N.Y. Private Housing Finance Law § 59-c: Insured housing initiatives fund

§ 59-c. Insured housing initiatives fund. 1. The agency shall create

and establish a special fund to be known as the insured housing

initiatives fund and shall pay into such fund any moneys which may be

made available to the agency for the purposes of such fund from any

source, including, but not limited to, moneys appropriated by and made

available pursuant to appropriation by the state and any income or

interest earned by, or increment to, the fund due to the investment

thereof or moneys payable to the agency under any contract entered into

pursuant to subdivision two of this section. Subject to the provisions

of any contract with bondholders and noteholders and any contract

authorized pursuant to this section for the provision of insurance,

letters of credit or other financial mechanisms, the moneys held in or

credited to the insured housing initiatives fund established under this

subdivision, in the discretion of the agency, shall be used by the

agency in accordance with subdivision two of this section to enable it

to reduce the debt service that would otherwise be payable by the agency

on its bonds, notes and other obligations issued to make loans pursuant

to subdivision twenty-nine-a of section forty-four of this article, and

thereby to reduce the obligations of the borrower to the agency. The

reduction in debt service as a result of any contract entered into

pursuant to subdivision two of this section shall result solely in the

reduction of rents payable by low income individuals or families

residing in those units in the housing development assisted by the fund

that are required to be occupied by such individuals or families for

interest on obligations issued to finance such housing development to be

exempt from taxation pursuant to section 103(b)(4) of the internal

revenue code of 1954, as amended. Provided, however, to the extent that

such rents for such units are affordable to persons or families whose

income is not in excess of sixty-five percent of median income for the

area, as defined by the agency, then any remaining savings or benefits

shall be applied to the further reduction of such rents for such units,

and/or the reduction of rents payable by other low income individuals or

families residing in the housing development assisted by such fund

and/or the increase in the occupancy of low income individuals or

families residing in such housing development in excess of that required

pursuant to section 103(b)(4) of the internal revenue code of 1954, as

amended.

2. The agency may enter into contracts for the provision of insurance,

letters of credit or other financial mechanisms designed to reduce such

debt service on bonds, notes and other obligations of the agency in

accordance with this section, so long as such obligations receive an

investment grade rating from a recognized rating agency. The moneys held

in or credited to the fund shall not be used to pay the principal of or

interest on such obligations of the agency, the principal of or interest

on the obligations of the borrower to the agency or any fees of the

agency.

3. For the purposes of this section, "low income individuals or

families" shall mean persons or families with incomes of no more than

eighty percent of the median income for the area, as defined by the

agency.

4. The agency shall account separately for all moneys received by the

fund.