NY State Senate Bill 2023-S1685A

Senate Bill S1685A

2023-2024 Legislative Session

Establishes the small rental housing development initiative to provide funding to eligible applicants to construct small rental housing developments in eligible areas

download bill text pdf

Current Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 07, 2024	committed to rules
May 16, 2024	advanced to third reading
May 15, 2024	2nd report cal.
May 14, 2024	1st report cal.1102
Jan 09, 2024	reported and committed to finance
Jan 03, 2024	referred to housing, construction and community development
Feb 27, 2023	reported and committed to finance
Feb 08, 2023	print number 1685a
Feb 08, 2023	amend and recommit to housing, construction and community development
Jan 13, 2023	referred to housing, construction and community development

Votes

- Jan 9, 2024 - Housing, Construction And Community Development Committee Vote
  S1685A
  
  9
  
  Aye
  
  0
  
  Nay
  
  2
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Housing, Construction And Community Development Committee Vote: Jan 9, 2024
      
      aye (9)
      
      Borrello
      
      Brisport
      
      Cleare
      
      Jackson
      
      Kavanagh
      
      May
      
      Myrie
      
      Rivera
      
      Salazar
      
      aye wr (2)
      
      Helming
      
      Martins
  Feb 27, 2023 - Housing, Construction And Community Development Committee Vote
  S1685A
  
  9
  
  Aye
  
  0
  
  Nay
  
  2
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Housing, Construction And Community Development Committee Vote: Feb 27, 2023
      
      aye (9)
      
      Borrello
      
      Brisport
      
      Cleare
      
      Jackson
      
      Kavanagh
      
      May
      
      Myrie
      
      Rivera
      
      Salazar
      
      aye wr (2)
      
      Helming
      
      Martins
  May 14, 2024 - Finance Committee Vote
  S1685A
  
  20
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  1
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Finance Committee Vote: May 14, 2024
      
      aye (20)
      
      Bailey
      
      Borrello
      
      Breslin
      
      Comrie
      
      Cooney
      
      Gallivan
      
      Gounardes
      
      Griffo
      
      Hinchey
      
      Hoylman-Sigal
      
      Krueger
      
      Liu
      
      Martins
      
      O'Mara
      
      Oberacker
      
      Rivera
      
      Salazar
      
      Skoufis
      
      Stavisky
      
      Thomas
      
      absent (1)
      
      Parker

Bill Amendments

Original

A (Active)

2023-S1685 - Details

See Assembly Version of this Bill:: A2956
Current Committee:: Senate Rules
Law Section:: Private Housing Finance Law
Laws Affected:: Add Art 17-C §§1060 - 1062, Priv Hous Fin L
Versions Introduced in 2021-2022 Legislative Session:: S9356, A10517

2023-S1685 - Summary

Establishes the small rental housing development initiative to provide funding to eligible applicants to construct small rental housing developments in eligible areas.

2023-S1685 - Sponsor Memo

                                 
BILL NUMBER: S1685

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the private housing finance law, in relation to estab-
lishing the small rental housing development initiative

 
PURPOSE OF THE BILL:

The purpose of the bill is to codify the Small Rental Housing Develop-
ment initiative and set edibility and define parameters for the
program's implementation.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill amends the private housing finance law by adding a
new Article 17-C that provides a statement of legislative findings and
purpose, defines key terms, and provides certain parameters for the
implementation of the Small Rental Housing Development Initiative.

Section 2 of the bill sets the effective date.

 
JUSTIFICATION:

The Small Rental Housing Development initiative is a sorely needed fund-
ing source to develop affordable rental housing of 20 units or less in
rural communities throughout the state. The FY 2022-23 budget provided
$7M in funding to the initiative, but it failed to provide detailed
parameters addressing eligibifty requirements and Invlementation.  Rural
communities, like many other parts of the country, face an affordable
housing shortage, plus they face additional hurdles in developing rental
projects scaled appropriately for the size of their communities. Many
rural communities lack the water and sewer infrastructure needed to
support larger rental housing developments, the type that receive fund-
ing from a variety of sources, including federal, state, and private
investment (through low income housing tax credits). For that reason,
funding sources for rural community developments are fewer. This Small
Rental Housing Development initiative was specific* created to fiN an
unmet need for rural communities, as it can meet the dual needs of
creating affordable housing for current residents and attracting and
retaining workers for employers looking to expand or relocate into rural
communities. This biN targets funding to eligible projects located in
towns or cities with a population of thirty thousand or less.

