N.Y. Private Housing Finance Law § 654: Powers of the corporation

§ 654. Powers of the corporation. Except as otherwise limited by this

article, the corporation shall have power:

1. To sue and be sued;

2. To have a seal and alter the same at pleasure;

3. To make and alter by-laws for its organization and internal

management and, subject to agreements with noteholders or bondholders,

to make rules and regulations governing the use of its property and

facilities;

4. To make and execute contracts and all other instruments necessary

or convenient for the exercise of its powers and functions under this

article;

5. To acquire, hold and dispose of real and/or personal property for

its corporate purposes;

6. To appoint officers, agents and employees, prescribe their duties

and qualifications and fix their compensation, subject to the provisions

of the civil service law and the rules of the civil service commission

of the city;

7. Subject to the provisions of any contract with noteholders and

bondholders, to make mortgage loans, to participate with the city or

with one or more organizations mentioned in section fifteen of this

chapter in making mortgage loans and to undertake commitments to make

any such mortgage loans to housing companies, including any subsidiary

of the corporation, on the same terms and otherwise in accordance with

the provisions of article two of this chapter governing loans by a

municipality;

* 7-a. Subject to the provisions of any contract with noteholders and

bondholders, to make mortgage loans, to participate with the city or

with one or more organizations set forth in section one hundred eleven-a

of this chapter in making mortgage loans and to undertake commitments to

make any such mortgage loans to redevelopment companies organized under

article five of this chapter;

* NB (Effective until ruling by Internal Revenue Service)

* 7-a. Subject to the provisions of any contract with noteholders and

bondholders, to make mortgage loans, to participate with the city or

with one or more organizations set forth in sections eighty-one and one

hundred eleven-a of this chapter in making mortgage loans and to

undertake commitments to make any such mortgage loans to

limited-dividend housing companies organized under article four of this

chapter and to redevelopment companies organized under article five of

this chapter. Such mortgage loans may be made to limited-dividend and

redevelopment companies for such purposes as may be approved by the

corporation including, but not limited to, the refinancing of the

existing mortgage indebtedness of such companies, to provide funds for

the replacement, improvement and rehabilitation of the properties owned

by said companies, to provide funds for all costs incurred by such

companies relating to the refinancing of the existing mortgage

indebtedness including amounts required to establish escrow accounts,

reserves and working capital as determined by the corporation and for

such other purposes as are permitted by articles four and five of this

chapter; provided, however, such purposes must be approved by the

Federal Internal Revenue Service for application of the tax exemption

for housing bonds. Such mortgage loans may be made by the corporation

without any requirement that all or any portion of the loan be used to

create new or rehabilitated housing facilities. In furtherance of its

powers pursuant to this subdivision and, subject to the provisions of

any contract with noteholders and bondholders, the corporation may

acquire and contract to acquire, by assignment or otherwise, any

mortgage securing a loan and any related bond or note made by a

limited-dividend housing company or a redevelopment company and may

modify or satisfy such mortgage and accept or make a new mortgage or

mortgages and execute such other instruments as the corporation deems to

be necessary or proper.

* NB (Effective pending ruling by Internal Revenue Service)

8. Subject to the provisions of any contract with noteholders and

bondholders, to make mortgage loans including participation and

investment with the city or with one or more corporations, organizations

or individuals of the kind mentioned in section four hundred seven of

this chapter in making mortgage loans and to undertake commitments to

make mortgage loans to owners of existing multiple dwellings, including

any subsidiary of the corporation, on the same terms and otherwise in

accordance with the provisions of article eight of this chapter, except

that such loans shall in all cases be secured by a first lien;

8-a. Subject to the provisions of any contract with noteholders or

bondholders, to participate with the city or one or more private

investors as defined in section eight hundred one of this chapter or

with the city and one or more such private investors in making loans in

accordance with the provisions of article fifteen of this chapter.

