N.Y. General Municipal Law § 696-a: Loans

* § 696-a. Loans. 1. a. Notwithstanding the provisions of any

general, special or local law, an agency is hereby authorized to make or

contract to make grants or loans to the owner of any property that is

part of an urban development action area project for the purpose of (i)

rehabilitation of an existing private or multiple dwelling or

construction of a new private or multiple dwelling, (ii) providing site

improvements, incidental or appurtenant to such rehabilitation or such

construction, within the urban development action area in which the

urban development action area project is located, including, but not

limited to, water and sewer facilities, sidewalks, landscaping, parks

and open space, social, recreational, communal and other non-residential

facilities and the outfitting thereof, the curing of problems caused by

abnormal site conditions, excavation and construction of footings and

foundations and other improvements associated with the provision of

infrastructure, or (iii) providing for other costs of construction for

the development of private and multiple dwelling housing accommodations.

b. In the case of a grant made under this section for the

rehabilitation of an existing multiple dwelling intended to be converted

to a condominium or cooperative form of ownership or for the development

of one to four unit housing accommodations or a condominium or

cooperative housing corporation, such grant shall require a regulatory

agreement with the agency limiting profits.

c. Any loan made in accordance with this section shall be secured by a

note and mortgage upon the property improved, other than any such

property title to which is held by the municipality or, in the case of a

condominium, a note and mortgage upon each of the condominium units

aided by such loan, or in the case of a cooperative housing corporation,

a note and mortgage upon the economic interest in such corporation of

each tenant-shareholder aided by such loan, or upon the property

improved, other than any such property title to which is held by the

municipality, or upon both such economic interest or property; provided,

however, that all or part of any such loan may be unsecured if necessary

to satisfy the requirements of any participating lender, and, provided

further, that the lien created by the note and mortgage may be recorded

in an equal or subordinate position, or subsequently made equal or

subordinate, to a lien recorded by any participating lender against such

property. Such loan shall be repaid over such period as the agency shall

determine.

d. Such note and mortgage may provide that the loan shall

automatically be reduced to zero over a period of up to thirty years of

continuous compliance by the owner with a regulatory agreement with the

agency limiting profits and rentals charged or requiring owner

occupancy. Notwithstanding such provision as contained in the note and

mortgage, the loan shall be reduced to zero only if, prior to or

simultaneously with delivery of such note and mortgage, the agency made

a written determination that such reduction would be necessary to ensure

the continued affordability or economic viability of the housing

accommodations assisted by such loan. Such written determination shall

document the basis upon which the loan was determined to be eligible for

evaporation.

e. In the case of a grant or loan made under this section for the

purpose of providing rental housing for persons of low income as defined

in section two of the private housing finance law, such loan or grant

shall require a regulatory agreement with the agency limiting profits

and rentals charged.

f. The repayment of any loan made in accordance with this section

shall be made in such manner as may be provided in such note and

mortgage in connection with such loan, and may authorize the owner, with

the consent of the agency, to prepay the principal of the loan subject

to such terms and conditions as therein provided. Such note and mortgage

may contain such other terms and conditions not inconsistent with the

provisions of this article as the agency may deem necessary or desirable

to carrying out the purposes and provisions of this article including,

but not limited to, provisions concerning the repayment of the loan, the

interest, if any, thereon, and other charges in connection therewith.

g. For purposes of this article, (i) the term "mortgage" shall include

any pledge or assignment of shares or assignment of a proprietary lease

in a cooperative housing corporation where such pledge or assignment is

intended as security for the performance of an obligation and which

imposes a lien on or affects title to such shares or such proprietary

lease; and (ii) the term "owner" shall mean an individual, partnership,

corporation or other entity, including a non-profit company, a mutual

company, or a housing development fund company, having record or

beneficial title in fee simple to real property or the lessee thereof

under a lease having a term of at least forty-nine years.

2. 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, and/or any local law enacted pursuant thereto,

upon completion of the rehabilitation of any building used primarily for

residential purposes, which is aided by a loan made by a municipality

pursuant to subdivision one of this section in a jurisdiction in which

rents are regulated pursuant to any of the above laws or acts, the

agency shall establish the initial rent for each rental dwelling unit

within the building. All dwelling units within such building subsequent

to establishment of initial rents by the agency shall be subject to the

emergency housing rent control law, the local emergency housing rent

control act, the emergency tenant protection act of nineteen

seventy-four, and/or any local law enacted pursuant thereto, if

applicable in the municipality, but only if such laws and/or acts would

otherwise apply to such dwelling units. The tenants in occupancy of such

dwelling units in such a building that are regulated pursuant to such

laws and/or acts shall be offered a choice of a one-year or two-year

lease at the initial rent established by the agency, notwithstanding any

contrary provisions of, or regulations adopted pursuant to, such laws

and/or acts. The agency shall cause all tenants in occupancy of each

dwelling unit affected by this subdivision to be notified of and have an

opportunity to comment upon 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 prior to

commencement of the rehabilitation and again after its completion before

establishment of the initial rents.