 
PRIOR LEGISLATIVE HISTORY:

05/31/22 S9356A - PRINT NUMBER 9356A

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S1685 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1685
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 13, 2023
                                ___________
 
 Introduced  by  Sen. HINCHEY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN  ACT  to amend the private housing finance law, in relation to estab-
   lishing the small rental housing development initiative

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. The private housing finance law is amended by adding a new
 article 17-C to read as follows:
                              ARTICLE XVII-C
                SMALL RENTAL HOUSING DEVELOPMENT INITIATIVE
 SECTION 1060. LEGISLATIVE FINDINGS AND STATEMENT OF POLICY.
         1061. DEFINITIONS.
         1062. SMALL RENTAL HOUSING DEVELOPMENT INITIATIVE.
   § 1060. LEGISLATIVE FINDINGS AND STATEMENT OF POLICY. THE  LEGISLATURE
 HEREBY  FINDS  AND DECLARES THAT THERE EXISTS IN MANY RURAL AREAS OF THE
 STATE A SUBSTANTIAL NEED FOR AFFORDABLE RENTAL HOUSING OF A SIZE THAT IS
 SUITABLE TO SMALL COMMUNITIES WITH LIMITED INFRASTRUCTURE. THE  FINDINGS
 SET  FORTH  IN  ARTICLE  SEVENTEEN  OF THIS CHAPTER, WITH RESPECT TO THE
 SPECIAL NEEDS AND PROBLEMS OF SUCH AREAS AND THE  SIGNIFICANT  POTENTIAL
 ROLE  OF  LOCALLY  BASED NOT-FOR-PROFIT ORGANIZATIONS IN HELPING TO MEET
 SUCH NEEDS, ARE HEREBY REAFFIRMED.  THE  LEGISLATURE  HEREBY  DETERMINES
 THAT,  IN  ADDITION  TO  THE  PROGRAM  OF STATE SUPPORT TO HELP MEET THE
 ADMINISTRATIVE EXPENSES OF SUCH ORGANIZATIONS UNDER ARTICLE SEVENTEEN OF
 THIS CHAPTER, A FURTHER PUBLIC NEED EXISTS FOR  STATE  FUNDING  FOR  THE
 DEVELOPMENT OF AFFORDABLE RENTAL HOUSING OF TWENTY UNITS OR LESS.  IT IS
 THE  PURPOSE OF THIS ARTICLE TO ENCOURAGE THE CONSTRUCTION OF AFFORDABLE
 RENTAL HOUSING IN THE RURAL AREAS OF THE STATE BY ESTABLISHING  A  DEDI-
 CATED PROGRAM OF SUCH FUNDING.
   §  1061.  DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05740-01-3

