  such
 services  as  are  generally  performed  by  a banking institution which
 itself holds a mortgage,  including,  without  limitation,  construction
 loan  advances,  construction  supervision,  initiation  of  foreclosure
 proceedings,  procurement  of  insurance,  and  all  other  matters   in
 connection  with the financing, supervision, regulation and audit of any
 such loan to any such eligible project.
   3. [If a portion of the loan is to be utilized for acquisition  of  an
 eligible  site  such portion shall in no event exceed fifteen percent of
 the total amount of such loan or the appraised value of the site, which-
 ever is the lesser.
   4.] If the eligible project is to consist of one to four unit dwelling
 accommodations or cooperative or condominium units, the  agency's  share
 of the loan may be converted after completion of construction into mort-
 gages  on such dwelling accommodations or condominium units or financing
 statements filed with respect to such cooperative shares, provided  such
 units  or such cooperative shares are purchased by persons of [eligible]
 LOW income. Such mortgages AND ANY  BLANKET  MORTGAGE  THAT  THE  AGENCY
 RETAINS  ON  ANY  PORTION  OF,  OR  ON  ALL OF, THE ELIGIBLE PROJECT may
 provide that [they] SUCH MORTGAGES AND SUCH BLANKET MORTGAGE will  auto-
 A. 6655--A                         25
 
 matically be reduced to zero over a period of continuous [owner-occupan-
 cy  of  the  housing accommodations assisted by such loan] COMPLIANCE BY
 THE MORTGAGOR WITH A REGULATORY AGREEMENT OR RESTRICTIVE  COVENANT  WITH
 OR  APPROVED  BY  THE AGENCY AND UPON THE SATISFACTION OF ANY ADDITIONAL
 CONDITIONS  SPECIFIED  THEREIN.    Notwithstanding  such  provision   as
 contained  in  such mortgage, the loan shall be reduced to zero only if,
 prior to or simultaneously with delivery of such  mortgage,  the  agency
 made  a  written determination that such reduction would be necessary to
 ensure the continued affordability or economic viability of the eligible
 project. Such written determination shall document the basis upon  which
 the  loan  was determined to be eligible for evaporation. Such period of
 continuous [owner-occupancy] COMPLIANCE WITH SUCH  REGULATORY  AGREEMENT
 OR RESTRICTIVE COVENANT shall not be less than fifteen years.
   [5.]  4.  If  the  eligible  project is to consist of one to four unit
 dwelling accommodations or cooperative or condominium units, the  agency
 shall  require  that  the  dwelling  units  be offered only to bona fide
 purchasers who intend to occupy a unit as their principal place of resi-
 dence; provided, however, that in the case of two to four unit  dwelling
 accommodations  the bona fide purchaser may occupy only a single unit as
 a principal place of residence. If the purchaser ceases  to  occupy  the
 unit  as  a  principal  place  of  residence, the agency may provide for
 recapture of all or a portion of the agency's share of the loan.
   [6.] 5. If the eligible project is  a  rental  project,  the  agency's
 share of the loan may be converted after completion of construction into
 a [non-interest bearing, non-amortizing thirty year loan] PERMANENT LOAN
 WITH A TERM OF FORTY YEARS, PROVIDED THAT SUCH PERIOD MAY BE EXTENDED AS
 THE  AGENCY  MAY DETERMINE IS NECESSARY TO ENSURE THE CONTINUED AFFORDA-
 BILITY OR ECONOMIC VIABILITY OF THE ELIGIBLE PROJECT,  payable  [at  the
 end  of  its  term, provided that such loan shall be also payable out of
 profits upon any sale or refinancing of the project prior to the end  of
 such  thirty  year period] IN SUCH MANNER AS MAY BE PROVIDED IN THE NOTE
 AND ANY MORTGAGE IN CONNECTION WITH SUCH LOAN. SUCH  NOTE  AND  MORTGAGE
 MAY  CONTAIN  SUCH TERMS AND CONDITIONS AS THE AGENCY MAY DEEM NECESSARY
 OR DESIRABLE TO EFFECTUATE THE PURPOSES AND PROVISIONS OF THIS  ARTICLE.
