New York Laws
Article 8-B - Loans to Owner-Occupants of One to Four Unit Private and Multiple Dwellings
472 - Loans to Owner-Occupants.

§ 472. Loans to owner-occupants. 1. Notwithstanding the provisions of
any general, special or local law, a municipality, acting through an
agency, is authorized to make, or contract to make, loans to low and
moderate income owner-occupants of one to four unit existing private or
multiple dwellings within its territorial limits, subject to the
limitation of subdivisions two through seven of this section, in such
amounts as shall be required for the rehabilitation of such dwellings,
provided, however, that such loans shall not exceed sixty thousand
dollars per dwelling unit. Such loans may also include the refinancing
of the outstanding indebtedness of such dwellings, and the municipality
may make temporary loans or advances to such owner-occupants in
anticipation of permanent loans for such purposes.

2. Each loan shall be evidenced by a note executed by the
owner-occupant of the existing dwelling. Repayment of each such note
shall be within a period of the probable life of the existing dwelling
which is hereby determined to be thirty years, or such shorter period as
the agency shall determine. The repayment shall be made in such manner
as may be provided in such note and contract, if any, in connection with
such loan, and may authorize such owner-occupant, with the consent of
the agency, to prepay the principal of the loan subject to such terms
and conditions as therein provided. In order to make any such loan
affordable to the owner-occupant, the agency may provide in such note
and contract that all of the outstanding principal of said loan may be
self-liquidated over a fifteen year period of owner-occupancy. Such note
and contract may contain such other terms and provisions not
inconsistent with the provisions of this article as the agency may deem
necessary or desirable to secure repayment of the loan, the interest
thereon, if any, and other charges in connection therewith, and to carry
out the purposes and provisions of this article.

3. The agency in its discretion may require that the owner-occupant
execute, acknowledge and deliver a uniform commercial code financing
statement for the real property improvement to be in such form as the
agency shall specify and in accordance with the requirements of section
9--502 of the uniform commercial code of the state of New York. Said
financing statement shall be filed or recorded without charge in
accordance with the provisions of paragraph one of subsection (a) of
section 9--501 of the uniform commercial code, and from the date of such
filing the municipality shall have a lien against said real property
improvement for the amount advanced or so much thereof as remains unpaid
together with the interest thereon. Upon payment of all sums advanced by
the municipality and interest thereon, and upon demand of the then
record owner of the real property, the agency shall deliver a copy of
the financing statement with an endorsement thereon that the lien is
satisfied. Upon filing of such copy in the office where the financing
statement was filed and upon payment of the proper fee therefor, the
lien of such financing statement shall be discharged.

4. The agency may require the owner-occupant to execute a mortgage as
security for a loan in lieu of or in addition to a financing statement
as provided in subdivision three of this section. Such mortgage shall
contain such terms and provisions not inconsistent with the provisions
of this article as the agency shall deem necessary or desirable to
secure repayment of the loan.

5. Loans may be made with respect to a one to four unit private or
multiple dwelling encumbered by mortgages, provided no mortgage is in
default, except if such default shall be remedied by the proposed
rehabilitation or improvement.

6. The agency may charge the owner-occupant of such existing private
or multiple dwelling reasonable fees for administration, financing,
regulation, supervision and audit.

7. In making a loan under this article, an agency shall have the power
to participate in a loan made by any private investor, provided that the
portion of the loan funded by the agency shall not exceed an amount
equal to seventy-five percent of the total loan. The agency may enter
into an agreement with a private investor to deposit funds with such
private investor to cover the agency's participation in loans to
owner-occupants of one to four unit existing private and multiple
dwellings with such funds advanced by such private investor to
owner-occupants of existing dwellings. The portion of the loan funded by
the agency may be equal to or subordinate in lien to the portion of the
loan funded by the private investor and the note and contract may
contain such terms with respect to interest rate, if any, and time of
payment of principal and interest as determined by the agency. The
agency may make provision, either in the mortgage or mortgages or by
separate agreement, for the performance by the private investor of such
services as are generally performed by a banking institution which
itself holds a mortgage, including, without limitation, construction
loan advances, construction supervision, initiation of foreclosure
proceedings, procurement of insurance, and all other matters in
connection with the financing, supervision, regulation and audit of any
such loan. In order to make the loan affordable to the owner-occupant,
the agency may provide an interest reduction subsidy pursuant to section
four hundred seventy-five of this article, or may provide that all or
part of the agency's portion of the outstanding principal of any such
participation loan may be self-liquidated over a fifteen year period of
owner-occupancy.