 S. 1685                             2
 
   1. "SMALL RENTAL HOUSING DEVELOPMENTS" SHALL  MEAN  AFFORDABLE  RENTAL
 APARTMENT  BUILDINGS  OF TWENTY UNITS OR LESS FOR LOW TO MODERATE INCOME
 HOUSEHOLDS.
   2.  "ELIGIBLE  AREA"  SHALL  MEAN  A TOWN OR CITY WITH A POPULATION OF
 THIRTY THOUSAND OR LESS.
   3. "ELIGIBLE APPLICANT" SHALL MEAN A NON-PROFIT HOUSING AGENCY SUCH AS
 A RURAL PRESERVATION OR NEIGHBORHOOD COMPANY OR OTHER SIMILAR NON-PROFIT
 ENTITY CHARTERED BY THE STATE.
   4. "LOW TO MODERATE-INCOME HOUSEHOLD" SHALL MEAN A HOUSEHOLD  WITH  UP
 TO ONE HUNDRED TWENTY PERCENT OF AREA MEDIAN INCOME.
   5.  "PERIOD OF AFFORDABILITY" SHALL MEAN THE REQUIRED LENGTH OF TIME A
 PROJECT  MUST  MEET  AFFORDABILITY  REQUIREMENTS  PURSUANT  TO  24   CFR
 92.254(E) AND TO BE SPECIFIED IN THE PROJECT NOTE AND MORTGAGE.
   §  1062.  SMALL  RENTAL  HOUSING DEVELOPMENT INITIATIVE. 1. APPLICANTS
 CONSTRUCTING SMALL RENTAL HOUSING DEVELOPMENTS IN ELIGIBLE  AREAS  SHALL
 BE  ELIGIBLE  FOR  STATE  FUNDING  IN THE FORM OF DEFERRED LOANS AT ZERO
 PERCENT INTEREST LOANS, DUE ON SALE. SUCH ZERO  INTEREST  LOANS  MAY  BE
 SUBJECT  TO FORGIVENESS IN ACCORDANCE WITH THE PROVISIONS OF SUBDIVISION
 TWO OF THIS SECTION.
   (A) THE ELIGIBLE APPLICANT SHALL CHOOSE A PAYBACK PERIOD FOR SUCH LOAN
 OF BETWEEN TEN AND TWENTY YEARS.
   (B) THE MAXIMUM PER-UNIT SUBSIDY SHALL BE DETERMINED  BY  THE  COMMIS-
 SIONER.
   (C)  FUNDS SHALL BE USED FOR THE CONSTRUCTION OF RESIDENTIAL UNITS AND
 MAY BE USED FOR THE CONSTRUCTION OF COMMUNITY ROOMS OR COMMON AREAS USED
 FOR THE BENEFIT OF RESIDENTS.
   2.  (A) ZERO INTEREST LOANS ISSUED IN ACCORDANCE WITH SUBDIVISION  ONE
 OF  THIS  SECTION  SHALL BE DEFERRED FOR THE PERIOD OF AFFORDABILITY. IF
 THE ELIGIBLE APPLICANT, WHO IS THE RECIPIENT OF A  ZERO  INTEREST  LOAN,
 REMAINS  IN COMPLIANCE WITH ALL PROGRAM REQUIREMENTS FOR THE ENTIRETY OF
 THE PERIOD OF AFFORDABILITY, THE ZERO INTEREST LOAN MAY BE FORGIVEN  AND
 THE MORTGAGE LIEN PLACED AGAINST THE PROPERTY MAY BE SATISFIED.
   (B) IF THE PROPERTY OF AN ELIGIBLE APPLICANT IS SOLD DURING THE PERIOD
 OF  AFFORDABILITY,  THE SUM OF ANY OUTSTANDING MORTGAGE MUST BE RE-PAID.
 THE MORTGAGE LIEN MAY BE ASSUMED BY A NEW PURCHASER ONLY IF APPROVED  BY
 THE  HOUSING  TRUST  FUND  CORPORATION,  SUBJECT  TO  ANY  CONDITIONS OR
 REQUIREMENTS SET BY THE HOUSING TRUST FUND CORPORATION.
   (C) THE RENTAL MANAGEMENT REQUIREMENTS OF  THE  SMALL  RENTAL  HOUSING
 INITIATIVE  SHALL  RUN  WITH THE PROPERTY THROUGHOUT THE ENTIRETY OF THE
 PERIOD OF AFFORDABILITY, REGARDLESS OF ANY CHANGE IN OWNERSHIP.
   (D) AWARDS MADE UNDER THIS PROGRAM SHALL BE PURSUANT TO  A  REGULATORY
 AGREEMENT,  INCLUDING RENT SETTING AND ANY AND ALL RENT INCREASES DURING
 THE AFFORDABILITY PERIOD.
   3. THE DIVISION OF HOUSING AND  COMMUNITY  RENEWAL  SHALL  NOTIFY,  IN
 WRITING, ALL APPLICANTS WHO WERE NOT SELECTED FOR FUNDING OF THE REASONS
 WHY  THE  PROPOSAL  WAS  NOT FUNDED, INCLUDING THE DESIGN, UNDERWRITING,
 LEGAL OR PROGRAM DEFICIENCIES, DEFICIENCIES OF ANY DOCUMENTS AND/OR  THE
 BASIS  UPON  WHICH  THE  APPLICATION WAS DETERMINED TO BE INELIGIBLE FOR
 FUNDING.
   4. THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE FOR THE
 REVIEW, AT PERIODIC INTERVALS NOT LESS THAN ANNUALLY, OF THE PERFORMANCE
 OF APPLICANTS RECEIVING GRANTS OR LOANS PURSUANT TO THIS  ARTICLE.  SUCH
 REVIEW  SHALL,  AMONG  OTHER THINGS, BE FOR THE PURPOSES OF ASCERTAINING
 THE CONFORMITY TO AGREEMENT PROVISIONS, AND  ADHERENCE  TO  REGULATIONS.
 AGREEMENTS  ENTERED  INTO PURSUANT TO THIS ARTICLE MAY BE TERMINATED AND
 FUNDS MAY BE WITHHELD OR RECAPTURED  BY  THE  DIVISION  OF  HOUSING  AND
 S. 1685                             3
 
