§ 1102. Cooperative or condominium, homesteading and rental contracts.
1. Within the limit of funds available in the housing trust fund
account, the corporation is hereby authorized to enter into contracts
with eligible applicants for the furnishing by such applicants of
housing for persons of low income. Each such contract shall provide that
eligible applicants rehabilitate or construct one or more projects or
convert one or more nonresidential properties. Such contracts may
provide for payments, grants or loans by the corporation for the
activities to be carried out by the eligible applicant under the
contract. Such contracts shall provide that a private developer make an
equity investment of the greater of (i) two and one-half percent of
project costs or (ii) five percent of project costs less grants which
are to be applied to such costs. The foregoing shall not preclude a
private developer from making a greater equity investment. Any payments,
grants or loans made by the corporation outstanding at the time of
resale shall be subject to repayment in whole or in part upon resale
after termination of the regulatory period and as otherwise provided
therein. Such repayment provisions may survive the end of the regulatory
period. Such contracts may provide that eligible applicants shall either
(a) perform activities specified under the contract themselves or (b)
act as administrators of a program under which projects are
rehabilitated or constructed or nonresidential properties are converted
by other eligible applicants or (c) perform both such functions. In the
case of a municipality acting as an administrator, funds provided to
such municipality hereunder shall not be deemed to be municipal funds.
The corporation shall refer any request for payments, grants or loans
from persons of low income to eligible applicants in the area in which
such persons reside. Loans may be in the form of participation in loans
including but not limited to participation in loans originated or
financed by lending institutions as defined in section forty-two of this
chapter, the state of New York mortgage agency, the New York city
housing development corporation, the New York state housing finance
agency or private or public employee pension funds. Notwithstanding any
other provision of law, payments, grants and loans may be deposited by
the corporation directly with a lending institution at or before the
time of initial loan closing pursuant to an escrow agreement
satisfactory to the corporation. Payments, grants and loans shall be on
such terms and conditions as the corporation, or the eligible applicant
with the approval of the corporation, as the case may be, shall
determine. Payments, grants and loans shall be used to pay for the
actual and necessary cost of acquisition, construction, rehabilitation
or conversion, provided that not more than fifty percent of such
payments, grants and loans received for the rehabilitation, construction
or conversion of a project may be used for the cost of the project's
acquisition and not more than ten percent of such payments, grants and
loans may be used for the rehabilitation, construction or conversion of
community service facilities and, provided further, that payments,
grants or loans shall not be used for (i) the administrative costs of an
eligible applicant except as otherwise authorized by law, (ii) the cost
of the acquisition, construction, conversion or rehabilitation of
residential units which, subsequent to such acquisition, construction,
conversion or rehabilitation, are to be occupied by persons other than
persons of low income, and (iii) the cost of the acquisition,
construction, conversion or rehabilitation of units which, subsequent to
such acquisition, construction, conversion or rehabilitation, are
occupied or to be occupied for other than residential purposes, except
for community service facilities as described above. No such payments,
grants or loans shall exceed a total of one hundred twenty-five thousand
dollars per dwelling unit. Among the criteria the corporation shall
consider in determining whether to provide additional funds are: average
cost of construction in the area, location of the project and the impact
of the additional funding on the affordability of the project for the
occupants of such project. The length of any loan provided under this
article shall not exceed forty years. No more than fifty percent of the
total amount originally appropriated pursuant to this article in any
fiscal year shall be allocated to projects located within any single
municipality. Of the amount originally appropriated to the corporation
in any fiscal year, no more than thirty-three and one-third percent
shall be allocated to private developers for projects within a city with
a population of one million or more. Of the amount originally
appropriated to the corporation in any fiscal year, no more than
thirty-three and one-third percent shall be allocated to private
developers for projects in the area outside cities with a population of
one million or more.

2. The corporation and eligible applicants which act as administrators
of a program under this article shall deposit any recaptured funds or
funds from the repayment of loans and interest received on loans into
the housing trust fund account.

3. The corporation shall not enter into a contract under this article
unless the eligible applicant has submitted an application and such
application contains a plan, acceptable to the corporation, which
provides for each project:

(a) That violations on the project which are classified as hazardous
or immediately hazardous shall be repaired in accordance with state and
local laws and regulations of state and local agencies and the project
shall be brought into compliance with all applicable laws and
regulations.

