9 NYCRR Part 1904 - Executive Department

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Source version current through Sep 15, 2021

All 8 displayed sections in this Part carry the same compiled date. Status and warnings stay on each section.

9 NYCRR 1904.1 - Regulatory agreements

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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)The corporation shall enter into a regulatory agreement with each applicant who has been accepted as a project recipient or local program administrator, provided that the conditions set forth in the award have been satisfied. The regulatory agreement shall provide that regulation of the project shall extend over the greater of the period of the grant or loan or for 15 years in the case of homesteading projects, or 20 years in the case of condominium projects, cooperative projects and rental projects, after completion of the construction, rehabilitation or conversion of the project.

(b)If the project recipient is a private developer, the regulatory agreement shall require the private developer to make an equity investment of the greater of:

(1)2 ½ percent of project costs; or

(2)5 percent of project costs less grants which are to be applied to said costs.

The term grants as used in this paragraph shall be deemed to include loans which are not required to be repaid. For the purposes of this subdivision, property which is obtained through a governmental program or from a governmental unit for a public purpose shall be deemed to have no equity value. For the purposes of this subdivision, property owned or acquired and contributed to the project shall be deemed to have an equity value of 25 percent of its preconstruction appraised value. The equity investment is to be made at or prior to the construction loan closing. Equity value may also be recognized for contributions to the acquisition of property which is financed in part by a payment, grant or loan made by the corporation. The equity value in such case shall also be limited to the 25 percent of the actual investment made by the private developer. The corporation may, in its discretion, consent to the establishment of a different equity value if it is necessary to the project. Among the criteria the corporation shall consider in exercising its discretion are:

(i)cost incurred by the owner to acquire the property;

(ii)the preconstruction appraised value; and

(iii)the suitability of the property for development of low income housing.

A private developer is not precluded from making a greater equity investment than that required.

(c)The regulatory agreement shall provide that the restrictions on the use of the eligible property are real covenants that shall run with the land until the termination of the regulatory period or the payment, grant or loan made by the corporation is paid back to the corporation, whichever is later.

(d)The local program administrator shall enter into a contract with each subrecipient, subject to review as to form by the corporation, which shall include the provisions specified in subdivisions (a), (b) and (c) of this section.

(e)

(1)The corporation may provide that where a lender shall have foreclosed or obtained title to the project in accordance with law and provisions of the mortgage, the projects or particular residential units therein shall not be subject to one or more provisions of the act with the exception of section 1102(3)(g) of the act.

(2)The corporation may not make the provisions referred to in paragraph (1) of this subdivision unless the corporation shall first have found that it is necessary in order to enable a project owner to obtain a mortgage loan from a lender other than the corporation.

9 NYCRR 1904.2 - Disbursements

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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)The corporation shall make payments for eligible construction, rehabilitation or conversion costs on a project basis, conditioned upon the submission of satisfactory information by the project recipient or local program administrator and compliance with procedures specified by the corporation. Where an eligible applicant has transferred ownership of a project and assigned the regulatory agreement with approval of the corporation, disbursements may be made directly to the assignee.

(b)The amount of any Housing Trust Fund payment, loan or grant for any project shall not exceed an average of $55,000 per unit. The corporation may, in its discretion, provide a payment, loan or grant in excess of $55,000 but not in excess of $75,000. Among the criteria the corporation shall consider in exercising its discretion are:

(1)the average cost of construction in the area;

(2)the location of the project; and

(3)the impact of the additional funding on the affordability of the project for the intended occupants of such project.

Any construction, rehabilitation or conversion costs that exceed this ceiling must be paid for by sources other than the Housing Trust Fund.

(c)The corporation may make payments, grants or loans which exceed the limit imposed in subdivision (b) of this section only in areas of the State where the president of the corporation determines that the cost of construction, rehabilitation or conversion substantially exceed said limit. That part of any payment, grant or loan which exceeds said limit must be made from the High Cost Areas Demonstration Account as established by the Capital Projects Budget or any subsequent amendments or renewals thereof.

