§ 26. Conditions and security for loans. 1. No loan shall be made by
the state, the New York state housing finance agency, a municipality or
the New York city housing development corporation unless the
commissioner, with respect to a project aided by a state loan or New
York state housing finance agency loan, or the supervisory agency, with
respect to a municipally-aided project, finds that:

(a) The municipality has approved the project as provided in
subdivision five of this section and has enacted or will enact
regulations or appropriate restrictions adequately protecting the
project against future uses likely to depreciate unduly the value of
such project;

(b) The estimated revenues of the project will be sufficient to cover
all probable costs of operation and maintenance, of fixed charges and
operating reserves and depreciation reserves if any;

(c) The plans and specifications conform to the requirements of all
laws applicable thereto, and assure adequate light, air, sanitation and
fire protection;

(d) If the project is aided by a state loan, or a New York state
housing finance agency loan, the commissioner shall also find that the
project is in conformity with a plan or undertaking for providing low
rent housing facilities for persons of low income and for the clearance,
replanning, reconstruction or rehabilitation of a substandard and
insanitary area or areas, and for other facilities incidental or
appurtenant thereto as may be approved by the commissioner.

1-a. No company may be aided pursuant to this article by a mortgage
loan or tax exemption or both to finance the acquisition of a building
by residents thereof unless the commissioner or the supervising agency,
as the case may be, finds that:

(a) the condition of such building is deteriorating and the building
is located in a deteriorating area or in an area threatened with
deterioration by reason of economic, social or physical changes
occurring therein or in nearby areas;

(b) the building is not yielding sufficient revenues to cover costs of
operation and maintenance, of fixed charges and of reserves, if any, and
also a reasonable profit to the owner;

(c) the making of such loan will prevent further deterioration and
abandonment;

(d) at least two-thirds of the present residents consent to such
acquisition;

(e) financing for such acquisition is otherwise unavailable because of
the neighborhood, the age of the buildings, or other factors indicating
an inability of the private sector unaided to cause such acquisition to
be effected;

(f) the proceeds of such loan will not be used to refinance existing
debt in excess of a reasonable relationship to current value; and

(g) the term for repayment of such loan does not exceed the remaining
useful life of the building.

2. The principal of a loan made by the state shall be repaid by the
company over a period of not to exceed fifty years except in the case of
a loan to rehabilitate an existing building, in which case the period
shall not exceed thirty-five years, or the estimated life of the
project, whichever is shorter, in annual installments equal to the
amount payable by the state on the moneys borrowed for the project.
Such annual installment of principal need not be uniform in amount, but
may be so varied that the total payment of principal and interest shall
be approximately equal and constant during the period of the loan. Each
payment of principal and interest shall be made to the state comptroller
not later than five days before each payment by the state is required.
The loan shall bear the same rate of interest paid or to be paid by the
state for the definitive housing bonds issued on account of such loan.
The company shall pay to the state comptroller a proportionate share of
the cost of borrowing not later than thirty days after the state
comptroller has certified the amount of such share.

3. Any bonds or notes issued by the company and any mortgages relating
thereto may authorize the company, with the consent of the state
comptroller in the case of a state-aided project, or the supervising
agency in the case of a municipally-aided project, to prepay the
principal of the loan. Such bonds or notes and mortgages may contain
such other clauses and provisions as the commissioner in the case of a
state-aided project or the supervising agency in the case of a
municipally-aided project, shall require. Notwithstanding the provisions
of any general, special or local law, the principal of any loans made
pursuant to subdivision one of section fifteen of this article or the
principal of a loan made by a municipality pursuant to this article and
secured by a mortgage lien subordinate to the lien of a first mortgage
made pursuant to paragraph (b) of subdivision one of section fifteen of
this article may be amortized at such time or times or at such rate as
the supervising agency shall approve.

4. With respect to a state-aided project the commissioner may charge
the company reasonable fees for financing, regulation, supervision and
audit. Fees collected for such services shall be paid into and disbursed
from such fund or funds as may be provided by law.

5. (a) In a municipality where there is a planning commission, the
project shall first be submitted to it for approval. Where changes in
the city map and zoning amendments or variances are necessitated by such
project, such amendments, variances and changes shall be submitted
together with such project and considered as a part thereof. Such
planning commission, not later than ten weeks from the date of the
referral of the project to it, after a public hearing held on due
notice, notice of which shall be published at least ten days prior
thereto in the official publication of the municipality, or if none
exists, in a newspaper circulating in the municipality, shall submit its
report to the local legislative body certifying its unqualified
approval, its disapproval, or its qualified approval with
recommendations for modifications therein.

After public hearing held on due notice and after the report is
received or due from the planning commission, the local legislative body
may:

(i) if the planning commission shall have certified its unqualified
approval, approve the project by a majority vote;

(ii) if the planning commission shall have certified its disapproval
or shall have failed to make its report within ten weeks from the date
such project was submitted to it, nevertheless approve the project, but
only by a three-fourths vote;

(iii) if the planning commission shall have certified its qualified
approval together with recommendations for modifications, approve the
project together with the modifications recommended by the planning
commission by a majority vote, or approve the project without such
modifications but only by a three-fourths vote.

(b) In a municipality where there is no planning commission the
project shall be submitted to the local legislative body which, after
public hearing held on due notice, may either approve or disapprove the
project.

(c) Notwithstanding any other provision of law, changes in the city
map, zoning amendments, or variances contained in the plan shall be
deemed approved by the local legislative body when it approves the
project. Any such changes in the city map, zoning amendments, or
variances shall become effective on the date on which the supervising
agency shall file a resolution with the local legislative body in
implementation thereof.

6. The provisions of subdivisions one and five of this section shall
not apply to a state urban development corporation project or to any
loan made by the state or the state housing finance agency to such
project, notwithstanding anything to the contrary contained herein.

7. Notwithstanding anything to the contrary contained therein, the
provisions of subdivisions one and five of this section shall not apply
to a Battery Park city project or to any loan made by the state or the
New York state housing finance agency to such project.