 COMMUNITY RENEWAL UPON A FINDING OF SUBSTANTIAL NONPERFORMANCE OR BREACH
 BY SUCH APPLICANT UNDER ITS AGREEMENT.
   5.  THE  DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL DEVELOP ADDI-
 TIONAL PROCEDURES AND REQUIREMENTS RELATED TO THE APPLICATION AND  AWARD
 OF  FUNDING FOR PROJECTS PURSUANT TO THIS ARTICLE AS DEEMED NECESSARY OR
 APPROPRIATE TO IMPLEMENT THE PURPOSES AND PROVISIONS OF THIS ARTICLE.
   § 2. This act shall take effect immediately.

co-Sponsors

2023-S1685A (ACTIVE) - Details

See Assembly Version of this Bill:: A2956
Current Committee:: Senate Rules
Law Section:: Private Housing Finance Law
Laws Affected:: Add Art 17-C §§1060 - 1062, Priv Hous Fin L
Versions Introduced in 2021-2022 Legislative Session:: S9356, A10517

2023-S1685A (ACTIVE) - Summary

Establishes the small rental housing development initiative to provide funding to eligible applicants to construct small rental housing developments in eligible areas.

2023-S1685A (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S1685A

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the private housing finance law, in relation to estab-
lishing the small rental housing development initiative

 
PURPOSE OF THE BILL:

The purpose of the bill is to codify the Small Rental Housing Develop-
ment Initiative and set eligibility and define parameters for the
program's implementation.

 
SUMMARY OF SPECIFIC PROVISIONS:

  Section 1 of the bill amends the private housing finance law by adding
a new Article 17-C that provides a statement of legislative findings and
purpose,  defines  key  terms,  and  provides certain parameters for the
implementation of the Small Rental Housing Development Initiative.

  Section 2 of the bill sets the effective date.

 
JUSTIFICATION:

The Small Rental Housing Development Initiative is a sorely needed fund-
ing source to develop affordable rental housing of 20 units or  less  in
rural  communities  throughout the state. The FY 2022-23 budget provided
$7M in funding to the initiative, but  it  failed  to  provide  detailed
parameters addressing eligibility requirements and implementation. Rural
communities,  like  many  other parts of the country, face an affordable
housing shortage, plus they face additional hurdles in developing rental
projects scaled appropriately for the size of  their  communities.  Many
rural  communities  lack  the  water  and sewer infrastructure needed to
support larger rental housing developments, the type that receive  fund-
ing  from  a  variety  of sources, including federal, state, and private
investment (through low income housing tax credits).  For  that  reason,
funding  sources  for rural community developments are fewer. This Small
Rental Housing Development Initiative was specifically created  to  fill
an  unmet  need  for rural communities, as it can meet the dual needs of
creating affordable housing for current  residents  and  attracting  and
retaining workers for employers looking to expand or relocate into rural
communities.  This  bill targets funding to eligible projects located in
towns or cities with a population of thirty thousand or less.

 
PRIOR LEGISLATIVE HISTORY

05/31/22 S9356A - PRINT NUMBER 9356A

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S1685A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  1685--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 13, 2023
                                ___________
 
 Introduced  by  Sen. HINCHEY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community  Development  -- committee discharged, bill amended, ordered
   reprinted as amended and recommitted to said committee
 