(b) For the establishment of occupant selection procedures which
provide that any lawful occupants who live in a project prior to
rehabilitation shall not be displaced as a result of such
rehabilitation, other than temporarily, in which case suitable
relocation arrangements shall be provided, and that any additional
occupants who move into a project are persons of low income. Preference
in selection of such additional occupants; (i) shall be given to persons
or families with the lowest incomes possible, given the income
requirements of the project and; (ii) shall also be given to persons or
families whose current housing fails to meet basic standards of health
and safety and who have little prospect of improving the condition of
their housing except by residing in a project receiving payments, grants
or loans under this article.

(c) In the case of a homesteading project that (i) the project may
only be transferred or sold to an eligible applicant; and (ii) the
resale price of the project shall not exceed an amount equal to the sum
of (A) the original equity paid by the owner for the project and
rehabilitation or construction thereof, exclusive of any payments,
grants or loans received pursuant to this article for such purposes, or
from such other sources as determined by the corporation, with interest
thereon at the rate of six percent per annum, (B) the cost of capital
improvements to the project paid by such owner after the completion of
rehabilitation or construction, exclusive of any payments, grants or
loans received pursuant to this article for such purposes, or from such
other sources as determined by the corporation, with interest thereon at
the rate of six percent per annum, (C) the actual amortization paid by
such owner in the reduction of total outstanding principal indebtedness
on all existing and prior mortgages on, or loans for, such project, but
only to the extent that the proceeds of such mortgages or loans were
used by the owner for the project and rehabilitation or construction
thereof or for the cost of capital improvements thereto, with interest
thereon at the rate of six percent per annum, (D) the actual outstanding
principal indebtedness on all existing mortgages on, or loans or other
obligations for, such project which the owner is required to satisfy,
but only to the extent that the proceeds of such mortgages or loans were
used by the owner for the project and rehabilitation or construction
thereof or for the cost of capital improvements thereto, with interest
thereon at the rate of six percent per annum, provided that if the
indebtedness is not paid in full upon the sale of the project, such
owner shall not be credited with the amount of such indebtedness, and
(E) the reasonable costs and expenses incurred in connection with the
sale of such project.

(d) In the case of a cooperative project that (i) the shares
applicable to a cooperative unit shall be transferred or sold only to an
eligible applicant; and (ii) the resale price of shares applicable to a
cooperative unit shall not exceed an amount equal to the sum of (A) the
original equity paid by the tenant shareholder for such shares and for
the rehabilitation or construction of such unit, exclusive of any
payments, grants or loans received pursuant to this article for such
purposes or from such other sources as determined by the corporation,
with interest thereon at the rate of six percent per annum, (B) the cost
of capital improvements to such unit paid by such tenant shareholder
after the completion of rehabilitation or construction, exclusive of any
payments, grants or loans received pursuant to this article for such
purposes or from such other sources as determined by the corporation,
with interest thereon at the rate of six percent per annum, (C) the
pro-rata portion of any capital assessments or capital contributions for
building wide improvements paid by such tenant shareholder, with
interest thereon at the rate of six percent per annum, (D) the pro-rata
portion of actual amortization paid by such tenant shareholder on all
existing and prior mortgages on such project in the reduction of total
outstanding principal indebtedness, with interest thereon at the rate of
six percent per annum, (E) the actual amortization paid by such tenant
shareholder in the reduction of total outstanding principal indebtedness
on all existing and prior loans for such unit, but only to the extent
that the proceeds of such loans were used by the tenant shareholder for
the purchase of such shares or for the cost of the rehabilitation or
construction of, or capital improvements to, such unit, with interest
thereon at the rate of six percent per annum, (F) the actual outstanding
principal indebtedness on all existing loans or other obligations for
such unit which the tenant shareholder is required to satisfy, but only
to the extent that the proceeds of such loans were used by such tenant
shareholder for the purchase of such shares or for the cost of the
rehabilitation or construction of, or capital improvements to, such
unit, provided that if such indebtedness is not paid in full upon the
sale of such tenant's shares such tenant shareholder shall not be
credited with the amount of such indebtedness, and (G) the reasonable
costs and expenses incurred in connection with the sale of such shares.

