Legislation
SECTION 2428
Insurance of mortgages
Public Authorities (PBA) CHAPTER 43-A, ARTICLE 8, TITLE 17, PART 2
§ 2428 Insurance of mortgages. 1. The agency is authorized, subject to
the provisions of this article, to make commitments to insure and to
contract to insure mortgage loans eligible for insurance hereunder.
* 1-a. The agency may issue commitments to provide and may provide
pool insurance in an amount not in excess of twenty-five percent of the
outstanding principal indebtedness at the time of commitment of any
aggregate of mortgage loans or with respect to mortgage loans acquired
pursuant to section twenty-four hundred five-b of this title,
twenty-five percent of the initial principal indebtedness of any
aggregate of mortgage loans.
* NB Repealed July 23, 2025
2. The agency shall limit its insurance on a rehabilitation or
preservation loan to an amount not in excess of fifty per centum of the
outstanding principal indebtedness, provided, however, that the agency
may insure an amount not in excess of seventy-five per centum of the
outstanding principal indebtedness of a rehabilitation loan if it shall
find, pursuant to rules or regulations which it shall establish that the
extent of rehabilitation is sufficient to justify such additional
insurance, provided further, however, that the agency may insure an
amount equal to the full outstanding principal indebtedness when the
loan has been made by a public benefit corporation of the state of New
York which public benefit corporation has issued or will issue bonds or
notes, some or all of the proceeds of which bonds or notes were used or
will be used to make such loan, or when the loan has been made by a
public employee pension fund.
However, the sum of the percentage of any mortgage loan insured by the
agency and the percentage of such loan insured or to be insured by any
other party shall not exceed one hundred per centum of the outstanding
principal indebtedness.
* 2-a. The agency may issue a commitment to provide and may insure a
preservation loan in an amount equal to the full outstanding principal
indebtedness of such preservation loan if: (a) the existing indebtedness
shall have been originated during the period from January first, two
thousand four through December thirty-first, two thousand eight; (b) the
amount of each insured preservation loan shall not exceed one hundred
fifty million dollars; (c) such preservation loan shall preserve or
create affordable housing accommodations; and (d) the preservation loan
shall have been made by a public benefit corporation of the state of New
York which public benefit corporation has issued or will issue bonds or
notes, some or all of the proceeds of which bonds or notes shall have
been, or will be, used to make such preservation loan, or the
preservation loan shall have been made by a public employee pension
fund.
* NB Repealed July 23, 2025
* 3. Except for pool insurance, and except as otherwise provided in
subdivision three-a of this section, the agency shall not issue a
commitment to insure nor shall it insure any loan unless it shall first
find (a) that the property which is the security for such loan is
located in a neighborhood characterized by a deficiency of available
mortgage financing; (b) that such deficiency has caused or threatens to
cause undermaintained and deteriorating housing accommodations and
substandard and insanitary neighborhoods; (c) that the granting of such
loan will aid in the preservation or rehabilitation of the neighborhood
in which such property is located; (d) if the property which is the
security for such loan is not a housing accommodation, that the granting
of such loan will assist in preventing the deterioration of housing
accommodations in the neighborhood in which such property is located;
(e) that the sum of (i) twenty percentum or such percentum as may be
established by the board of the agency pursuant to subdivision seven of
this section, of the amount of such loan which is to be insured, plus
(ii) the amount of the mortgage insurance fund requirement for the
category of loan does not exceed the amount available in the special
account; and (f) that the property which is the security for such loan
meets such other requirements as the agency may from time to time
establish by guidelines adopted by the agency.
The agency shall not issue a commitment to provide pool insurance nor
shall it provide such insurance unless it shall first find (a) that the
sum of (i) twenty per centum, or such per centum as may be established
by the board of the agency pursuant to subdivision seven of this
section, of the amount of such loans or aggregate of loans which is to
be insured, plus (ii) the amount of the mortgage insurance fund
requirement for the category of loan does not exceed the amount
available in the pool insurance account; and (b) that the property which
is the security for such loan or loans meets such other requirements as
the agency may from time to time establish by guidelines adopted by the
agency.
The agency may issue a commitment to insure and may insure an existing
loan, first when an application for such mortgage insurance is pending
prior to the making of a loan, when significant circumstances beyond the
reasonable control of the mortgagor and mortgagee necessitate the making
of the loan prior to the issuance of the commitment to insure and when
it is determined by the agency that such loan would not have been made
except for the reasonable expectation that the agency would insure the
loan, or second, as part of a transaction in which the financial
institution requesting insurance makes additional loan or loans which
qualify for insurance by the agency, in accordance with provisions of
this section and requirements established by the agency, in a total
amount such that the uninsured portion of such additional loan or loans
equals or exceeds the insured portion of such existing loan or loans.