 AN ACT to amend the private housing finance law, in relation  to  estab-
   lishing the small rental housing development initiative
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The private housing finance law is amended by adding a  new
 article 17-C to read as follows:
                              ARTICLE XVII-C
                SMALL RENTAL HOUSING DEVELOPMENT INITIATIVE
 SECTION 1060. LEGISLATIVE FINDINGS AND STATEMENT OF POLICY.
         1061. DEFINITIONS.
         1062. SMALL RENTAL HOUSING DEVELOPMENT INITIATIVE.
   §  1060. LEGISLATIVE FINDINGS AND STATEMENT OF POLICY. THE LEGISLATURE
 HEREBY FINDS AND DECLARES THAT THERE EXISTS IN MANY RURAL AREAS  OF  THE
 STATE A SUBSTANTIAL NEED FOR AFFORDABLE RENTAL HOUSING OF A SIZE THAT IS
 SUITABLE  TO SMALL COMMUNITIES WITH LIMITED INFRASTRUCTURE. THE FINDINGS
 SET FORTH IN ARTICLE SEVENTEEN OF THIS  CHAPTER,  WITH  RESPECT  TO  THE
 SPECIAL  NEEDS  AND PROBLEMS OF SUCH AREAS AND THE SIGNIFICANT POTENTIAL
 ROLE OF LOCALLY BASED NOT-FOR-PROFIT ORGANIZATIONS IN  HELPING  TO  MEET
 SUCH  NEEDS,  ARE  HEREBY  REAFFIRMED. THE LEGISLATURE HEREBY DETERMINES
 THAT, IN ADDITION TO THE PROGRAM OF  STATE  SUPPORT  TO  HELP  MEET  THE
 ADMINISTRATIVE EXPENSES OF SUCH ORGANIZATIONS UNDER ARTICLE SEVENTEEN OF
 THIS  CHAPTER,  A  FURTHER  PUBLIC NEED EXISTS FOR STATE FUNDING FOR THE
 DEVELOPMENT OF AFFORDABLE RENTAL HOUSING OF TWENTY UNITS OR LESS.  IT IS
 THE PURPOSE OF THIS ARTICLE TO ENCOURAGE THE CONSTRUCTION OF  AFFORDABLE
 RENTAL  HOUSING  IN THE RURAL AREAS OF THE STATE BY ESTABLISHING A DEDI-
 CATED PROGRAM OF SUCH FUNDING.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05740-03-3
 S. 1685--A                          2

