N.Y. Private Housing Finance Law § 576-d: Master servicing agreement

§ 576-d. Master servicing agreement. 1. The commissioner is hereby

authorized to use the monies held in the housing development fund to

make advances to a local loan administrator that has entered into a

written master servicing agreement prescribed by the commissioner

pursuant to subdivision two of this section.

2. The commissioner, in consultation with the comptroller, shall

prescribe a master servicing agreement to be executed by the

commissioner and local loan administrators. Such agreement shall provide

that: (a) any advances made to a local loan administrator shall be used

solely for the purpose of providing loans to agricultural producers for

undertaking farmworker housing projects; (b) the total amount of loans

made to any single agricultural producer shall not exceed two hundred

thousand dollars per annum; (c) the term of any loan shall not exceed

ten years and equal payments of principal payable no less frequently

than annually shall be required to be made on such loan during the term

such loan is outstanding which payments will liquidate the entire

principal balance of the loan over its term; (d) the local loan

administrator is required to pay to the commissioner for deposit into

the housing development fund all repayments including interest, if any,

received from any agricultural producers on account of such loan, except

for that portion permitted to be retained by the local loan

administrator as a fee pursuant to the master servicing agreement. The

master servicing agreement shall also set forth: (i) the form of any

note and security agreement to be executed by the agricultural producer

in connection with any loan, which shall include a provision that use of

the loan to provide housing for a family member of the borrower or its

principals shall constitute a default under the loan and security

agreement; (ii) the rate of interest, if any, to be charged on any loan;

(iii) the amount of any fee to be retained by the local loan

administrator for servicing any loan; (iv) the form of application

required to be completed by an agricultural producer for any loan; (v)

the form of requisition and certification to be required from a local

loan administrator to obtain an advance of funds from the commissioner;

(vi) any other conditions to be imposed upon an agricultural producer as

a condition of receiving a loan; (vii) the responsibilities to be

performed by the local loan administrator in connection with reviewing,

approving and servicing the loan and the circumstances under which the

commissioner may terminate a master servicing agreement; (viii)

conditions necessary to insure prompt closing on loans for which funds

are advanced, including payment of interest of funds from the time

advanced until utilized; and (ix) such other requirements as the

commissioner may from time to time establish by rules and regulations

consistent with the purposes of this section.

3. (a) The commissioner shall, subject to the availability of funds as

appropriated by the legislature, advance from the housing development

fund to a local loan administrator the amount of funds requested in any

requisition within fifteen business days after receipt of all of the

following: a completed requisition for an advance of funds; copies of

any applications and any supporting documentation to which such

requisition pertains; and a certification from the local loan

administrator with respect to such requisition in addition to any other

representation and statement required by the commissioner. The

certification from the local loan administrator shall state that: (i)

the loan administrator has performed its responsibilities in connection

with review and approval of applications to which such requisition

pertains, (ii) to the best of the local loan administrator's knowledge

the loans, to which the advances pertain, comply with the master

servicing agreement and the provisions of this section, and (iii) the

borrowers have demonstrated their ability to make the repayments

required under the loan. In the event that funds are not available or

the commissioner determines that the requisition, application or

certification is defective, it shall so notify the local loan

administrator within fifteen business days after receipt of the

requisition.

(b) The commissioner shall establish criteria for prioritizing loan

applications in the event that the requisitions submitted to the

commissioner by one or more local loan administrators exceed the amount

then available for the purposes of this section. Such criteria shall

give a priority to housing for farmworkers and take into account: (i)

whether the farmworker housing project to which the application pertains

is for the purpose of bringing non-conforming accommodations in

compliance with the provisions of the state sanitary code or the state

fire prevention and building code; (ii) whether the farmworker housing

project to which the application pertains is the most cost effective

approach to enable the agricultural producer to construct or

rehabilitate dwelling accommodations for farmworkers; (iii) whether the

agricultural producer making application lacks the financial resources

to undertake the farmworker housing project without obtaining a loan

pursuant to this section; and (iv) such other factors as the

commissioner deems relevant. In applying the criteria to be utilized for

prioritizing loans, the commissioner shall be entitled to rely on the

information contained in the copies of the applications submitted with

the requisition.