* NB Effective until July 23, 2025
* 3. The agency shall not issue a commitment to insure nor shall it
insure any loan unless it shall first find (a) that the property which
is the security for such loan is located in a neighborhood characterized
by a deficiency of available mortgage financing; (b) that such
deficiency has caused or threatens to cause undermaintained and
deteriorating housing accommodations and substandard and insanitary
neighborhoods; (c) that the granting of such loan will aid in the
preservation or rehabilitation of the neighborhood in which such
property is located; (d) if the property which is the security for such
loan is not a housing accommodation, that the granting of such loan will
assist in preventing the deterioration of housing accommodations in the
neighborhood in which such property is located; (e) that the sum of (i)
twenty percentum or such percentum as may be established by the board of
the agency pursuant to subdivision seven of this section, of the amount
of such loan which is to be insured, plus (ii) the amount of the
mortgage insurance fund requirement for the category of loan does not
exceed the amount available in the special account; and (f) that the
property which is the security for such loan meets such other
requirements as the agency may from time to time establish by rules and
regulations.
The agency may issue a commitment to insure and may insure an existing
loan, first when an application for such mortgage insurance is pending
prior to the making of a loan, when significant circumstances beyond the
reasonable control of the mortgagor and mortgagee necessitate the making
of the loan prior to the issuance of the commitment to insure and when
it is determined by the agency that such loan would not have been made
except for the reasonable expectation that the agency would insure the
loan, or second, as part of a transaction in which the financial
institution requesting insurance makes additional loan or loans which
qualify for insurance by the agency, in accordance with provisions of
this section and requirements established by the agency, in a total
amount such that the uninsured portion of such additional loan or loans
equals or exceeds the insured portion of such existing loan or loans.
* NB Effective July 23, 2025
* 3-a. The agency may issue a commitment to insure and may insure any
loans or aggregate of loans and may issue a commitment to provide and
may provide mortgage pool insurance on any loans or aggregate of loans,
notwithstanding the criteria set forth in subparagraph (a), (b), (c) or
(d) of the opening paragraph of subdivision three of this section
provided that it shall find that the property which is the security for
such loan or loans is either: (a) located within an empire zone
designated pursuant to article eighteen-B of the general municipal law,
or (b) will provide affordable housing, or (c) the entity providing the
project's mortgage financing was or is created by local, state or
federal legislation and certifies to the agency that the project meets
the program criteria applicable to such entity, or (d) providing a
retail or community service facility that would not otherwise be
provided.
* NB Repealed July 23, 2025
3-b. Notwithstanding any other provision of law to the contrary, when
such insurance is not available through the private market the agency
may insure reverse mortgage loans which meet the following conditions:
(a) the authorized lender requires primary mortgage insurance on the
real property and the applicant is unable to procure such mortgage
insurance in the private market;
(b) the reverse mortgage loan is issued pursuant to section two
hundred eighty or two hundred eighty-a of the real property law;
(c) the reverse mortgage loan amount shall not exceed the loan to
value ratio as may be determined by the superintendent of financial
services; and
(d) the real property which is the security for such reverse mortgage
loan meets such other requirements as the agency may from time to time
establish.
* 4. To be eligible for insurance under this article, a mortgage loan
shall (a) (i) be a first lien of the kind which is commonly given to
secure advances on, or the unpaid purchase price of, real property, or
tangible personal property constituting modular or manufactured housing
in the case of mortgage loans purchased by the agency under its forward
commitment program, under the laws of the state together with any credit
instrument secured thereby, provided, however, that a mortgage loan may
be a second lien if such mortgage loan was purchased by the agency or
(ii) be secured by an assignment or transfer of stock certificates or
other evidence of ownership interest of the borrower in, and a
proprietary lease from, a corporation formed for the purpose of the
cooperative ownership of residential real estate in the state; (b)
secure a rehabilitation or preservation loan on real property held in
fee simple or on a leasehold under a proprietary lease or a lease having
a period of years to run at the time the mortgage is insured under this
article of at least twenty per centum greater duration than the
remaining term of the mortgage; (c) contain terms with respect to
prepayment, insurance, repairs, alterations, payment of taxes, special
assessments, service charges, default reserves, delinquency charges,
foreclosure proceedings, additional and secondary liens, and such other
matters as the agency may in its discretion prescribe; (d) be
accompanied by certificates, issued by such officers of the mortgage
financial institutions, independent appraisers or other persons as the
agency may require, certifying that (i) where appropriate, the annual
income to be derived from the property equals not less than one hundred
and five per centum of the annual charges and expenses, including
provision for reserves, satisfactory to the agency, for the amortization
of subordinate mortgage loans over the remaining terms of such loans
notwithstanding the provisions thereof; (ii) the remaining useful life
of the property is greater than the term of the mortgage; and (iii) the
property does not contain any substantial violations of local building
maintenance and construction codes, except that in the case of a loan
made to the owner of a property containing any such violations, the
agency may insure or commit to insure such loan if the mortgagee and the
owner have submitted a plan, satisfactory to the agency to eliminate
such violations and the issuance of such insurance shall be conditioned
on removal of such violations to the satisfaction of the local code
enforcement agency; and (e) satisfy such additional terms and conditions
as the agency may prescribe. For pool insurance, the requirements of
paragraph (b) of this subdivision shall not be applicable.