(e) In the case of a condominium project that (i) a condominium unit
shall be transferred or sold only to an eligible applicant; and (ii) the
resale price of a condominium unit shall not exceed an amount equal to
the sum of (A) the original equity paid by the owner for such unit and
the rehabilitation or construction thereof, exclusive of any payments,
grants or loans received pursuant to this article for such purposes or
from such other sources as determined by the corporation, with interest
thereon at the rate of six percent per annum, (B) the cost of capital
improvements to such unit paid by such owner after the completion of
rehabilitation or construction, exclusive of any payments, grants or
loans received pursuant to this article for such purposes or from such
other sources as determined by the corporation, with interest thereon at
the rate of six percent per annum, (C) the pro-rata portion of any
capital assessments or capital contributions for building wide
improvements paid by such owner to the project, with interest thereon at
the rate of six percent per annum, (D) the actual amortization paid by
such owner on all existing and prior mortgages on, or loans for, such
unit in the reduction of total outstanding principal indebtedness, but
only to the extent that the proceeds of such mortgages or loans were
used by such owner for the unit and the rehabilitation or construction
thereof or for the cost of capital improvements thereto with interest
thereon at the rate of six percent per annum, (E) the actual outstanding
principal indebtedness on all existing mortgages on, and loans or other
obligations for, such unit which the owner is required to satisfy, but
only to the extent that the proceeds of such mortgages or loans were
used by such owner for the unit and the rehabilitation or construction
thereof or for the cost of capital improvements thereto, provided that
if the indebtedness is not paid in full upon the sale of such unit, such
owner shall not be credited with the amount of such indebtedness, and
(F) the reasonable costs and expenses incurred in connection with the
sale of such unit.

(f) In the case of a rental project that (i) the rental project may
only be transferred or sold to an eligible applicant; and (ii) the
resale price of the rental project shall not exceed an amount equal to
the sum of (A) the original equity paid by the owner for the project and
rehabilitation or construction thereof, exclusive of any payments,
grants or loans received pursuant to this article for such purposes or
from such other sources as determined by the corporation, with interest
thereon at the rate of six percent per annum, (B) the cost of capital
improvements to the project paid by the owner after the completion of
rehabilitation or construction, exclusive of any payments, grants or
loans received pursuant to this article for such purposes or from such
other sources as determined by the corporation, with interest thereon at
the rate of six percent per annum, (C) the actual amortization paid by
such owner on all existing and prior mortgages on, or loans for, such
project in the reduction of total outstanding principal indebtedness,
but only to the extent that the proceeds of such mortgages or loans were
used by such owner for the project and rehabilitation thereof or for the
cost of capital improvements thereto, with interest thereon at the rate
of six percent per annum, (D) the actual outstanding principal
indebtedness on all existing mortgages on, or loans or other obligations
for, such project which the owner is required to satisfy, but only to
the extent that the proceeds of such mortgages or loans were used by the
owner for the project and rehabilitation thereof or for the cost of
capital improvements thereto, provided that if the indebtedness is not
paid in full upon the sale of the project, such owner shall not be
credited with the amount of such indebtedness, and (E) the reasonable
costs and expenses incurred in connection with the sale of such project.

(g) In the case of a rental project, that the project shall be
operated initially as a rental property, and when located in the city of
New York shall be subject to the rent stabilization law of nineteen
hundred sixty-nine, and when located in a municipality which has elected
to be covered by the provisions of the emergency tenant protection act
of nineteen seventy-four, be subject to the provisions of such act. Any
subsequent conversion to cooperative or condominium ownership during the
period in which such property remains subject to the provisions of this
article shall only be allowed with the consent of the corporation and if
done pursuant to section three hundred fifty-two-eeee or three hundred
fifty-two-eee of the general business law shall only be allowed pursuant
to a non-eviction plan. The conversion of a rental project to
cooperative or condominium ownership shall make the cooperative or
condominium subject to the provisions of this article for cooperative or
condominium projects for the remaining term which the rental project was
to be subject to the provisions of this article.

(h) To be located in an area which is blighted, deteriorated or
deteriorating, 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, insanitary, deteriorating or deteriorated
conditions, an aged housing stock, or vacant non-residential property,
or other factors indicating an inability or unwillingness of the private
sector unaided to cause the rehabilitation, construction or conversion
which is contracted for under this article.