9. Subject to the provisions of any contract with noteholders and

bondholders, to sell, at public or private sale, any mortgage or other

obligation securing a mortgage loan made by the corporation;

10. Subject to the provisions of any contract with noteholders and

bondholders, in connection with the making of mortgage loans and

commitments therefor, to make and collect such fees and charges,

including but not limited to reimbursement of all costs of financing by

the corporation, service charges and insurance premiums, as the

corporation shall determine to be reasonable;

11. Subject to the provisions of any contract with noteholders and

bondholders, to consent to the modification, with respect to rate of

interest, time of payment of any installment of principal or interest,

security, or any other term, of any mortgage, mortgage loan, mortgage

loan commitment, contract or agreement of any kind to which the

corporation is a party;

12. To foreclose any mortgage in default or commence any action to

protect or enforce any right conferred upon it by any law, mortgage,

contract or other agreement, and to bid for and purchase such property

at any foreclosure or at any other sale, or acquire or take possession

of any such property; and in such event the corporation may complete,

administer, pay the principal of and interest on any obligations

incurred in connection with such property, dispose of, and otherwise

deal with, such property, in such manner as may be necessary or

desirable to protect the interests of the corporation therein;

12-a. To create subsidiaries, as provided in section six hundred

fifty-four-a of this chapter.

13. To borrow money and to issue negotiable notes or bonds or other

obligations and to fund or refund the same, and to provide for the

rights of the holders of its obligations;

14. To invest any funds held in reserves or sinking funds, or any

funds not required for immediate use or disbursement, at the discretion

of the corporation, in obligations of the city, state or federal

government, obligations the principal and interest of which are

guaranteed by the city, state or federal government, obligations of

agencies of the federal government which may from time to time be

legally purchased by savings banks of the state as investments of funds

belonging to them or in their control and be approved by the

comptroller, obligations in which the comptroller of the state of New

York is authorized to invest pursuant to section ninety-eight of the

state finance law, obligations of the New York city municipal water

finance authority, participation certificates of the federal home loan

mortgage corporation or mortgage-backed securities of the federal

national mortgage association.

15. Subject to the provisions of any contract with noteholders and

bondholders and subject to the provisions of section six hundred

fifty-five of this article, to purchase notes or bonds of the

corporation;

16. To procure insurance against any loss in connection with its

property and other assets including mortgages and mortgage loans in such

amounts and from such insurers as it deems desirable;

17. To engage the services of consultants on a contract basis for

rendering professional and technical assistance and advice; and where

the corporation shall join with one or more organizations mentioned in

section fifteen, one hundred eleven-a or four hundred seven of this

chapter in making mortgage loans, to make provision, either in the

mortgage or mortgages or by separate agreement, for the performance of

such services as are generally performed by a banking organization or

insurance company which itself owns and holds a mortgage or by a trustee

under a trust mortgage, and to consent to the appointment of a banking

organization to act in such capacity;

18. To contract for and to accept any gifts or grants or loans of

funds or property or fees for administering any federal rental subsidy

contract or financial or other aid in any form, including but not

limited to mortgage insurance, from the federal government or any agency

or instrumentality thereof, or from the state or any agency or

instrumentality thereof, or from any other source and to comply, subject

to the provisions of this article, with the terms and conditions

thereof;

19. As security for the payment of the principal of and interest on

any bonds so issued and any agreements made in connection therewith, to

pledge all or any part of its revenues;

20. Notwithstanding the provisions of this chapter or of any other

law, general, special or local, whenever the corporation shall find that

the maximum rentals charged tenants of the dwellings in any project

financed by the corporation in whole or in part shall not be sufficient,

together with all other income of the mortgagor, to meet within

reasonable limits all necessary payments to be made by the mortgagor of

all expenses including fixed charges, sinking funds, reserves and

dividends, to request the mortgagor to make application to vary the

rental rate for such dwellings so as to secure sufficient income, and

upon failure of the mortgagor to take such action within thirty days

after receipt of written request from the corporation to do so, to

request the supervising agency to take action upon such agency's own

motion so to vary such rental rate, and upon failure of the supervising

agency either upon application by the mortgagor or upon its own motion

so to vary such rental rate within sixty days after receipt of written

request from the corporation to do so, to vary such rental rate by

action of the corporation;

21. Subject to the provisions of any contract with noteholders and

bondholders, to acquire and to contract to acquire, by assignment or

otherwise, or to take as collateral security, any mortgage securing a

loan, including any construction loan, and any note or bond evidencing

indebtedness thereon, made by the city of New York in accordance with

the provisions of article two of this chapter and any contract or

arrangement, including any subsidy contract or arrangement, related to

such mortgage, and the receipts to be derived from any of the foregoing,

and to assume and fulfill and contract to assume and fulfill the

obligations of the mortgagee or lender thereunder, and to reassign and

to contract to reassign to the city of New York any such mortgage, note,

bond, contract or arrangement and the receipts to be derived therefrom.