* NB Effective until July 23, 2025
* 4. To be eligible for insurance under this article, a mortgage loan
shall (a) (i) be a first lien of the kind which is commonly given to
secure advances on, or the unpaid purchase price of, real property under
the laws of the state together with any credit instrument secured
thereby, provided, however, that a mortgage loan may be a second lien if
such mortgage loan was purchased by the agency or (ii) be secured by an
assignment or transfer of stock certificates or other evidence of
ownership interest of the borrower in, and a proprietary lease from, a
corporation formed for the purpose of the cooperative ownership of
residential real estate in the state; (b) secure a rehabilitation or
preservation loan on real property held in fee simple or on a leasehold
under a proprietary lease or a lease having a period of years to run at
the time the mortgage is insured under this article of at least twenty
per centum greater duration than the remaining term of the mortgage; (c)
contain terms with respect to prepayment, insurance, repairs,
alterations, payment of taxes, special assessments, service charges,
default reserves, delinquency charges, foreclosure proceedings,
additional and secondary liens, and such other matters as the agency may
in its discretion prescribe; (d) be accompanied by certificates, issued
by such officers of the mortgage financial institutions, independent
appraisers or other persons as the agency may require, certifying that
(i) where appropriate, the annual income to be derived from the property
equals not less than one hundred and five per centum of the annual
charges and expenses, including provision for reserves, satisfactory to
the agency, for the amortization of subordinate mortgage loans over the
remaining terms of such loans notwithstanding the provisions thereof;
(ii) the remaining useful life of the property is greater than the term
of the mortgage; and (iii) the property does not contain any substantial
violations of local building maintenance and construction codes, except
that in the case of a loan made to the owner of a property containing
any such violations, the agency may insure or commit to insure such loan
if the mortgagee and the owner have submitted a plan, satisfactory to
the agency to eliminate such violations and the issuance of such
insurance shall be conditioned on removal of such violations to the
satisfaction of the local code enforcement agency; and (e) satisfy such
additional terms and conditions as the agency may prescribe.
* NB Effective July 23, 2025
5. In addition to the conditions set forth in subdivisions three and
four of this section, the agency shall not insure nor issue a commitment
to insure any rehabilitation loan unless it shall first find that
rehabilitation is necessary to upgrade the property and that
rehabilitation will not necessitate more than a minimum amount of
relocation of the residents of any housing accommodation.
6. A financial institution may request insurance by written
application to the agency in such form and manner, together with such
information and documents, as the agency may prescribe. No application
shall be complete unless and until the financial institution has paid
such processing fees and other charges as the agency may impose in
connection therewith. The agency shall signify its acceptance of such
application for insurance by issuance of a commitment to insure or a
contract of insurance.
7. * (a) The board of directors of the agency may, from time to time,
by vote of a majority of all of its members, establish a percentage
greater than the per centum set in subdivision five of section
twenty-four hundred twenty-six of this title for any or all of the
following categories of loans insurable by the agency or for one or more
loans within such categories: one to four family dwellings one unit of
which is owner-occupied; one to four family dwellings which are not
owner-occupied; five or more family dwellings; proprietary leases;
condominiums; loans secured by other real property; loans purchased or
to be purchased by the agency with proceeds of bonds or notes issued by
the agency; loans securing bonds or notes issued by the agency; loans
covered by pool insurance; or, combinations thereof. The board shall
specify such percentage and shall specify the date on which the
establishment of such percentage shall take effect as to (i) commitments
issued on or after such date and (ii) nothing contained in this section
shall be construed to prohibit the board of directors of the agency from
reducing the per centum used in calculating the mortgage insurance fund
requirement, provided such new per centum is not less than that set in
subdivision five of section twenty-four hundred twenty-six of this
title.
