N.Y. Private Housing Finance Law § 23-c: Mortgage modifications

§ 23-c. Mortgage modifications. 1. For the purposes of this section,

the following terms shall have the meanings set forth below:

(a) "Existing mortgage" shall mean any mortgage held by the

municipality securing a loan made by such municipality in accordance

with the provisions of this article, and any note or bond evidencing

indebtedness thereon, including, but not limited to, any mortgage, note

or bond securing residual indebtedness and any mortgage, note or bond

securing a loan to finance the construction of a project.

b. "Non-recoverable debt service" shall mean, with respect to any

increase in indebtedness executed or approved pursuant to this section

that is not attributable to project cost, all payments of interest and

principal on such portion of the indebtedness.

(c) "Restrictive agreement" shall mean a binding agreement between a

company and the supervising agency, which (i) prohibits the dissolution

of the company pursuant to the provisions of section thirty-five of this

article for not less than six years from the date of such agreement, and

(ii) prohibits the consideration of non-recoverable debt service in any

rent increase pursuant to the provisions of section thirty-one of this

article at any time subsequent to the date of such agreement.

2. Notwithstanding the provisions of this article or the provisions of

any law, general or special, a company that enters into a restrictive

agreement on or after the effective date of a chapter of the laws of

2004 which added this subdivision, may, with the approval of such

supervising agency:

(a) substitute a new mortgage approved by the supervising agency for

any existing mortgage;

(b) extend or modify any existing mortgage in such manner and for such

term as shall be determined by the supervising agency;

(c) subordinate any existing mortgage in any manner approved by the

supervising agency to the lien of any mortgage held by a lender that is

authorized to participate in loans pursuant to section twenty-three-b of

this article; and

(d) borrow funds and secure the repayment thereof by note and mortgage

or in any other manner approved by the supervising agency.