22. Subject to the provisions of any contract with noteholders and

bondholders, to assign or pledge any mortgage, bond, note, contract,

security, or arrangement and the receipts to be derived from any of the

foregoing, acquired pursuant to this section;

22-a. Subject to the provisions of any contract with noteholders and

bondholders, to acquire and to contract to acquire, by assignment or

otherwise, any mortgage securing a loan, including any construction

loan, and any note or bond evidencing indebtedness thereon, made by the

city of New York in accordance with the provisions of article two of

this chapter and any contract or arrangement, including any subsidy

contract or arrangement, related to such mortgage, and to modify or to

satisfy such mortgage and accept or make a new mortgage or mortgages and

other instruments, including mortgages to secure residual indebtedness

and instruments to evidence residual receipts obligations as defined in

section twelve of this law and to enter into amended subsidy contracts,

and (i) to hold or to sell, assign or otherwise dispose of such mortgage

or mortgages, including those made in substitution thereof and any

related instruments, contracts and arrangements, or to issue obligations

secured by such mortgage or mortgages, and pay to the city of New York

the proceeds of such sale, assignment or other disposition of such

mortgages and the proceeds from the issuance of such obligations, less

legal and other fees, costs and expenses and other amounts paid or

incurred by the corporation, including discounts, costs incurred by the

corporation related to the sale of such mortgages or to a sale, if any,

of its obligations, fees payable to other governmental units, the cost

incurred by the corporation under an agreement with the federal

government pursuant to subdivision twenty-two-b of this section, amounts

required to establish escrow accounts or reserves for the issuance of

mortgage insurance, the cost of satisfying such minimum property

standards or of installing such life safety devices as may be required

by the federal government which standards or devices are in addition to

any requirement imposed by the city of New York as mortgagee, amounts

loaned to the mortgagor to establish such escrow accounts or reserves or

to satisfy such minimum property standards or to install such life

safety devices, closing and other costs related to obtaining mortgage

insurance from the federal government such other costs as the federal

government may from time to time impose, any amounts not previously

advanced under mortgages modified or satisfied under this subdivision as

determined by the supervising agency, and an amount not to exceed twenty

million dollars at any one time, which shall be held in a revolving

account for a period not to exceed eighteen months from the time of the

first deposit therein, to pay any or all of the costs, fees and expenses

and other amounts attributable to issuing obligations secured by such

mortgage or mortgages, or to making and insuring mortgages pursuant to

this subdivision, and any balance remaining in such revolving account

shall be paid to the city of New York no later than eighteen months

after the time of the first deposit therein, and (ii) to assign or

reassign any such mortgage or mortgages, instruments and related

contract or arrangement to the city of New York. If the corporation

sells any such mortgages for an amount in excess of the principal amount

thereof at the time of such sale, or if the corporation issues

obligations secured by any such mortgages and the yield on such

mortgages is greater than the yield on such obligations (the yield on

such mortgages and obligations having been calculated in accordance with

section one hundred three of the internal revenue code of the United

States and regulations thereunder), the corporation shall pay to the

city of New York such premium and any such differential, but only to the

extent such differential is not paid to or for the benefit of the

holders of such obligations; and such premium and differential, to the

extent so paid to such city, shall be used and credited by the city of

New York in accordance with subdivision four-b of section twenty-three-a

of this chapter as if such city had sold such mortgages or issued such

obligations pursuant to section twenty-three-a of this chapter. The

corporation shall not modify or satisfy a mortgage pursuant to this

subdivision unless such modification or satisfaction is first approved

by the supervising agency.

22-b. To contract with the federal government for the sharing of any

claim paid by the federal government on account of any insurance of a

mortgage, provided that the corporation's share of any such claim shall

not exceed fifty percent of the insurance benefits paid by the federal

government, and further provided that the corporation's share of such

claims under any such contract shall not exceed five percent of the

outstanding principal amount of all mortgage loans of the corporation

insured by the federal government and included within such contract.