* NB Effective until July 23, 2025
* (a) The board of directors of the agency may, from time to time, by
vote of a majority of all of its members, establish a percentage other
than the percentum set in subdivision five of section twenty-four
hundred twenty-six of this chapter for any or all of the following
categories of loans insurable by the agency: single family residences
which are owner-occupied; single family residences which are not
owner-occupied; multi-family residences; proprietary leases;
condominiums and loans secured by other real property; or, combinations
thereof. The board shall specify such percentage in multiples of five
and shall specify the date on which the establishment of such percentage
shall take effect as to commitments issued on or after such date.
* NB Effective July 23, 2025
(b) No change in the amount of moneys which must be held in or
credited to the mortgage insurance fund pursuant to paragraph (a) of
this subdivision shall have force or effect until the governor of the
state of New York shall have an opportunity to approve or veto it. For
the purpose of procuring such approval or veto, the secretary of the
board shall transmit to the governor at the executive chamber in Albany
a certified copy of that portion of the minutes of the meeting of the
board in which such change was discussed and voted upon as soon after
the holding of such meeting as the minutes can be prepared. The governor
shall, within thirty days, Saturdays, Sundays and public holidays
excepted, after such minutes shall have been delivered at the executive
chamber as aforesaid, cause the same to be returned to the board either
with his approval or with his veto, provided, however, that if the
governor shall not return such minutes within such period then at the
expiration thereof the change therein authorized will have full force
and effect according to the wording thereof. If the governor within such
period returns such minutes with a veto against the change, then such
change shall be null and void.
* 8. Notwithstanding any contrary provisions of this article or of any
other law, rule or regulation, on and after the effective date of this
subdivision;
(a) Except for pool insurance, the agency shall not issue a commitment
to insure nor shall it provide loan insurance for any loan if twenty
percent (or such other percentage as may be established pursuant to
subdivision seven of this section) of the amount to be insured exceeds
ten percent of the mortgage insurance fund requirement for all loans
insured and loans for which commitments to insure have been issued at
that time.
(b) If less than fifty percent, or none of the space of the project is
or is to be used for residential purposes, the amount of such loan
insurance shall not exceed five million dollars and no such loan
insurance may be issued unless the agency finds that the space which is
to be used for other than residential purposes is to be used to provide
the residents of the neighborhood with retail and community service
facilities which would not otherwise be provided. The provisions of this
paragraph shall not apply to loan insurance for projects which provide
temporary shelter for homeless persons or community health facilities.
(c) The agency shall not issue a commitment to insure nor shall it
provide loan insurance for a preservation loan unless: (i) such loan is
made with respect to a one to four family dwelling; or (ii) such loan is
made with respect to a building, which on the effective date of this
subparagraph, is owned by a cooperative housing corporation formed for
the purpose of the cooperative ownership of residential real estate in
the state where such refinancing is not otherwise available and such
loan will facilitate or accommodate affordable homeownership
opportunities; or (iii) such loan is made with respect to the real
property and improvements owned by a cooperative housing corporation
formed for the purpose of the cooperative ownership of residential
manufactured homes in the state where such refinancing is not otherwise
available and such loan will facilitate or accommodate affordable
homeownership opportunities; or (iv) such loan is made with respect to
multi-family residential buildings with existing indebtedness originated
during the period from January first, two thousand four through December
thirty-first, two thousand eight, where such loan will facilitate or
accommodate the preservation of affordable housing accommodations.
* NB Effective until July 23, 2025
* 8. Notwithstanding any contrary provisions of this article or of any
other law, rule or regulation, on and after the effective date of this
subdivision;
(a) The agency shall not issue a commitment to insure nor shall it
provide loan insurance for an amount in excess of the lesser of ten
million dollars or forty percent of the amount of money on deposit in
the mortgage insurance fund at that time.
(b) If less than fifty percent, or none of the space of the project is
or is to be used for residential purposes, the amount of such loan
insurance shall not exceed five million dollars and no such loan
insurance may be issued unless the agency finds that the space which is
to be used for other than residential purposes is to be used to provide
the residents of the neighborhood with retail and community service
facilities which would not otherwise be provided.
(c) The agency shall not issue a commitment to insure nor shall it
provide loan insurance for a preservation loan unless (i) such loan is
made with respect to a one to four family dwelling; or (ii) such loan is
made with respect to a building, which on the effective date of this
subparagraph, is owned by a cooperative housing corporation formed for
the purpose of the cooperative ownership of residential real estate in
the state where such refinancing is not otherwise available and such
loan will facilitate or accommodate affordable homeownership
opportunities; or (iii) such loan is made with respect to the real
property and improvements owned by a cooperative housing corporation
formed for the purpose of the cooperative ownership of residential
manufactured homes in the state where such refinancing is not otherwise
available and such loan will facilitate or accommodate affordable
homeownership opportunities.