3-a. The corporation shall provide the applicant with a list of
conditions that must be met prior to entering into a contract pursuant
to this article. Within fifteen working days of receipt by the
corporation of all documents in satisfaction of the list, the
corporation shall notify the applicant of the sufficiency or
insufficiency of the documents. After satisfaction by the applicant of
all conditions required by the corporation prior to entering into a
contract the corporation shall enter into the contract within forty-five
working days of satisfaction of such conditions.

4. Notwithstanding the provisions of, or any regulation promulgated
pursuant to, the emergency housing rent control law, the local emergency
housing rent control act, or local law enacted pursuant thereto, the
rent stabilization law of nineteen hundred sixty-nine, or the emergency
tenant protection act of nineteen seventy-four, the eligible applicant
with the approval of the corporation shall have the power to set the
initial rent level of any rental housing accommodation which is located
in a rental or homesteading project receiving payments, grants or loans
under this article.

5. Any cooperative or condominium or rental project which receives
payments, grants or loans pursuant to this article shall be subject to
its provisions for a period of twenty years following completion of
rehabilitation work, construction or conversion or for the period during
which any loan or indebtedness received under this article remains
outstanding, whichever is greater provided however that all housing
accommodations in rental projects shall continue to be subject to the
rent stabilization law of nineteen hundred sixty-nine or the emergency
tenant protection act of nineteen seventy-four, as provided in paragraph
(g) of subdivision three of this section as the case may be, for the
period specified in this subdivision and thereafter the applicability of
such laws shall terminate as to each accommodation upon the first
vacancy which occurs in each accommodation.

6. Any homesteading project which receives payments, grants or loans
under this article shall be subject to its provisions for a period of
fifteen years following completion of rehabilitation work, construction
or conversion, or for the period during which any loan or indebtedness
received under this article remains outstanding, whichever is greater.

6-a. Notwithstanding any provisions of subdivisions five and six of
this section to the contrary, in the case of projects subject to a
mortgage made by any lender:

(a) such lender, if not the corporation, shall give the corporation
notice when an owner has defaulted on any payment of principal or
interest on such mortgage loan for a project for a consecutive period of
sixty days.

(b) following receipt of such notice, or at such earlier time as the
corporation deems appropriate, the corporation shall seek to cure such
default and make the project economically viable by assisting the owner
in entering into a mortgage modification agreement with the lender,
finding a new eligible applicant to own the project and assume the
obligations under the mortgage or taking such other actions, consistent
with the provisions of this article, as the corporation deems
appropriate.

(c) notwithstanding the provisions of paragraphs (a) and (b) of this
subdivision, with respect to any lender other than the corporation, the
corporation may provide in agreements respecting any project that where
a lender shall have foreclosed or obtained title to a project in
accordance with law and the provisions of its mortgage, the project or
particular residential units therein shall not be subject to one or more
provisions of this article, other than the rent stabilization coverage
provisions of paragraph (g) of subdivision three of this section. Any
agreement pursuant to this paragraph shall only be made upon a finding
by the corporation that such agreement is necessary in order to enable a
project owner to obtain a mortgage loan from a lender other than the
corporation.

7. The corporation shall provide for the review, at periodic intervals
at least annually, of the performance of eligible applicants under
contract pursuant to this article. Such review shall, among other
things, be for the purposes of ascertaining conformity to contractual
provisions, the financial integrity and efficiency of eligible
applicants and the evaluation of the project. Contracts entered into
pursuant to this article may be terminated, funds may be withheld and
unspent funds may be recaptured by the corporation upon a finding of
substantial nonperformance or breach by the eligible applicant of its
obligations under its contract.

8. Within each of the three categories of projects (cooperative or
condominium, rental, or homesteading), preference in the awarding of
contracts shall be given to economically feasible projects which contain
a substantial number of persons of low income whose income does not
exceed fifty percent of the median income for the metropolitan
statistical area in which the project is located, or if the project is
located outside such an area, to projects which contain a substantial
number of persons of low income whose incomes do not exceed fifty
percent of the median income for the county in which the project is
located, additional preference shall be given to economically feasible
projects located on a brownfield site that has received a certificate of
completion.