23. To make loans secured by mortgages insured or coinsured by the

federal government to the owners of multiple dwellings in such amounts

as may be required for the rehabilitation of such multiple dwellings or,

if such owner acquires the multiple dwelling for the purpose of such

rehabilitation or owns the multiple dwelling subject to an outstanding

indebtedness, in such amounts as may be required for the cost of such

acquisition or for the refinancing of such outstanding indebtedness, but

in no event in such amounts as would exceed the mortgage limits imposed

by the federal government, and to regulate or restrict such owner as to

rents or sales, charges, capital structure, rate of return and method of

operation and to make loans secured by mortgages insured or coinsured by

the federal government to the owners of projects in such amounts as may

be required for the acquisition, construction or improvement of such

projects, but in no event in such amounts as would exceed the mortgage

limits imposed by the federal government, or ninety percent of the

actual cost of such acquisition, construction or improvement, whichever

is less, and to regulate or restrict such owner as to rents or sales,

charges, capital structure, rate of return and method of operation. The

owner may, with the approval of the corporation, fix maximum rentals to

be charged tenants of the dwellings in any multiple dwelling or project

aided by a loan pursuant to this subdivision. The corporation, upon its

own motion, or upon application by the owner or by the federal

government, may vary such rental rate from time to time so as to secure,

together with all other income of the multiple dwelling, sufficient

income for it to meet within reasonable limits all necessary payments to

be made by the owner of all expenses; provided that no variation in a

rental rate shall be effective unless approved by the federal

government. The corporation or the department of housing preservation

and development shall notify occupants of the multiple dwelling, if

there be any, of the contemplated rehabilitation and shall advise them

of the expected rental increase to result therefrom, and a

representative of the corporation or the department of housing

preservation and development shall meet or offer to meet at least once

with the occupants. The corporation shall promulgate such rules and

regulations with respect to multiple dwellings and projects financed

pursuant to this subdivision and the owners of such multiple dwellings

and projects as may be necessary to carry out the provisions of this

subdivision, provided that such rules and regulations shall contain

provisions as to income limitations relating to admission into occupancy

of the dwelling units of such projects to the same effect as are

contained in section thirty-one of this chapter and for the dwelling

units of such other multiple dwellings to the same effect as are

contained in subdivision three of section four hundred one of this

chapter. As used in this subdivision, the term "multiple dwelling" shall

include an existing building or structure which is to be converted into

a class A multiple dwelling.

23-a. Subject to the provisions of any contract with noteholders and

bondholders, (i) to make and contract for the making of mortgage loans

for the construction or rehabilitation of projects which the New York

city housing authority has agreed to purchase on a turnkey basis in

accordance with a federally assisted program for the production of

public housing as authorized by the United States housing act of

nineteen hundred thirty-seven as amended to the date of enactment of

this subdivision of this section, upon the completion of such

construction or rehabilitation, and (ii) to make and to contract for the

making of loans to, or to purchase loans from, banking or other lending

institutions for the purpose of financing such construction or

rehabilitation.

23-b. In order to increase the availability of safe and sanitary

dwelling accommodations within the financial reach of families and

persons of low income, to acquire and to contract to acquire, by

assignment or otherwise, or to take as collateral security, any

federally guaranteed security evidencing indebtedness on a mortgage

securing a loan, including any construction loan, and the receipts to be

derived therefrom and to assign or reassign and to contract to assign or

reassign any such security and the receipts to be derived therefrom,

subject in each case, to the provisions of any contract with noteholders

and bondholders;

* 23-c. (1) Subject to the provisions of any contract with noteholders

and bondholders (a) to make and contract for the making of loans for the

acquisition, construction or rehabilitation of housing accommodations

containing five or more dwelling units (i) for the purpose of providing

housing accommodations for occupancy by persons and families for whom

the ordinary operations of private enterprise cannot provide an adequate

supply of safe, sanitary and affordable housing accommodations or (ii)

for units located in an area designated as blighted pursuant to article

fifteen or sixteen of the general municipal law, or as certified by the

New York city department of housing preservation and development as

being located in an area which is blighted, and (b) to make and to

contract for the making of loans to or to purchase loans from lending

institutions for the purpose of financing mortgage loans for such

acquisition, construction or rehabilitation, and (c) to establish such

regulatory requirements with regard to such housing accommodations as

may be deemed appropriate by the corporation to achieve the objectives

of this article, and articles fifteen and sixteen of the general

municipal law notwithstanding any other provisions of this chapter to

the contrary. Any notes and bonds issued pursuant to this subdivision

shall not be secured by any capital reserve fund established pursuant to

section six hundred fifty-six of this article.