* NB Effective July 23, 2025
the provisions of this article, to make commitments to insure and to
contract to insure mortgage loans eligible for insurance hereunder.
* 1-a. The agency may issue commitments to provide and may provide
pool insurance in an amount not in excess of twenty-five percent of the
outstanding principal indebtedness at the time of commitment of any
aggregate of mortgage loans or with respect to mortgage loans acquired
pursuant to section twenty-four hundred five-b of this title,
twenty-five percent of the initial principal indebtedness of any
aggregate of mortgage loans.
* NB Repealed July 23, 2025
2. The agency shall limit its insurance on a rehabilitation or
preservation loan to an amount not in excess of fifty per centum of the
outstanding principal indebtedness, provided, however, that the agency
may insure an amount not in excess of seventy-five per centum of the
outstanding principal indebtedness of a rehabilitation loan if it shall
find, pursuant to rules or regulations which it shall establish that the
extent of rehabilitation is sufficient to justify such additional
insurance, provided further, however, that the agency may insure an
amount equal to the full outstanding principal indebtedness when the
loan has been made by a public benefit corporation of the state of New
York which public benefit corporation has issued or will issue bonds or
notes, some or all of the proceeds of which bonds or notes were used or
will be used to make such loan, or when the loan has been made by a
public employee pension fund.
However, the sum of the percentage of any mortgage loan insured by the
agency and the percentage of such loan insured or to be insured by any
other party shall not exceed one hundred per centum of the outstanding
principal indebtedness.
* 2-a. The agency may issue a commitment to provide and may insure a
preservation loan in an amount equal to the full outstanding principal
indebtedness of such preservation loan if: (a) the existing indebtedness
shall have been originated during the period from January first, two
thousand four through December thirty-first, two thousand eight; (b) the
amount of each insured preservation loan shall not exceed one hundred
fifty million dollars; (c) such preservation loan shall preserve or
create affordable housing accommodations; and (d) the preservation loan
shall have been made by a public benefit corporation of the state of New
York which public benefit corporation has issued or will issue bonds or
notes, some or all of the proceeds of which bonds or notes shall have
been, or will be, used to make such preservation loan, or the
preservation loan shall have been made by a public employee pension
fund.
* NB Repealed July 23, 2025
* 3. Except for pool insurance, and except as otherwise provided in
subdivision three-a of this section, the agency shall not issue a
commitment to insure nor shall it insure any loan unless it shall first
find (a) that the property which is the security for such loan is
located in a neighborhood characterized by a deficiency of available
mortgage financing; (b) that such deficiency has caused or threatens to
cause undermaintained and deteriorating housing accommodations and
substandard and insanitary neighborhoods; (c) that the granting of such
loan will aid in the preservation or rehabilitation of the neighborhood
in which such property is located; (d) if the property which is the
security for such loan is not a housing accommodation, that the granting
of such loan will assist in preventing the deterioration of housing
accommodations in the neighborhood in which such property is located;
(e) that the sum of (i) twenty percentum or such percentum as may be
established by the board of the agency pursuant to subdivision seven of
this section, of the amount of such loan which is to be insured, plus
(ii) the amount of the mortgage insurance fund requirement for the
category of loan does not exceed the amount available in the special
account; and (f) that the property which is the security for such loan
meets such other requirements as the agency may from time to time
establish by guidelines adopted by the agency.
The agency shall not issue a commitment to provide pool insurance nor
shall it provide such insurance unless it shall first find (a) that the
sum of (i) twenty per centum, or such per centum as may be established
by the board of the agency pursuant to subdivision seven of this
section, of the amount of such loans or aggregate of loans which is to
be insured, plus (ii) the amount of the mortgage insurance fund
requirement for the category of loan does not exceed the amount
available in the pool insurance account; and (b) that the property which
is the security for such loan or loans meets such other requirements as
the agency may from time to time establish by guidelines adopted by the
agency.
The agency may issue a commitment to insure and may insure an existing
loan, first when an application for such mortgage insurance is pending
prior to the making of a loan, when significant circumstances beyond the
reasonable control of the mortgagor and mortgagee necessitate the making
of the loan prior to the issuance of the commitment to insure and when
it is determined by the agency that such loan would not have been made
except for the reasonable expectation that the agency would insure the
loan, or second, as part of a transaction in which the financial
institution requesting insurance makes additional loan or loans which
qualify for insurance by the agency, in accordance with provisions of
this section and requirements established by the agency, in a total
amount such that the uninsured portion of such additional loan or loans
equals or exceeds the insured portion of such existing loan or loans.
