New York Laws
Part 1
2401 - Legislative Findings.

§ 2401. Legislative findings. * It is hereby found and declared that
there continues to exist throughout the state a seriously inadequate
supply of safe and sanitary dwelling accommodations, including
accommodations for persons and families of low income, and a seriously
inadequate supply of credit available for new residential improvement
loans at carrying charges within the financial means of persons and
families of low or moderate income. This condition is contrary to the
public interest and threatens the health, safety, welfare, comfort and
security of the people of the state. It is found and declared that one
major cause of this condition has been recurrent, cyclical shortages of
funds in private banking channels available for residential mortgages.
Such shortages have contributed to drastic reductions in construction
starts of new residential units. In addition, they have made the sale
and purchase of existing residential units a virtual impossibility in
many parts of the state. The ordinary operations of private enterprise
have not in the past corrected these conditions.

* NB Effective until July 23, 2025

* It is hereby found and declared that there continues to exist
throughout the state a seriously inadequate supply of safe and sanitary
dwelling accommodations, including accommodations for persons and
families of low income. This condition is contrary to the public
interest and threatens the health, safety, welfare, comfort and security
of the people of the state. It is found and declared that one major
cause of this condition has been recurrent, cyclical shortages of funds
in private banking channels available for residential mortgages. Such
shortages have contributed to drastic reductions in construction starts
of new residential units. In addition, they have made the sale and
purchase of existing residential units a virtual impossibility in many
parts of the state. The ordinary operations of private enterprise have
not in the past corrected these conditions.

* NB Effective July 23, 2025

It is further found and declared that the drastic reduction in
residential construction starts associated with such shortages have
caused a condition of substantial unemployment and underemployment in
the construction industry which results in hardships to many individuals
and families, wastes vital human resources, increases the public
assistance burdens of the state and municipalities, impairs the security
of family life, impedes the economic and physical development of
municipalities and adversely affects the welfare and prosperity of all
the people of the state. A stable supply of adequate funds for
residential mortgages is required to spur new housing starts in an
orderly and sustained manner and thereby to reduce the hazards of
unemployment and underemployment in the construction industry. The
unaided operations of private enterprise have not met and cannot meet
the need for a stable supply of adequate funds for residential mortgage
financing.

It is further found and declared that these conditions associated with
such recurrent shortages of residential mortgage funds contribute to the
persistence of slums and blight and to the deterioration of the quality
of the environment and living conditions of a large number of persons
residing in the state of New York, have adversely affected the economy
of the state as a whole and are contrary to the declared policy of the
state to promote a vigorous and growing economy, to prevent economic
stagnation, to increase revenues to the state and to its municipalities
and to achieve stable local economies.

* Based upon the experience of the past, most recently during the
periods of illiquidity which occurred in nineteen hundred sixty-six and
again in nineteen hundred sixty-nine, shortages of funds for residential

mortgages in the private banking system can be expected to recur from
time to time in varying degrees of severity with the adverse
consequences described above. To avoid or minimize such consequences, to
bring greater stability to the residential construction industry and
related industries, and thus to assure a steady flow of production of
new housing units, there should be created a corporate governmental
agency to be known as the "state of New York mortgage agency" which,
through issuance of bonds and notes to the private investing public
during periods when there is an inadequate supply of credit available
for new loans for residential housing and housing improvement purposes,
may (i) purchase existing mortgages from banks and direct an amount
equal to the proceeds from the liquidated mortgage investments into new
mortgages on residential family dwelling units, (ii) purchase new
mortgages on residential family dwelling units, (iii) purchase new
housing loans for the rehabilitation or improvement of residential
family dwelling units, and (iv) purchase lease-to-own mortgage loans.

* NB Effective until July 23, 2025

* Based upon the experience of the past, most recently during the
periods of illiquidity which occurred in nineteen hundred sixty-six and
again in nineteen hundred sixty-nine, shortages of funds for residential
mortgages in the private banking system can be expected to recur from
time to time in varying degrees of severity with the adverse
consequences described above. To avoid or minimize such consequences, to
bring greater stability to the residential construction industry and
related industries, and thus to assure a steady flow of production of
new housing units, there should be created a corporate governmental
agency to be known as the "state of New York mortgage agency" which,
through issuance of bonds and notes to the private investing public, may
purchase existing mortgages from banks within the state during periods
when there is an inadequate supply of credit available for new
residential mortgage loans and direct an amount equal to the proceeds
from the liquidated mortgage investments into new mortgages on
residential real property for family units.

* NB Effective July 23, 2025

It is further found and declared that in addition to issuance of bonds
and notes for such purposes, the accessibility of credit available for
new loans for residential housing and housing improvement purposes will
also be increased by making available to the people of the state to the
fullest extent possible the benefit of federal programs providing
credits against income tax for a portion of interest paid on residential
mortgage and housing loans.

The secondary mortgage market provided by the corporate governmental
agency created by this title is hereby found and determined to be an
appropriate and effective means of making residential mortgages a more
attractive investment for the private banking system, of reducing the
volatility of mortgage flows over the business cycle, and of providing
greater stability for the economies of the state and its municipalities.

It is further found and determined that it has long been the public
policy of the state to encourage every student who has the desire and
capacity to pursue a post-secondary education. To this end, the state
has developed one of the foremost systems of public higher education in
the nation, as well as a substantial program of grants and loans to help
finance the education of students attending both public and private
post-secondary educational institutions.

Nevertheless, the rising costs to students of post-secondary education
are placing the goal of such study beyond the financial reach of a
growing proportion of our potential student population, particularly
those young men and women coming from families of low- and

middle-income. To effectively meet this fiscal crisis in post-secondary
education, which is contrary to the general welfare of our citizens, it
is hereby found and determined that the student loan programs in the
state should be restructured to make available to every student
financial assistance in the attainment of his college or career
education and that the state of New York mortgage agency should be
authorized to issue its bonds and notes for the purpose of making
available funds with which to make available such student loans.

It is further found and determined that there is a need to establish a
program to assist homeowners in the state of New York who have been
affected by the national mortgage crisis who are either delinquent on
their mortgage payments or are in danger of going into default because
of economic hardship, as such term is defined under the agency's
guidelines, in consultation with the advisory council established in
subdivision three of section twenty-four hundred five-f of this part,
who may lose their homes to foreclosure, or who may have abandoned their
homes due to economic hardship and who may benefit from assistance. In
addition, the existence of vacant, abandoned, distressed, dilapidated or
reasonably beyond repair properties may contribute to the persistence of
conditions that increase blight and add to the deterioration of the
quality of the environment and living conditions of a large number of
persons residing in the state. To address these conditions, it is hereby
found and determined that the state of New York mortgage agency shall be
authorized to create and manage a fund to acquire residences and to
purchase mortgages and mortgage notes, or to provide monies to eligible
institutions to acquire residences and to purchase mortgages and
mortgage notes and to carry out such other functions in connection with
such acquisitions as are necessary to accomplish the purposes of this
paragraph. In connection therewith, the state of New York mortgage
agency shall be authorized to create a subsidiary corporation to carry
out the program authorized under this paragraph.

It is further found and determined that there is a shortage of
adequate funds to assist in the new construction of modular and
manufactured housing.