(d)The corporation may deposit, pursuant to an escrow agreement satisfactory to the corporation, a payment, grant or loan directly with a lending institution at, prior to or after the initial closing of a project.

9 NYCRR 1904.3 - Repayment provisions

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Dates and status

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

Each regulatory agreement shall make provision for the repayment of payments, grants or loans to the Housing Trust Fund by recipients or subrecipients, their successors or assigns.

9 NYCRR 1904.4 - Performance supervision

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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)The corporation shall review at periodic intervals at least annually the performance of project recipients and local program administrators under their respective regulatory agreements with the corporation. At its discretion the corporation may also review the performance of subrecipients.

(b)During the construction phase of any project assisted by the trust fund, should the corporation determine that there is evidence of fraud or malfeasance by a project recipient, local program administrator or subrecipient in the performance of any aspect of the construction, conversion or rehabilitation work or payment process, the corporation reserves the right to recapture from the project recipient or local program administrator all funds awarded to that recipient or administrator under its regulatory agreement.

(c)Program recipients and local program administrators shall provide such periodic reports as the corporation may require to facilitate the evaluation process. The reports shall include, but shall not be limited to, the following items:

(1)progress of proposed construction, rehabilitation or conversion(s);

(2)the status of project operations; and

(3)annual audited financial statements in accordance with generally accepted auditing standards or such other financial reports as the corporation may require.

(d)Should the corporation find that there has been substantial nonperformance or default of the regulatory agreement for reasons other than those over which the project recipient or local program administrator has no effective control and such condition is not cured or remedied within a period of time (as established in the regulatory agreement or other instrument) after notice to the recipient of such finding, the corporation shall have the right to terminate or modify the regulatory agreement within a period of time (as established in the regulatory agreement or other instrument) after written notice has been given, or to withhold the release of funds. The local program administrator shall follow a procedure similar to that described in this subdivision to terminate or modify a contract with a subrecipient.

9 NYCRR 1904.5 - Defaults on mortgages not made by the corporation

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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 cases of projects subject to mortgages made by any lender, except as to loans made by the corporation:

(a)the lender must give notice to the corporation of any default in payment of principal or interest on such mortgage by the owner;

(b)the corporation, shall have 60 days upon receipt of such notice to cure the default and make the project economically viable by:

(1)assisting the owner in entering into a mortgage modification agreement with the lender;

(2)finding an eligible applicant to purchase the project and assure its obligations; or

(3)such other action as deemed appropriate, consistent with the provisions of the act; and

(c)the provisions of this section shall be made part of the regulatory agreement or other instrument.

9 NYCRR 1904.6 - Limitation of profit or rate of return of private developers

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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 private developer shall be entitled to a limited profit or rate of return of investors in accordance with a formula established by the corporation. Said formula may provide for alternatives which can include short term and long term recovery methods of the limited profits or rate of return of investors.

9 NYCRR 1904.7 - Reserve requirements

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Dates and status

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

The corporation may require that the following reserves be created by the project recipient:

(a)working capital fund;

(b)replacement reserve; and

(c)operation reserve.

To the extent permitted by the act and these regulations, the working capital fund and the replacement reserve may be funded by the payment, grant or loan of the corporation. The conditions and requirements of said reserves shall be set forth in the regulatory agreement.

9 NYCRR 1904.8 - Participation by minority group members and women -contract requirements

Later State Register activity may affect this section.

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Dates and status

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

The regulatory agreement shall contain such provisions as are necessary to effectuate the provisions of article 15-A of the Executive Law and the regulations promulgated thereby. These provisions include, but are not limited by, the following provisions:

(a)a good faith effort to solicit active participation by enterprises identified in the directory of certified businesses maintained by the Governor's Office of Minority and Women's Business Development;

(b)agreement to be bound by the provisions of section 316 of the Executive Law; and

(c)requirement that any subcontractor comply with subdivisions (a) and (b) of this section.

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