* NB Effective until July 23, 2025
* 3. The agency shall not issue a commitment to insure nor shall it
insure any loan unless it shall first find (a) that the property which
is the security for such loan is located in a neighborhood characterized
by a deficiency of available mortgage financing; (b) that such
deficiency has caused or threatens to cause undermaintained and
deteriorating housing accommodations and substandard and insanitary
neighborhoods; (c) that the granting of such loan will aid in the
preservation or rehabilitation of the neighborhood in which such
property is located; (d) if the property which is the security for such
loan is not a housing accommodation, that the granting of such loan will
assist in preventing the deterioration of housing accommodations in the
neighborhood in which such property is located; (e) that the sum of (i)
twenty percentum or such percentum as may be established by the board of
the agency pursuant to subdivision seven of this section, of the amount
of such loan which is to be insured, plus (ii) the amount of the
mortgage insurance fund requirement for the category of loan does not
exceed the amount available in the special account; and (f) that the
property which is the security for such loan meets such other
requirements as the agency may from time to time establish by rules and
regulations.
The agency may issue a commitment to insure and may insure an existing
loan, first when an application for such mortgage insurance is pending
prior to the making of a loan, when significant circumstances beyond the
reasonable control of the mortgagor and mortgagee necessitate the making
of the loan prior to the issuance of the commitment to insure and when
it is determined by the agency that such loan would not have been made
except for the reasonable expectation that the agency would insure the
loan, or second, as part of a transaction in which the financial
institution requesting insurance makes additional loan or loans which
qualify for insurance by the agency, in accordance with provisions of
this section and requirements established by the agency, in a total
amount such that the uninsured portion of such additional loan or loans
equals or exceeds the insured portion of such existing loan or loans.
* NB Effective July 23, 2025
* 3-a. The agency may issue a commitment to insure and may insure any
loans or aggregate of loans and may issue a commitment to provide and
may provide mortgage pool insurance on any loans or aggregate of loans,
notwithstanding the criteria set forth in subparagraph (a), (b), (c) or
(d) of the opening paragraph of subdivision three of this section
provided that it shall find that the property which is the security for
such loan or loans is either: (a) located within an empire zone
designated pursuant to article eighteen-B of the general municipal law,
or (b) will provide affordable housing, or (c) the entity providing the
project's mortgage financing was or is created by local, state or
federal legislation and certifies to the agency that the project meets
the program criteria applicable to such entity, or (d) providing a
retail or community service facility that would not otherwise be
provided.
* NB Repealed July 23, 2025
3-b. Notwithstanding any other provision of law to the contrary, when
such insurance is not available through the private market the agency
may insure reverse mortgage loans which meet the following conditions:
(a) the authorized lender requires primary mortgage insurance on the
real property and the applicant is unable to procure such mortgage
insurance in the private market;
(b) the reverse mortgage loan is issued pursuant to section two
hundred eighty or two hundred eighty-a of the real property law;
(c) the reverse mortgage loan amount shall not exceed the loan to
value ratio as may be determined by the superintendent of financial
services; and
(d) the real property which is the security for such reverse mortgage
loan meets such other requirements as the agency may from time to time
establish.
* 4. To be eligible for insurance under this article, a mortgage loan
shall (a) (i) be a first lien of the kind which is commonly given to
secure advances on, or the unpaid purchase price of, real property, or
tangible personal property constituting modular or manufactured housing
in the case of mortgage loans purchased by the agency under its forward
commitment program, under the laws of the state together with any credit
instrument secured thereby, provided, however, that a mortgage loan may
be a second lien if such mortgage loan was purchased by the agency or
(ii) be secured by an assignment or transfer of stock certificates or
other evidence of ownership interest of the borrower in, and a
proprietary lease from, a corporation formed for the purpose of the
cooperative ownership of residential real estate in the state; (b)
secure a rehabilitation or preservation loan on real property held in
fee simple or on a leasehold under a proprietary lease or a lease having
a period of years to run at the time the mortgage is insured under this
article of at least twenty per centum greater duration than the
remaining term of the mortgage; (c) contain terms with respect to
prepayment, insurance, repairs, alterations, payment of taxes, special
assessments, service charges, default reserves, delinquency charges,
foreclosure proceedings, additional and secondary liens, and such other
matters as the agency may in its discretion prescribe; (d) be
accompanied by certificates, issued by such officers of the mortgage
financial institutions, independent appraisers or other persons as the
agency may require, certifying that (i) where appropriate, the annual
income to be derived from the property equals not less than one hundred
and five per centum of the annual charges and expenses, including
provision for reserves, satisfactory to the agency, for the amortization
of subordinate mortgage loans over the remaining terms of such loans
notwithstanding the provisions thereof; (ii) the remaining useful life
of the property is greater than the term of the mortgage; and (iii) the
property does not contain any substantial violations of local building
maintenance and construction codes, except that in the case of a loan
made to the owner of a property containing any such violations, the
agency may insure or commit to insure such loan if the mortgagee and the
owner have submitted a plan, satisfactory to the agency to eliminate
such violations and the issuance of such insurance shall be conditioned
on removal of such violations to the satisfaction of the local code
enforcement agency; and (e) satisfy such additional terms and conditions
as the agency may prescribe. For pool insurance, the requirements of
paragraph (b) of this subdivision shall not be applicable.