(2) With regard to any loan made pursuant to this subdivision and

notwithstanding the provisions of, or any regulation promulgated

pursuant to, the emergency housing rent control law, the local emergency

housing rent control act, or local law enacted pursuant thereto, the

rent stablization law of nineteen hundred sixty-nine, or the emergency

tenant protection act of nineteen seventy-four, the owner of a project

otherwise subject to any such law or act, with the approval of the

agency, shall establish the initial rent for each dwelling unit within

the project. The corporation shall notify occupants of the project, if

any, of any such proposed rental establishment and offer to meet at

least once with the occupants prior to its approval.

(3) The powers granted by this subdivision may be exercised only if

(a) obligations of the corporation have been issued to fund the loan

made or purchased by the corporation and such obligations have received

an investment grade rating from a recognized rating agency; (b) the loan

made or purchased by the corporation is fully secured as to principal

and interest by insurance or a commitment to insure by the state of New

York mortgage agency or New York city residential mortgage insurance

corporation or by the general credit of a bank, national bank, trust

company, savings bank, savings and loan association, insurance company,

governmental agency of the United States, or any combination thereof; or

(c) obligations of the corporation are purchased by a bank, national

bank, trust company, savings bank, savings and loan association,

insurance company, governmental agency of the United States, which for

purposes of this subdivision, include the federal home loan mortgage

corporation, the federal national mortgage association, the governmental

national mortgage association, and any successor of the foregoing, or

any wholly-owned subsidiary or combination thereof.

* NB Repealed July 23, 2027

23-d. To and shall develop, promote and ensure that, where possible,

minority groups which traditionally have been disadvantaged, and women

are afforded equal opportunity for contracts in connection with

development and construction contracts for developments, facilities and

projects financed by the issuance of bonds, notes and other obligations

of the corporation.

23-e. Subject to the provisions of any contract with noteholders and

bondholders, to refinance or acquire mortgage loans made for multiple

dwellings by private lenders pursuant to article eight-A or fifteen of

this chapter; provided that the corporation shall not be permitted

pursuant to this subdivision to acquire a mortgage loan, unless such

acquisition is in connection with a refinancing of the property for

which such mortgage loan was made.

23-f. To service mortgage loans made by private or governmental

lenders for multiple dwellings, provided that each such mortgage loan

shall have been made either (i) pursuant to this chapter, or (ii) in

conjunction with another mortgage loan made by the city of New York.

23-g. Subject to the provisions of any contract with noteholders and

bondholders, to acquire mortgage loans made by the city of New York

pursuant to article eight-A of this chapter or section ninety-nine-h or

article sixteen of the general municipal law or to acquire a

participation interest in such mortgage loans.

23-h. Subject to the provisions of any contract with noteholders and

bondholders and relating to the purpose of providing housing

accommodations for occupancy by persons and families for whom the

ordinary operations of private enterprise cannot provide an adequate

supply of safe, sanitary and affordable housing accommodations or for

units located in an area designated as blighted pursuant to article

fifteen or sixteen of the general municipal law, or as certified by the

New York city department of housing preservation and development as

being located in an area that is blighted, the corporation is hereby

authorized to carry out, by loans or guaranties, the following purposes:

(i) to preserve, repair, renovate, upgrade, improve, modernize,

rehabilitate or otherwise prolong the useful life of dwelling

accommodations;

(ii) to construct dwelling accommodations and undertake site

preparation related thereto;

(iii) to restore abandoned, vacant or occupied city or privately-owned

dwelling accommodations to habitable condition;

(iv) to assist in the acquisition of buildings that contain or are

expected to contain dwelling accommodations; and

(v) to facilitate the disposition of city-owned buildings that contain

or are expected to contain dwelling accommodations.

24. To contract with any of its subsidiary corporations to render such

services as such subsidiary corporation may request, including, but not

limited to, the use of the premises, personnel and personal property of

the corporation, and to provide for reimbursement to the corporation

from such subsidiary corporation for any expenses necessarily incurred

by the corporation in carrying out the terms of any such contract.

25. To do any and all things necessary or convenient to carry out its

purposes and exercise the powers expressly given and granted in this

article.