Title 9 Part 1760

With the consent of the division, a housing company may satisfy its existing mortgage and enter into a new State-aided or private mortgage, and thereafter continue under the Mitchell-Lama program. Such refinance may be in connection with a redevelopment plan under which the housing company enters into multiple regulatory agreements with the division and other agencies under a variety of subsidy programs to raise capital for rehabilitation work and to help maintain the premises as safe, decent, and affordable housing. When a refinancing is part of a redevelopment plan that involves more than one governmental agency with supervisory authority, some of the requirements of this Part may be eliminated pursuant to section 1700.6 of this Chapter.

No less than 30 days prior to the anticipated date of closing, the housing company must submit to the division a request for approval of the refinance with the following information and supporting documents:

At the lender's request, under appropriate circumstances the division may agree to modifications of its supervisory role, the terms of which may be embodied in an inter-agency memorandum of understanding, multi-party agreement, or approval letter issued by the division; including, but not limited to, the following:

The division may agree to promptly act within its authority to remedy a default on a loan, including proceedings to re-establish the rents/maintenance, provided that the division will not agree to act in a predetermined manner, but must retain discretion to choose the appropriate remedy under the circumstances.

The division may permit the lender to hold, free of encumbrance by the division, certain reserve funds, such as repair and replacement reserves pending completion of capital work, and to encumber those accounts as security for the loan which can be withdrawn without the division's approval in the event of a default.

The division may permit the lender to hold, free of encumbrance by the division, certain escrow funds for payment of debt service, taxes, and insurance, that are normally held in accounts controlled by the division.

The division may modify its procedures for supervision of capital work, which normally includes review of contracts, specifications, bids, change orders, and approval of progress payments in order to insure that the division's participation is not duplicative of another agency's functions, and does not unduly delay completion of the work.

No later than two weeks prior to the anticipated date of closing, the housing company must submit the following proposed documents for the division's review:

In reviewing the loan documents, the division may consider various factors, including but not limited to the fact that they:

Where the financing is not otherwise coordinated with another State governmental agency, the mortgage, multi-party agreement, division's letter approving the refinance, other security agreements, reserve agreements, and assignment of leases must contain a clause containing the following or substantially similar language:

"Nothing in this document, or any other document executed in connection with this refinance transaction, has the effect of diminishing or otherwise modifying the authority of the Commissioner of the Division of Housing and Community Renewal to supervise the borrower under article II of the Private Housing Finance Law and regulations promulgated there under except to the extent expressly set forth in a multi-party agreement or approval letter issued by the division."