* NB Effective until July 23, 2025
* 4. To be eligible for insurance under this article, a mortgage loan
shall (a) (i) be a first lien of the kind which is commonly given to
secure advances on, or the unpaid purchase price of, real property under
the laws of the state together with any credit instrument secured
thereby, provided, however, that a mortgage loan may be a second lien if
such mortgage loan was purchased by the agency or (ii) be secured by an
assignment or transfer of stock certificates or other evidence of
ownership interest of the borrower in, and a proprietary lease from, a
corporation formed for the purpose of the cooperative ownership of
residential real estate in the state; (b) secure a rehabilitation or
preservation loan on real property held in fee simple or on a leasehold
under a proprietary lease or a lease having a period of years to run at
the time the mortgage is insured under this article of at least twenty
per centum greater duration than the remaining term of the mortgage; (c)
contain terms with respect to prepayment, insurance, repairs,
alterations, payment of taxes, special assessments, service charges,
default reserves, delinquency charges, foreclosure proceedings,
additional and secondary liens, and such other matters as the agency may
in its discretion prescribe; (d) be accompanied by certificates, issued
by such officers of the mortgage financial institutions, independent
appraisers or other persons as the agency may require, certifying that
(i) where appropriate, the annual income to be derived from the property
equals not less than one hundred and five per centum of the annual
charges and expenses, including provision for reserves, satisfactory to
the agency, for the amortization of subordinate mortgage loans over the
remaining terms of such loans notwithstanding the provisions thereof;
(ii) the remaining useful life of the property is greater than the term
of the mortgage; and (iii) the property does not contain any substantial
violations of local building maintenance and construction codes, except
that in the case of a loan made to the owner of a property containing
any such violations, the agency may insure or commit to insure such loan
if the mortgagee and the owner have submitted a plan, satisfactory to
the agency to eliminate such violations and the issuance of such
insurance shall be conditioned on removal of such violations to the
satisfaction of the local code enforcement agency; and (e) satisfy such
additional terms and conditions as the agency may prescribe.
* NB Effective July 23, 2025
5. In addition to the conditions set forth in subdivisions three and
four of this section, the agency shall not insure nor issue a commitment
to insure any rehabilitation loan unless it shall first find that
rehabilitation is necessary to upgrade the property and that
rehabilitation will not necessitate more than a minimum amount of
relocation of the residents of any housing accommodation.
6. A financial institution may request insurance by written
application to the agency in such form and manner, together with such
information and documents, as the agency may prescribe. No application
shall be complete unless and until the financial institution has paid
such processing fees and other charges as the agency may impose in
connection therewith. The agency shall signify its acceptance of such
application for insurance by issuance of a commitment to insure or a
contract of insurance.
7. * (a) The board of directors of the agency may, from time to time,
by vote of a majority of all of its members, establish a percentage
greater than the per centum set in subdivision five of section
twenty-four hundred twenty-six of this title for any or all of the
following categories of loans insurable by the agency or for one or more
loans within such categories: one to four family dwellings one unit of
which is owner-occupied; one to four family dwellings which are not
owner-occupied; five or more family dwellings; proprietary leases;
condominiums; loans secured by other real property; loans purchased or
to be purchased by the agency with proceeds of bonds or notes issued by
the agency; loans securing bonds or notes issued by the agency; loans
covered by pool insurance; or, combinations thereof. The board shall
specify such percentage and shall specify the date on which the
establishment of such percentage shall take effect as to (i) commitments
issued on or after such date and (ii) nothing contained in this section
shall be construed to prohibit the board of directors of the agency from
reducing the per centum used in calculating the mortgage insurance fund
requirement, provided such new per centum is not less than that set in
subdivision five of section twenty-four hundred twenty-six of this
title.
