N.Y. Public Authorities Law § 2405-f: New York state community restoration fund

§ 2405-f. New York state community restoration fund. (1) Definitions.

For the purposes of this section, the following terms shall have the

following meanings:

(a) "fund" shall mean the New York state community restoration fund

established pursuant to subdivision two of this section;

(b) "residential home loan" shall mean a first or subordinate lien

loan, including mortgage loans purchased by the agency under section

twenty-four hundred five-b of this part, that is secured by a borrower's

interest in: (i) residential real property, including as defined in

section thirteen hundred five of the real property actions and

proceedings law, and any improvements or structures thereon; (ii) a

share or shares of a cooperative corporation that entitles a borrower to

a housing unit; or (iii) a residential structure that is part of a

condominium development. Residential home loan shall also include

interest, taxes, homeownership associations fees, carrying charges, and

other liens encumbering the residence;

(c) "vacant and abandoned" residential real property shall mean (i)

residential real property, as defined in section thirteen hundred five

of the real property actions and proceedings law, where the property is

not occupied by the tenant, as that term is defined in section thirteen

hundred five of the real property actions and proceedings law,

homeowner, or mortgagor and (ii) either:

(A) the property is a risk to the health, safety, or welfare of the

public, or any adjoining or adjacent property owners, due to acts of

vandalism, loitering, criminal conduct, or physical destruction or

deterioration of the property; or

(B) the relevant governmental authority has declared the property

unfit for occupancy and either ordered that the property remain vacant

and unoccupied or ordered that the property be demolished; or

(C) each homeowner or mortgagor has separately informed the mortgagee,

in writing, that they do not intend to occupy the property in the

future, and

(iii) where indicia of lack of occupancy may include, but shall not be

limited to: (A) overgrown or dead vegetation; (B) accumulation of

newspapers, circulars, flyers, or mail; (C) past due utility notices,

disconnected utilities or utilities not in use; (D) accumulation of

trash, refuse or other debris; (E) absence of window coverings such as

curtains, blinds, or shutters; (F) absence of furnishings or personal

items consistent with residential habitation; (G) one or more boarded,

missing or broken windows; (H) the property is open to casual entry or

trespass; (I) the property has a building or structure that is or

appears structurally unsound or has any other condition that presents a

potential hazard or danger to the safety of persons, and

(iv) where such residential real property shall not be considered

"vacant and abandoned" if, on the property: (A) there is an unoccupied

building which is undergoing construction, renovation, or rehabilitation

that is proceeding to completion, and the building is in compliance with

all applicable ordinances, codes, regulations, and statutes; (B) there

is a building that is secure, but is the subject of a probate action,

action to quiet title, or other similar ownership dispute; (C) there is

a building damaged by natural disaster upon declaration of a state

disaster emergency by the governor pursuant to section twenty-eight of

the executive law relating to any claim arising from the cause of such

declaration, while awaiting funds to repair; or (D) there is a building

occupied on a seasonal basis, but otherwise secure;

(d) "homeowner" shall mean a natural person who has a legal interest

in the property other than a tenant and is the occupant of a residence

that secures such residential home loan;

(e) "eligible institution" shall mean a community development

financial institution or a community development financial institution

partnered with a not-for-profit, housing counseling agency, land bank,

or other local government entity, or any of the aforementioned, either

on their own or partnered with a community development financial

institution. An eligible community development financial institution

shall have a record of success in serving investment areas or targeted

populations; and/or shall have agreed to expand its operations into a

new investment area or to serve a new targeted population, offer more

products or services, or increase the volume of its current business.

Eligible not-for-profits shall, among other things, have the ability to:

undertake repair or rehabilitation efforts; carry out property and asset

management, including servicing, undertake demolition; and/or provide

assistance in finding housing options, market properties for sale or

rental; coordinate, provide, and/or connect homeowners to counseling,

mediation, legal representation, and negotiate on behalf of homeowners

seeking a residential home loan payment modification, provide training

and support for counselors, mediators, and attorneys regarding such

assistance to homeowners, as well as provide credit counseling;

(f) "community development financial institution" or "CDFI" shall mean

an organization located in this state which has been certified as a

community development financial institution by the federal community

development financial institutions fund, as established pursuant to 12

U.S.C. 4701 et seq., as amended from time to time;

(g) "investment area" means a geographic area that is determined by

the agency, from time to time, as meeting criteria indicative, as of

such time, of economic distress, including unemployment rate;

foreclosure rate; percentages and numbers of low-income residents; per

capita income and per capita real property wealth; and such other

indicators of distress as the agency shall determine. Economically

distressed areas may include counties, cities, municipalities, block

numbering areas, and census tracts. The program shall to the fullest

extent possible strive for regional diversity in providing foreclosure

relief and assistance consistent with the program goals to communities

throughout New York state that are impacted by the foreclosure crises;

(h) "lender" means banks as defined in section twenty-four hundred two

of this part, investors including institutional investors, the agency,

any state agency authorized to acquire and hold residential home loans,

mortgage servicers and other private, non-bank entities that may own and

hold a mortgage and mortgage note, the federal housing administration,

the U.S. department of agriculture rural development corporation, the

U.S. department of housing and urban development, the federal housing

finance agency, and any privately owned, publicly chartered entities and

wholly-owned corporate instrumentalities of the United States within the

U.S. department of housing and urban development created by congress to

encourage lending and reduce costs primarily in the housing sector of

the economy; and

(i) "residence" means residential real property as defined in section

thirteen hundred five of the real property actions and proceedings law.