 The  sponsor  or  any subsequent owner or owners of such a project shall
 agree to rent such units only to persons of [eligible]  LOW  income  for
 such  [thirty  year] period [and shall agree that all] AS THE AGENCY MAY
 DETERMINE. ALL SUCH units shall  be  subject  to  THE  EMERGENCY  TENANT
 PROTECTION  ACT  OF NINETEEN SEVENTY-FOUR AND the rent stabilization law
 of nineteen hundred sixty-nine, as amended [for a period of thirty years
 after initial occupancy], unless converted to a cooperative or condomin-
 ium pursuant to subdivision [eight] SEVEN of this section. [At  the  end
 of such period each unit shall continue to be subject to such law there-
 after  until  the  first  vacancy occurs at which time the unit shall be
 decontrolled.] Initial rentals for all rental units shall be set by  the
 agency.
   [7.]  6.  If  the  eligible project is a rental project annual profits
 shall be limited to an amount set by the agency for as long as the  loan
 is  outstanding.  Excess  profits  shall  be  used  to establish project
 reserves, provide capital improvements or reduce the principal amount of
 the agency's loan, as determined by the agency.
   [8.] 7. If the eligible project is a rental project, no conversion  to
 a  cooperative  or condominium shall be permitted for a period of twenty
 years after initial occupancy, and unless (i) the agency's share of  the
 loan  is prepaid upon such conversion, (ii) the conversion shall be done
 pursuant to section three hundred fifty-two-eeee of the general business
 A. 6655--A                         26
 
 law as a non-eviction plan, and (iii) apartments  occupied  by  non-pur-
 chasing  tenants continue to be subject to the rent stabilization law of
 nineteen hundred sixty-nine as amended, until the occurrence of a vacan-
 cy.
   [9.]  8. A loan made pursuant to this article shall be exempt from the
 mortgage recording taxes imposed by article eleven of the tax law.
   [10.] 9. Notwithstanding the provisions of  any  general,  special  or
 local  law  or  charter, the agency shall have power, without soliciting
 competing bids, to contract with any sponsor or to make provision  in  a
 loan  for  the  construction  or reconstruction of any site improvements
 located in the public right-of-way OR ON THE  ELIGIBLE  SITE  which  are
 necessary for the development of an eligible project. Such site improve-
 ments  may  include,  but  shall  not be limited to, streets, sidewalks,
 LANDSCAPING, PARKS AND OPEN SPACE, SOCIAL,  RECREATIONAL,  COMMUNAL  AND
 OTHER  NON-RESIDENTIAL  FACILITIES  AND THE OUTFITTING THEREOF, lighting
 fixtures, and water and sewer lines, INCIDENTAL OR  APPURTENANT  TO  THE
 CONSTRUCTION OF SUCH ELIGIBLE PROJECTS.
   [11.]  10.  No  loan  shall be made pursuant to the provisions of this
 article unless the agency finds that: (a) the construction of the eligi-
 ble project does not directly displace current low and  moderate  income
 residents  of  the  eligible  site;  (b)  the eligible project leverages
 private and other public investment, if any, so as to reduce the  amount
 of  assistance  provided  pursuant to this article to the minimal amount
 which is necessary for construction of the  eligible  project;  (c)  the
 eligible  project  will  be built by a private developer/builder who has
 agreed to limit its profit in accordance with a formula satisfactory  to
 the  agency; (d) the eligible project will provide assistance to an area
 which is blighted or deteriorated or has a blighting  influence  on  the
 surrounding  area, or is in danger of becoming a slum or a blighted area
 because of neighborhood conditions indicating an inability or unwilling-
 ness of the private sector to cause the type of construction for which a
 loan is to be provided; and (e) the  eligible  project  will  make  home
 ownership  or  rental housing affordable to persons who cannot presently
 afford the housing available based upon the ordinary  unaided  operation
 of private enterprise.
   [12.]  11.  a.  The  agency  may make non-interest bearing advances to
 sponsors to defray the pre-development costs  of  eligible  projects  in
 accordance with the provisions of this chapter.
   b.  No  such  advances shall be made unless the agency finds that: (i)
 the sponsor proposes to finance the eligible project in whole or in part
 by a loan granted pursuant to this  article  or  that  the  project,  if
 otherwise  financed, will provide housing for persons or families of low
 income, and that such project is otherwise consistent with the  purposes
 of  this article; (ii) the project site is suitable, there is a need for
 the housing type proposed in the area to be served and  the  project  is
 feasible;  and  (iii) it is reasonable to anticipate that financing will
 be obtained and the agency makes a finding to that effect.
