§ 452. Loans to owners. 1. Notwithstanding the provisions of any
general, special or local law, a municipality is hereby authorized:

(a) to make or contract to make loans to the owners of existing
multiple dwellings within its territorial limits, subject to the
limitations in subdivision two of this section, for the elimination of
any substandard or insanitary condition or conditions in violation of
the multiple dwelling law or local housing code, for the incorporation
of climate resiliency improvements or for such replacement and
rehabilitation of the heating, plumbing, electrical and related systems
or other improvements as shall be reasonably necessary to prolong the
useful life of such dwellings, and may make temporary loans to such
owners in anticipation of the permanent municipal loans for such
purposes; and

(b) to make or contract to make grants to any owner described in
paragraph (a) of this subdivision, on the same terms as permitted under
such paragraph for a loan.

1-a. As used in this article, the term "loan" shall include any grant
made by a municipality pursuant to this article, provided, however, that
provisions of this article concerning the repayment or forgiveness of,
or security for, a loan shall not apply to any grant made pursuant to
this article.

2. Each loan shall be evidenced by a note executed by the owner of the
existing multiple dwelling. The supervising agency in its discretion may
require one or more of the shareholders of a corporate owner to co-sign
such note or to otherwise guarantee or pledge security for the repayment
of the loan. Each such note shall be repaid within a period of forty
years, provided that such period may be extended as the supervising
agency may determine necessary to ensure the continued affordability or
economic viability of the existing multiple dwelling. The repayment
shall be made in such manner as may be provided in such note and
contract, if any, in connection with such loan and may authorize such
owner, with the consent of the supervising agency, to prepay the
principal of the loan subject to such terms and conditions as therein
provided. Such note and contract may contain such other terms and
provisions not inconsistent with the provisions of this article as the
local legislative body or supervising agency may deem necessary or
desirable to secure repayment of the loan, the interest thereon and
other charges in connection therewith and to carry out the purposes and
provisions of this article, including but not limited to provisions
ensuring availability of rents for such repayment and provisions
permitting the lien created by such note and mortgage, and, if
applicable, a regulatory agreement executed by such owner and
supervising agency, be recorded in an equal and subordinate position, or
subsequently made equal or subordinate, to a lien recorded by any
private lender against such multiple dwelling.

3. The supervising agency in its discretion may require that the owner
execute a financing statement for real property improvement to be in
such form as the agency shall specify and to contain the following
information: the name and mailing address of the owner, the address of
the real property, a statement that a loan has been made by the
municipality under this article, the amount and duration thereof and the
applicable interest rate. Said financing statement shall be filed
without charge in the office for recording mortgages of real property
and from the date of such filing the municipality shall have a lien
against said real property for the amount advanced or so much thereof as
remains unpaid and interest thereon. If a financing statement is filed
as herein provided, the rights and remedies of the municipality and the
priority of its lien shall be the same as those of a holder of a lien
for the materials furnished or labor performed in the improvement of
real property pursuant to articles two and three of the lien law, except
that the lien shall be valid for one year after the maturity date of the
final installment payable under said note and thereafter as provided in
section seventeen of the lien law. Upon payment of all sums advanced by
the municipality and interest thereon and upon demand of the then record
owner of the real property, the agency shall deliver to him a copy of
the financing statement with an endorsement thereon that the lien is
satisfied; upon filing of such copy in the office where the financing
statement was filed and upon payment of the proper fee therefor, the
lien of such financing statement shall be discharged.

4. The supervising agency may require the owner to execute a mortgage
as security for a loan in lieu of a financing statement as provided in
the foregoing subsection three. Such mortgage shall contain such terms
and provisions not inconsistent with the provisions of this article as
the supervising agency shall deem necessary or desirable to secure
repayment of the loan under this article.

5. The supervising agency may require the payment of charges by the
owner of such existing multiple dwelling in consideration for the
financing, regulation, supervision and audit of such loan. Such charges
shall be paid into the treasury of the municipality requiring the
charges and shall be paid and deposited in the general fund of any such
municipality.

