N.Y. Private Housing Finance Law § 575: Advances; conditions; repayment

§ 575. Advances; conditions; repayment. 1. The commissioner of housing

and community renewal is hereby authorized to use the moneys held in the

housing development fund to make non-interest bearing advances to

housing development fund companies, and housing corporations in

accordance with the provisions of this article. Such moneys shall be

paid out of such fund, after audit by and upon the warrant of the

comptroller, on vouchers approved by the commissioner.

1-a. The supervising agency is hereby authorized to use the moneys

held in the municipal housing development fund or other funds

appropriated by the municipality to make non-interest bearing advances

to housing development fund companies in accordance with the provisions

of this article and the applicable law of the municipality.

2. No such advances shall be made with respect to a housing project

unless the commissioner or the supervising agency, as the case may be,

(a) finds (1) that the housing development fund company, or housing

corporation proposes to finance the project in whole or in part by a

federally-aided, state-aided or municipally-aided mortgage or (2) that

the project, if otherwise financed, will provide housing for persons or

families of low income, as defined in this chapter, and is otherwise

consistent with the purposes of this article; (b) finds that the project

site is suitable, there is a need for this housing type proposed in the

area to be served and the project is feasible; and (c) reasonably

anticipates that financing will be obtained and makes a finding to that

effect.

3. No such advances may be made to a housing corporation unless it

enters into an agreement with the commissioner to be regulated with

respect to rents, profits, dividends and disposition of its property or

franchises. No such advances may be made to a housing development fund

company unless it enters into an agreement in accordance with the

provisions of section five hundred seventy-six of this article.

4. The proceeds of such advance may be used only to defray the

development costs of such project.

5. Each such advance shall either (i) be consolidated with the lien of

a municipally-aided mortgage, or (ii) be repaid in full by the housing

development fund company, or housing corporation to the division of

housing and community renewal or to the supervising agency as directed

in paragraph (b) of subdivision two of section five hundred

seventy-four-a of this article, as the case may be. Such repayment shall

be made concurrent with receipt by the housing development fund company

or its successor in interest, or housing corporation of the proceeds of

its mortgage or construction loan, unless the commissioner or the

supervising agency, as the case may be, shall extend the period for the

repayment of such advances. In no event shall the time of repayment be

extended later than the date of final advance of funds pursuant to such

mortgage financing.

6. If the commissioner or the supervising agency, as the case may be,

in his or its discretion shall, at any time, determine that permanent

financing for the housing project may not be obtained, then and in that

event all advances made to the housing development fund company, or

housing corporation pursuant to this article shall become due and

payable upon the demand of the commissioner or the supervising agency,

as the case may be.