* NB Effective until July 23, 2025
* (a) The board of directors of the agency may, from time to time, by
vote of a majority of all of its members, establish a percentage other
than the percentum set in subdivision five of section twenty-four
hundred twenty-six of this chapter for any or all of the following
categories of loans insurable by the agency: single family residences
which are owner-occupied; single family residences which are not
owner-occupied; multi-family residences; proprietary leases;
condominiums and loans secured by other real property; or, combinations
thereof. The board shall specify such percentage in multiples of five
and shall specify the date on which the establishment of such percentage
shall take effect as to commitments issued on or after such date.
* NB Effective July 23, 2025
(b) No change in the amount of moneys which must be held in or
credited to the mortgage insurance fund pursuant to paragraph (a) of
this subdivision shall have force or effect until the governor of the
state of New York shall have an opportunity to approve or veto it. For
the purpose of procuring such approval or veto, the secretary of the
board shall transmit to the governor at the executive chamber in Albany
a certified copy of that portion of the minutes of the meeting of the
board in which such change was discussed and voted upon as soon after
the holding of such meeting as the minutes can be prepared. The governor
shall, within thirty days, Saturdays, Sundays and public holidays
excepted, after such minutes shall have been delivered at the executive
chamber as aforesaid, cause the same to be returned to the board either
with his approval or with his veto, provided, however, that if the
governor shall not return such minutes within such period then at the
expiration thereof the change therein authorized will have full force
and effect according to the wording thereof. If the governor within such
period returns such minutes with a veto against the change, then such
change shall be null and void.
* 8. Notwithstanding any contrary provisions of this article or of any
other law, rule or regulation, on and after the effective date of this
subdivision;
(a) Except for pool insurance, the agency shall not issue a commitment
to insure nor shall it provide loan insurance for any loan if twenty
percent (or such other percentage as may be established pursuant to
subdivision seven of this section) of the amount to be insured exceeds
ten percent of the mortgage insurance fund requirement for all loans
insured and loans for which commitments to insure have been issued at
that time.
(b) If less than fifty percent, or none of the space of the project is
or is to be used for residential purposes, the amount of such loan
insurance shall not exceed five million dollars and no such loan
insurance may be issued unless the agency finds that the space which is
to be used for other than residential purposes is to be used to provide
the residents of the neighborhood with retail and community service
facilities which would not otherwise be provided. The provisions of this
paragraph shall not apply to loan insurance for projects which provide
temporary shelter for homeless persons or community health facilities.
(c) The agency shall not issue a commitment to insure nor shall it
provide loan insurance for a preservation loan unless: (i) such loan is
made with respect to a one to four family dwelling; or (ii) such loan is
made with respect to a building, which on the effective date of this
subparagraph, is owned by a cooperative housing corporation formed for
the purpose of the cooperative ownership of residential real estate in
the state where such refinancing is not otherwise available and such
loan will facilitate or accommodate affordable homeownership
opportunities; or (iii) such loan is made with respect to the real
property and improvements owned by a cooperative housing corporation
formed for the purpose of the cooperative ownership of residential
manufactured homes in the state where such refinancing is not otherwise
available and such loan will facilitate or accommodate affordable
homeownership opportunities; or (iv) such loan is made with respect to
multi-family residential buildings with existing indebtedness originated
during the period from January first, two thousand four through December
thirty-first, two thousand eight, where such loan will facilitate or
accommodate the preservation of affordable housing accommodations.
* NB Effective until July 23, 2025
* 8. Notwithstanding any contrary provisions of this article or of any
other law, rule or regulation, on and after the effective date of this
subdivision;
(a) The agency shall not issue a commitment to insure nor shall it
provide loan insurance for an amount in excess of the lesser of ten
million dollars or forty percent of the amount of money on deposit in
the mortgage insurance fund at that time.
(b) If less than fifty percent, or none of the space of the project is
or is to be used for residential purposes, the amount of such loan
insurance shall not exceed five million dollars and no such loan
insurance may be issued unless the agency finds that the space which is
to be used for other than residential purposes is to be used to provide
the residents of the neighborhood with retail and community service
facilities which would not otherwise be provided.
(c) The agency shall not issue a commitment to insure nor shall it
provide loan insurance for a preservation loan unless (i) such loan is
made with respect to a one to four family dwelling; or (ii) such loan is
made with respect to a building, which on the effective date of this
subparagraph, is owned by a cooperative housing corporation formed for
the purpose of the cooperative ownership of residential real estate in
the state where such refinancing is not otherwise available and such
loan will facilitate or accommodate affordable homeownership
opportunities; or (iii) such loan is made with respect to the real
property and improvements owned by a cooperative housing corporation
formed for the purpose of the cooperative ownership of residential
manufactured homes in the state where such refinancing is not otherwise
available and such loan will facilitate or accommodate affordable
homeownership opportunities.
* NB Effective July 23, 2025