6. In the case of a loan made pursuant to this article, the
supervising agency may pay any liens and charges the priority of which
is superior to its mortgage and may pay such other expenses as may be
appropriate to protect its loan or to protect the lien of the mortgage
relating thereto, provided that such expenditures shall not exceed the
total amount of such loan.

* 7. Notwithstanding the provisions of, or any regulation promulgated
pursuant to, the emergency housing rent control law, the local emergency
housing rent control act, the emergency tenant protection act of
nineteen seventy-four, or any local law enacted pursuant thereto, upon
completion of the rehabilitation of a multiple dwelling which is aided
by a loan made pursuant to this article, the supervising agency, may as
an alternative to permissible rental adjustments under such laws and
regulations, adjust the rent for each rental dwelling unit within the
multiple dwelling. The initial rental adjustment, if set by the
supervising agency, shall be established based solely on the debt
service attributable to the loan, provided, that the supervising agency
may establish rental adjustments less than such debt service, provided
further that the supervising agency may establish greater rental
adjustments for vacant dwelling units than for occupied dwelling units.
The supervising agency shall cause all tenants in occupancy of each
dwelling unit affected by the provisions of this subdivision to be
notified of and have an opportunity to comment on contemplated
rehabilitation. Such notification shall advise such tenants of the
approximate expected rent increase. Such notification and opportunity to
comment shall be provided before the rehabilitation and again after the
construction is completed and before the establishment of the rental
adjustment.

* NB Expires July 1, 2027

* 8. Notwithstanding the provisions of, or any regulation promulgated
pursuant to, the emergency housing rent control law, the local emergency
housing rent control act, the emergency tenant protection act of
nineteen seventy-four, or any local law enacted pursuant thereto, upon
completion of the rehabilitation of a class B multiple dwelling, class A
multiple dwelling used for single room occupancy purposes, lodging house
or a substantially vacant building intended to be used after
rehabilitation for single room occupancy purposes and which is aided by
a loan pursuant to this article made by the municipality on or after
September first, nineteen hundred eighty-five, the agency shall
establish the initial rent for each rental dwelling unit within the
multiple dwelling. All dwelling units within the multiple dwelling
subsequent to establishment of initial rents by the agency shall be
subject to the rent stabilization law of nineteen hundred sixty-nine.
The occupant in possession of such a dwelling unit when it is made
subject to the rent stabilization law of nineteen hundred sixty-nine
shall be offered a choice of a one or two year lease at the initial
rents established by the agency notwithstanding any contrary provisions
of, or regulations adopted pursuant to, the rent stabilization law of
nineteen hundred sixty-nine and the emergency tenant protection act of
nineteen seventy-four. The agency shall cause all tenants in occupancy
of each dwelling unit affected by the provisions of this subdivision to
be notified of and have an opportunity to comment on the contemplated
rehabilitation. Such notification shall advise such tenants of the
approximate expected rent increase and the subsequent availability of a
one or two year lease. Such notification and opportunity to comment
shall be provided before the rehabilitation and again after the
construction is completed and before the establishment of the initial
rents.

* NB Expires July 1, 2027

9. The note or note and contract issued by the owner of any such
multiple dwelling to secure such loan may provide that the loan shall be
reduced to zero commencing on the fifteenth year after the execution of
the note or note and contract, provided that, as of the date of such
reduction, the multiple dwelling has been and continues to be owned and
operated in a manner consistent with a regulatory agreement with the
municipality. Notwithstanding such provision as contained in the note or
note and contract, the loan shall be reduced to zero only if, prior to
or simultaneously with delivery of such note or note and contract, the
agency made a written determination that such reduction would be
necessary to ensure the continued affordability or economic viability of
the multiple dwelling. Such written determination shall document the
basis upon which the loan was determined to be eligible for evaporation.