   c. No such advances may be made  to  a  sponsor  unless  such  sponsor
 enters  into an agreement with the agency which provides that such spon-
 sor shall be regulated with respect to  rents,  profits,  dividends  and
 disposition  of  its  property  or  franchise,  in  accordance  with the
 provisions of this article.
   d. An advance granted pursuant to this section shall be used  only  to
 defray  the  pre-development costs of eligible projects. For purposes of
 this subdivision, the term  pre-development  costs  shall  include,  but
 shall  not  be  limited to: the reasonable and necessary costs for plan-
 A. 6655--A                         27

 ning, site preparation, developing architectural drawings and conducting
 engineering and environmental studies, but shall not include acquisition
 of  land  or  buildings,  drainage  and  landscaping  of  vacant   land,
 construction of new buildings or the reconstruction or rehabilitation of
 existing buildings.
   e.  Each  such  advance  shall  be repaid in full to the agency by the
 sponsor. Such repayment shall be made upon receipt by the sponsor or its
 successor in interest of the proceeds of its  mortgage  or  construction
 loan  for the eligible project, unless the agency extends the period for
 the repayment of such advances. In no event shall the time of  repayment
 be  extended  to  a  date  later than the date of final advance of funds
 pursuant to such mortgage or  construction  loan.  Notwithstanding  this
 paragraph,  the  agency may reduce such advance to zero over a period of
 continued compliance with the agency's agreement with the sponsor pursu-
 ant to paragraph c of this subdivision if the agency has made a  written
 determination  that  such  reduction  would  be  necessary to ensure the
 continued affordability or economic viability of the  eligible  project.
 Such written determination shall document the basis upon which the agen-
 cy's  non-interest  bearing  advance  was determined eligible for evapo-
 ration.
   f. If the agency, in its discretion, determines at any time that mort-
 gage or construction financing for  the  eligible  project  may  not  be
 obtained,  then all advances made to the sponsor pursuant to this subdi-
 vision shall become immediately due and payable upon the demand  of  the
 agency.
   [13.]  12.  If  the  eligible project is a rental project, the bond or
 note and mortgage or bonds or notes or mortgages issued by  the  sponsor
 of  any eligible project to secure a participation loan may provide that
 the city's portion of such loan shall be reduced to zero  commencing  on
 the fifteenth year after the execution of such bond or note and mortgage
 or  bonds  or  notes  or mortgages, provided that, as of the date of any
 such reduction, the eligible project has been and continues to be  owned
 and operated in a manner consistent with a regulatory agreement with the
 city.  Notwithstanding  such  provision as contained in the bond or note
 and mortgage or bonds or notes or mortgages, the loan shall  be  reduced
 to  zero  only if, prior to or simultaneously with delivery of such bond
 or note and mortgage or bonds or notes or mortgages, the agency  made  a
 written  determination  that such reduction would be necessary to ensure
 the continued  affordability  or  economic  viability  of  the  eligible
 project.  Such written determination shall document the basis upon which
 the loan was determined to be eligible for evaporation.
   § 36. Paragraph (g) of subdivision 6 of section 1802 of the  New  York
 city  charter,  as amended by vote of the people of the city of New York
 at the general election held in November of 1989, is amended to read  as
 follows:
   (g)  [impose and collect] REQUIRE THE PAYMENT OF charges [and fees] IN
 CONSIDERATION for the financing, regulation, supervision  and  audit  of
 municipally-aided projects and loan programs administered by the commis-
 sioner,  which  charges  [and  fees]  shall  be  [set aside in a special
 account for administrative expenses of the  department]  PAID  INTO  THE
 TREASURY OF THE CITY AND SHALL BE PAID AND DEPOSITED IN THE GENERAL FUND
 OF THE CITY;
   §  37. This act shall take effect immediately, provided that:  (i) the
 amendments to subdivision 1 of section 696-a of  the  general  municipal
 law  made  by section two of this act shall be subject to the expiration
 and reversion of such subdivision pursuant to section 2 of  chapter  613
 A. 6655--A                         28
 
 of  the  laws of 1996, as amended, when upon such date the provisions of
 section three of this act shall take effect; and (ii) the amendments  to
 subdivision  1  of section 576-c of the private housing finance law made
 by section twenty-six of this act shall be subject to the expiration and
 reversion of such subdivision pursuant to section 2 of chapter 84 of the
 laws  of 1993, as amended, when upon such date the provisions of section
 twenty-seven of this act shall take effect.