N.Y. Private Housing Finance Law § 576-e: Municipal housing assistance fund

§ 576-e. Municipal housing assistance fund. 1. A municipality may

create and establish a fund to be known as the "municipal housing

assistance fund". Such a fund shall be created and established in the

supervising agency.

2. There may be paid into such municipal housing assistance fund (a)

any moneys appropriated and made available by the municipality for the

purposes of such fund, (b) notwithstanding the provisions of the local

finance law or any other provisions of law, any moneys received in

repayment of loans from such fund, and (c) any other moneys which may be

available for the purpose of such fund from any other source or sources.

3. The purpose of such fund shall be to make loans to housing

development fund companies which have agreed to acquire residential

properties by deed from the commissioner of finance of a municipality

and to operate and manage such properties in accordance with a

regulatory agreement with the municipality until the properties are

transferred to a new owner approved by the municipality.

4. The supervising agency may make loans from the fund to enable such

housing development fund companies to pay development costs and any

other expenses incurred by the housing development fund company and

approved by the supervising agency.

5. Any housing development fund company which receives a loan pursuant

to this section shall execute a note and regulatory agreement. The note

may provide that it shall be reduced to zero over a period of continued

compliance with either the regulatory agreement required pursuant to

this section or such other regulatory agreement as the supervising

agency shall require. The loan shall be reduced to zero only if prior to

or simultaneously with delivery of such note, the supervising agency has

made a written determination that such reduction would be necessary to

ensure the continued affordability or economic viability of the project.

Such written determination shall document the basis upon which the loan

was determined eligible for evaporation.

6. A regulatory agreement pursuant to this section may terminate upon

such terms and conditions as provided by the supervising agency.

7. A housing development fund company which receives a loan pursuant

to this section shall provide in its certificate of incorporation that

the supervising agency shall have the power if in its discretion it

determines that the company has defaulted in its obligations to the

municipality to appoint to the board of such corporation a number of new

directors which number shall be sufficient to constitute a majority of

the board, notwithstanding any other provisions of such certificate or

of any other provision of law.