New York Laws
Part 1
2405-F - New York State Community Restoration Fund.

(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.