(2) The agency is hereby directed to establish and administer a fund

to be known as the "New York state community restoration fund," which

shall consist of monies deposited therein. Nothing contained in this

section shall prevent the agency from receiving grants, gifts, or other

monies from other sources, or bequests and depositing them into the

fund. The agency shall not commingle the monies in such fund with any

other monies of the agency.

(3) The monies in the fund shall be eligible to be used by the agency

under program guidelines established by the board of directors of the

agency, in consultation with an advisory council to be created by the

agency comprised of a minimum of seven members, where a majority of the

membership of the council will be comprised of representatives from

non-profit members of the community with knowledge of foreclosures,

housing, or community development needs in communities hard hit by

foreclosures. The guidelines shall include, among other things,

requirements to ensure that fund monies are expended based upon

demonstrable community needs, for the purposes set forth in this

subdivision, and may also be awarded by the agency to eligible

institutions following the process established pursuant to subdivision

four of this section, to:

(a) acquire, purchase, or sell residences and/or mortgage notes on

residential home loans and residences at or below market rates, or at

par if so required to satisfy legal or programmatic restrictions

applicable to the purchase of any mortgage loans expected to be

acquired, from lenders, or from local, state, and/or the federal

government at auction, short sale, or other private or public sale with

the intent to:

(i) where possible, provided the homeowner can demonstrate an economic

hardship, as such term is defined under the agency's guidelines, in

consultation with the advisory council, modify the residential home loan

to an affordable rate to keep the current homeowners in the property;

(ii) permit the homeowner, provided the homeowner can demonstrate an

economic hardship, as such term is defined under the agency's

guidelines, in consultation with the advisory council, to transfer his

or her ownership interest in the home to the agency or to an eligible

institution and to remain in the residence as a tenant on agreed-upon

terms, or obtain assistance from the agency or an eligible institution

to acquire a new affordable residence;

(iii) rehabilitate distressed properties; and/or

(iv) demolish homes that are dilapidated or reasonably beyond repair.

(b) make grants and loans to eligible homeowners or to potential

buyers of residences in the investment areas; or

(c) fund not-for-profit developers, affordable housing developers, and

not-for-profit agencies to acquire vacant and abandoned properties or

other real property, mortgages, or mortgage notes acquired under this

program, and develop such properties into affordable housing and to work

with homeowners in the investment area eligible to be assisted under

this section, through activities such as foreclosure prevention

counseling, providing new homeowner training, home repair and

rehabilitation, property and asset management, demolition, and marketing

properties for sale and rental.

(4) (a) In awarding funding to eligible institutions, the agency shall

select from eligible institutions pursuant to criteria established by

the agency's board of directors, in consultation with the advisory

council established in subdivision three of this section, which criteria

shall include, but not be limited to:

(i) the experience and background of the eligible institution's board

of directors or management team;

(ii) the extent of need within the investment areas or targeted

populations;

(iii) the extent of economic distress within the investment areas or

the extent of need within the targeted populations;

(iv) the extent of the eligible institution's current and planned

community involvement;

(v) the extent to which the eligible institution will increase its

resources through coordination with other eligible institutions or

encourage collaborative applications by multiple eligible institutions;

(vi) in the case of an institution with a prior history of serving

investment areas or targeted populations, the extent of success in

serving such areas or populations;

(vii) the extent to which eligible institutions would use funds to

restructure residential home loans to allow homeowners to continue to

occupy their residences; and

(viii) other factors deemed to be appropriate by the agency.

(b) In allocating funding to eligible institutions, the agency shall

be authorized to make funding available in any manner necessary for such

eligible institution to participate in auctions disposing of mortgage

notes or residences.

(5) The agency's board of directors shall establish, in consultation

with the advisory council established in subdivision three of this

section, guidelines to:

(a) develop application and reporting procedures for eligible

institutions to use to apply for funds to carry out the provisions of

this section and criteria for use by the eligible institutions that

receive funds pursuant to this section to evaluate applications for

assistance from homeowners;

(b) develop guidelines for funds issued to and loans issued by the

agency and by eligible institutions, including guidelines for use by the

agency for purchase and sales of residences and/or mortgages and notes;

(c) establish the procedure by which eligible institutions are

selected and compensated, including establishing the relative importance

and/or weight given to each criterion;

(d) establish terms by which eligible institutions shall maintain and

utilize funds received pursuant to this section, provided however that

eligible institutions shall keep such funds separate from all other of

its business or fiduciary accounts; and

(e) establish terms by which the eligible institutions shall repay the

fund for monies allocated to them pursuant to this section, if

applicable.

(6) Nothing in this section shall preclude an eligible institution

from working with or coordinating activities and/or services with any

entity that handles and facilitates the transfers of mortgage notes

and/or property to eligible entities under this section; provided,

however, that any funds awarded to an eligible institution shall only be

used to advance the purposes of this section.

(7) The agency shall submit a report to the governor, the speaker of

the assembly, the minority leader of the assembly, the temporary

president of the senate, and the minority leader of the senate on or

before the first of February each year. Such report shall include, but

not be limited to, a detailed description of the use of funds by the

agency for programs under this section, and of the use of funds for each

eligible institution receiving funds under this section.