3. The agency shall use its best efforts to ensure that actions

undertaken pursuant to subdivision two of this section are structured so

as to minimize the likelihood of any involuntary economic displacement

of tenants who reside in multiple dwellings which are the subject of

such actions, provided, however, that if temporary physical displacement

is required as a direct result of rehabilitation work which is performed

in a multiple dwelling which is aided by a loan made by a municipality

pursuant to subdivision one of this section, suitable temporary

relocation arrangements shall be provided.

* NB Effective until July 1, 2027

* § 696-a. Loans. Notwithstanding the provisions of any general,

special or local law, an agency is hereby authorized to make or contract

to make grants or loans to the owner of any property that is part of an

urban development action area project for the purpose of: (i)

rehabilitation of an existing private or multiple dwelling or

construction of a new private or multiple dwelling, (ii) providing site

improvements, incidental or appurtenant to such rehabilitation or such

construction, within the urban development action area in which the

urban development action area project is located, including, but not

limited to, water and sewer facilities, sidewalks, landscaping, parks

and open space, social, recreational, communal and other non-residential

facilities and the outfitting thereof, the curing of problems caused by

abnormal site conditions, excavation and construction of footings and

foundations and other improvements associated with the provision of

infrastructure, or (iii) providing for other costs of construction for

the development of private and multiple dwelling housing accommodations.

In the case of a grant made under this section for the rehabilitation of

an existing multiple dwelling intended to be converted to a condominium

or cooperative form of ownership or for the development of one to four

unit housing accommodations or a condominium or cooperative housing

corporation, such grant shall require a regulatory agreement with the

agency limiting profits. Any loan made in accordance with this section

shall be secured by a note and mortgage upon the property improved,

other than any such property title to which is held by the municipality,

or, in the case of a condominium, a note and mortgage upon each of the

condominium units aided by such loan, or in the case of a cooperative

housing corporation, a note and mortgage upon the economic interest in

such corporation of each tenant-shareholder aided by such loan, or upon

the property improved, other than any such property title to which is

held by the municipality, or upon both such economic interest or

property; provided, however, that all or part of any such loan may be

unsecured if necessary to satisfy the requirements of any participating

lender. Such loan shall be repaid over such period as the agency shall

determine. In the case of a loan for rehabilitation of an existing

multiple dwelling intended to be converted to a condominium or

cooperative form of ownership or a loan for the provision of

infrastructure or for the provision of other costs of construction for

the development of one to four unit housing accommodations or a

condominium or cooperative housing corporation, such note and mortgage

may provide that the loan shall automatically be reduced to zero over a

period of owner-occupancy of the housing accommodations assisted by such

loan. In the case of a grant or loan made under this section for the

purpose of providing rental housing for persons of low income as defined

in section two of the private housing finance law, such loan or grant

shall require a regulatory agreement with the agency limiting profits

and rentals charged. In the case of a loan made under this section for

the purpose of providing rental housing for persons of low income as

defined in section two of the private housing finance law, such note and

mortgage may provide that the loan shall automatically be reduced to

zero over a period of up to thirty years of compliance by the owner with

a regulatory agreement with the agency limiting profits and rentals

charged. The repayment of any loan made in accordance with this section

shall be made in such manner as may be provided in such note and

mortgage in connection with such loan, and may authorize the owner, with

the consent of the agency, to prepay the principal of the loan subject

to such terms and conditions as therein provided. Such note and mortgage

may contain such other terms and conditions not inconsistent with the

provisions of this article as the agency may deem necessary or desirable

to carrying out the purposes and provisions of this article including,

but not limited to, provisions concerning the repayment of the loan, the

interest, if any, thereon, and other charges in connection therewith.

For purposes of this article, (1) the term "mortgage" shall include any

pledge or assignment of shares or assignment of a proprietary lease in a

cooperative housing corporation where such pledge or assignment is

intended as security for the performance of an obligation and which

imposes a lien on or affects title to such shares or such proprietary

lease; and (2) the term "owner" shall mean an individual, partnership,

corporation or other entity, including a non-profit company, a mutual

company, or a housing development fund company, having record or

beneficial title in fee simple to real property or the lessee thereof

under a lease having a term of at least forty-nine years.

* NB Effective July 1, 2027