9 NYCRR Part 1760 - Executive Department

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Source version current through Sep 15, 2021

All 7 displayed sections in this Part carry the same compiled date. Status and warnings stay on each section.

9 NYCRR 1760.1 - Introduction

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021

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.

9 NYCRR 1760.2 - Grounds for approval of refinance

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021

(a)In reviewing a request to refinance, the division may consider various factors including but not limited to the fact that the refinance will:

(1)reduce debt service in order to minimize increases in rent or maintenance;

(2)raise additional funds for current capital improvements;

(3)bolster reserve funds for future capital improvements;

(4)facilitate a redevelopment plan involving new sources of funding;

(5)permit continuation of the real property tax exemption;

(6)permit continuation of existing loans, grants, or subsidies.

(b)In order to facilitate an approved refinance, the division may consent to modify its supervision to avoid unnecessary duplication with other subsidy programs or supervising agencies, allow the lender greater participation in the supervision of the housing company's use of loan proceeds and reserve and escrow funds, and avoid undue regulatory burden upon the housing company.

9 NYCRR 1760.3 - Request for approval of refinance

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021

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:

(a)reasons for refinance; if housing company is a cooperative, attach a copy of the resolution authorizing the refinance;

(b)existing mortgagee, approximate amount of mortgage, and brief description of mortgagee's pre-payment procedures;

(c)existing government subsidies, the responsible agency, and a statement of what effect, if any, payment of the existing mortgage will have upon the subsidy;

(d)impact, if any, of refinance on real property tax abatement;

(e)new lender, amount of new loan, interest rate, application or commitment fee, and method by which new lender was selected; attach a copy of the term sheet or commitment letter;

(f)credit enhancements and responsible agency;

(g)post-transaction sources of funding and responsible agencies;

(h)where transaction involves transfer of development, name of new owner, description of ownership structure, and request for approval of new owner with completed disclosure questionnaire;

(i)capital work, and the estimated cost thereof, to be done with loan proceeds; attach a copy of current physical condition survey or consultant's report and sources and uses summary;

(j)amount of reserves to be funded from proceeds of loan;

(k)any severance of housing company property, including justification for the severance, and description and value of the parcel to the severed; attach a copy of a certified appraisal;

(l)analysis of current rent/maintenance structure to show sufficiency to cover new debt service and other expenses, and if not, amount of rent increase applied for and status of application;

(m)request and justification for any modification of the division's supervisory role such as those set forth in section 1760.4 of this Part;

(n)new managing agent, if any, with request for approval of new managing agent;

(o)where post-transaction funding is provided by the Housing Finance Agency or Empire State Development Corporation, documentation upon which the division may make findings required by sections 2, 26-b, and 44-c(2) of the Private Housing Finance Law; and

(p)anticipated date of closing.

9 NYCRR 1760.4 - Request for modification of division's supervisory role

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021

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:

(a)Remedies for default.

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.

(b)Administration of reserve funds.

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.

(c)Administration of escrow funds.

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.

(d)Supervision of capital work.

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.

9 NYCRR 1760.5 - Submission of loan documents for division's review

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021

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:

(a)multi-party agreement, if any, to be signed by the division;

(b)mortgage and note;

(c)security agreements and those involving reserve or escrow accounts;

(d)assignment of leases;

(e)new regulatory agreements to which the division is a party;

(f)any other document which the housing company believes requires the division's approval.

9 NYCRR 1760.6 - Standards for loan documents

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021

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

(a)provide sufficient notice to the parties to the transaction and their successors and assigns that the housing company is supervised by the division and subject to the private housing finance law and regulations;

(b)do not conflict with any provision of the private housing finance law or regulations;

(c)are not unfair or unduly burdensome to the housing company;

(d)clearly reflect any modifications of the division's supervisory role;

(e)do not affect the division's authority to supervise the housing company except to the extent consented to by the division.

9 NYCRR 1760.7 - Required clause in loan documents

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Dates and status

NYCRR title agency: Executive Department
Section status: Section source receipt
Source version current through: Sep 15, 2021

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."

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