 
   § 1061. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE,  THE  FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "SMALL  RENTAL  HOUSING DEVELOPMENTS" SHALL MEAN AFFORDABLE RENTAL
 APARTMENT BUILDINGS OF TWENTY UNITS OR LESS FOR LOW TO  MODERATE  INCOME
 HOUSEHOLDS.
   2.  "ELIGIBLE  AREA"  SHALL  MEAN  A TOWN OR CITY WITH A POPULATION OF
 THIRTY THOUSAND OR LESS.
   3. "ELIGIBLE APPLICANT" SHALL MEAN A NON-PROFIT HOUSING AGENCY SUCH AS
 A RURAL PRESERVATION OR NEIGHBORHOOD COMPANY OR OTHER SIMILAR NON-PROFIT
 ENTITY CHARTERED BY THE STATE.
   4. "LOW TO MODERATE-INCOME HOUSEHOLD" SHALL MEAN A HOUSEHOLD  WITH  UP
 TO ONE HUNDRED TWENTY PERCENT OF AREA MEDIAN INCOME.
   5.  "PERIOD OF AFFORDABILITY" SHALL MEAN THE REQUIRED LENGTH OF TIME A
 PROJECT  MUST  MEET  AFFORDABILITY  REQUIREMENTS  PURSUANT  TO  24   CFR
 92.252(E) AND TO BE SPECIFIED IN THE PROJECT NOTE AND MORTGAGE.
   §  1062.  SMALL  RENTAL  HOUSING DEVELOPMENT INITIATIVE. 1. APPLICANTS
 CONSTRUCTING SMALL RENTAL HOUSING DEVELOPMENTS IN ELIGIBLE  AREAS  SHALL
 BE  ELIGIBLE  FOR  STATE  FUNDING  IN THE FORM OF DEFERRED LOANS AT ZERO
 PERCENT INTEREST LOANS, DUE ON SALE. SUCH ZERO  INTEREST  LOANS  MAY  BE
 SUBJECT  TO FORGIVENESS IN ACCORDANCE WITH THE PROVISIONS OF SUBDIVISION
 TWO OF THIS SECTION.
   (A) THE ELIGIBLE APPLICANT SHALL CHOOSE A PAYBACK PERIOD FOR SUCH LOAN
 OF BETWEEN TEN AND TWENTY YEARS.
   (B) THE MAXIMUM PER-UNIT SUBSIDY SHALL BE DETERMINED  BY  THE  COMMIS-
 SIONER.
   (C)  FUNDS SHALL BE USED FOR THE CONSTRUCTION OF RESIDENTIAL UNITS AND
 MAY BE USED FOR THE CONSTRUCTION OF COMMUNITY ROOMS OR COMMON AREAS USED
 FOR THE BENEFIT OF RESIDENTS.
   2.  (A) ZERO INTEREST LOANS ISSUED IN ACCORDANCE WITH SUBDIVISION  ONE
 OF  THIS  SECTION  SHALL BE DEFERRED FOR THE PERIOD OF AFFORDABILITY. IF
 THE ELIGIBLE APPLICANT, WHO IS THE RECIPIENT OF A  ZERO  INTEREST  LOAN,
 REMAINS  IN COMPLIANCE WITH ALL PROGRAM REQUIREMENTS FOR THE ENTIRETY OF
 THE PERIOD OF AFFORDABILITY, THE ZERO INTEREST LOAN MAY BE FORGIVEN  AND
 THE MORTGAGE LIEN PLACED AGAINST THE PROPERTY MAY BE SATISFIED.
   (B) IF THE PROPERTY OF AN ELIGIBLE APPLICANT IS SOLD DURING THE PERIOD
 OF  AFFORDABILITY,  THE SUM OF ANY OUTSTANDING MORTGAGE MUST BE RE-PAID.
 THE MORTGAGE LIEN MAY BE ASSUMED BY A NEW PURCHASER ONLY IF APPROVED  BY
 THE  HOUSING  TRUST  FUND  CORPORATION,  SUBJECT  TO  ANY  CONDITIONS OR
 REQUIREMENTS SET BY THE HOUSING TRUST FUND CORPORATION.
   (C) THE RENTAL MANAGEMENT REQUIREMENTS OF  THE  SMALL  RENTAL  HOUSING
 INITIATIVE  SHALL  RUN  WITH THE PROPERTY THROUGHOUT THE ENTIRETY OF THE
 PERIOD OF AFFORDABILITY, REGARDLESS OF ANY CHANGE IN OWNERSHIP.
   (D) AWARDS MADE UNDER THIS PROGRAM SHALL BE PURSUANT TO  A  REGULATORY
 AGREEMENT,  INCLUDING RENT SETTING AND ANY AND ALL RENT INCREASES DURING
 THE AFFORDABILITY PERIOD.
   3. THE DIVISION OF HOUSING AND  COMMUNITY  RENEWAL  SHALL  NOTIFY,  IN
 WRITING, ALL APPLICANTS WHO WERE NOT SELECTED FOR FUNDING OF THE REASONS
 WHY  THE  PROPOSAL  WAS  NOT FUNDED, INCLUDING THE DESIGN, UNDERWRITING,
 LEGAL OR PROGRAM DEFICIENCIES, DEFICIENCIES OF ANY DOCUMENTS AND/OR  THE
 BASIS  UPON  WHICH  THE  APPLICATION WAS DETERMINED TO BE INELIGIBLE FOR
 FUNDING.
   4. THE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL PROVIDE FOR THE
 REVIEW, AT PERIODIC INTERVALS NOT LESS THAN ANNUALLY, OF THE PERFORMANCE
 OF APPLICANTS RECEIVING GRANTS OR LOANS PURSUANT TO THIS  ARTICLE.  SUCH
 REVIEW  SHALL,  AMONG  OTHER THINGS, BE FOR THE PURPOSES OF ASCERTAINING
 THE CONFORMITY TO AGREEMENT PROVISIONS, AND  ADHERENCE  TO  REGULATIONS.
 S. 1685--A                          3
 
 AGREEMENTS  ENTERED  INTO PURSUANT TO THIS ARTICLE MAY BE TERMINATED AND
 FUNDS MAY BE WITHHELD OR RECAPTURED  BY  THE  DIVISION  OF  HOUSING  AND
 COMMUNITY RENEWAL UPON A FINDING OF SUBSTANTIAL NONPERFORMANCE OR BREACH
 BY SUCH APPLICANT UNDER ITS AGREEMENT.
   5.  THE  DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL DEVELOP ADDI-
 TIONAL PROCEDURES AND REQUIREMENTS RELATED TO THE APPLICATION AND  AWARD
 OF  FUNDING FOR PROJECTS PURSUANT TO THIS ARTICLE AS DEEMED NECESSARY OR
 APPROPRIATE TO IMPLEMENT THE PURPOSES AND PROVISIONS OF THIS ARTICLE.
   § 2. This act shall take effect immediately.

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