N.Y. Priv. Hous. Fin. Law § 654

Current through 2024 NY Law Chapter 443

Section 654 - Powers of the corporation

Except as otherwise limited by this article, the corporation shall have power:

1. To sue and be sued;

2. To have a seal and alter the same at pleasure;

3. To make and alter by-laws for its organization and internal management and, subject to agreements with noteholders or bondholders, to make rules and regulations governing the use of its property and facilities;

4. To make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this article;

5. To acquire, hold and dispose of real and/or personal property for its corporate purposes;

6. To appoint officers, agents and employees, prescribe their duties and qualifications and fix their compensation, subject to the provisions of the civil service law and the rules of the civil service commission of the city;

7. Subject to the provisions of any contract with noteholders and bondholders, to make mortgage loans, to participate with the city or with one or more organizations mentioned in section fifteen of this chapter in making mortgage loans and to undertake commitments to make any such mortgage loans to housing companies, including any subsidiary of the corporation, on the same terms and otherwise in accordance with the provisions of article two of this chapter governing loans by a municipality;

7-a.[Effective until ruling by Internal Revenue Service] Subject to the provisions of any contract with noteholders and bondholders, to make mortgage loans, to participate with the city or with one or more organizations set forth in section one hundred eleven-a of this chapter in making mortgage loans and to undertake commitments to make any such mortgage loans to redevelopment companies organized under article five of this chapter;

7-a.[Effective pending ruling by Internal Revenue Service] Subject to the provisions of any contract with noteholders and bondholders, to make mortgage loans, to participate with the city or with one or more organizations set forth in sections eighty-one and one hundred eleven-a of this chapter in making mortgage loans and to undertake commitments to make any such mortgage loans to limited-dividend housing companies organized under article four of this chapter and to redevelopment companies organized under article five of this chapter. Such mortgage loans may be made to limited-dividend and redevelopment companies for such purposes as may be approved by the corporation including, but not limited to, the refinancing of the existing mortgage indebtedness of such companies, to provide funds for the replacement, improvement and rehabilitation of the properties owned by said companies, to provide funds for all costs incurred by such companies relating to the refinancing of the existing mortgage indebtedness including amounts required to establish escrow accounts, reserves and working capital as determined by the corporation and for such other purposes as are permitted by articles four and five of this chapter; provided, however, such purposes must be approved by the Federal Internal Revenue Service for application of the tax exemption for housing bonds. Such mortgage loans may be made by the corporation without any requirement that all or any portion of the loan be used to create new or rehabilitated housing facilities. In furtherance of its powers pursuant to this subdivision and, subject to the provisions of any contract with noteholders and bondholders, the corporation may acquire and contract to acquire, by assignment or otherwise, any mortgage securing a loan and any related bond or note made by a limited-dividend housing company or a redevelopment company and may modify or satisfy such mortgage and accept or make a new mortgage or mortgages and execute such other instruments as the corporation deems to be necessary or proper.

8. Subject to the provisions of any contract with noteholders and bondholders, to make mortgage loans including participation and investment with the city or with one or more corporations, organizations or individuals of the kind mentioned in section four hundred seven of this chapter in making mortgage loans and to undertake commitments to make mortgage loans to owners of existing multiple dwellings, including any subsidiary of the corporation, on the same terms and otherwise in accordance with the provisions of article eight of this chapter, except that such loans shall in all cases be secured by a first lien;

8-a. Subject to the provisions of any contract with noteholders or bondholders, to participate with the city or one or more private investors as defined in section eight hundred one of this chapter or with the city and one or more such private investors in making loans in accordance with the provisions of article fifteen of this chapter.

9. Subject to the provisions of any contract with noteholders and bondholders, to sell, at public or private sale, any mortgage or other obligation securing a mortgage loan made by the corporation;

10. Subject to the provisions of any contract with noteholders and bondholders, in connection with the making of mortgage loans and commitments therefor, to make and collect such fees and charges, including but not limited to reimbursement of all costs of financing by the corporation, service charges and insurance premiums, as the corporation shall determine to be reasonable;

11. Subject to the provisions of any contract with noteholders and bondholders, to consent to the modification, with respect to rate of interest, time of payment of any installment of principal or interest, security, or any other term, of any mortgage, mortgage loan, mortgage loan commitment, contract or agreement of any kind to which the corporation is a party;

12. To foreclose any mortgage in default or commence any action to protect or enforce any right conferred upon it by any law, mortgage, contract or other agreement, and to bid for and purchase such property at any foreclosure or at any other sale, or acquire or take possession of any such property; and in such event the corporation may complete, administer, pay the principal of and interest on any obligations incurred in connection with such property, dispose of, and otherwise deal with, such property, in such manner as may be necessary or desirable to protect the interests of the corporation therein;

12-a. To create subsidiaries, as provided in section six hundred fifty-four-a of this chapter.

13. To borrow money and to issue negotiable notes or bonds or other obligations and to fund or refund the same, and to provide for the rights of the holders of its obligations;

14. To invest any funds held in reserves or sinking funds, or any funds not required for immediate use or disbursement, at the discretion of the corporation, in obligations of the city, state or federal government, obligations the principal and interest of which are guaranteed by the city, state or federal government, obligations of agencies of the federal government which may from time to time be legally purchased by savings banks of the state as investments of funds belonging to them or in their control and be approved by the comptroller, obligations in which the comptroller of the state of New York is authorized to invest pursuant to section ninety-eight of the state finance law, obligations of the New York city municipal water finance authority, participation certificates of the federal home loan mortgage corporation or mortgage-backed securities of the federal national mortgage association.

15. Subject to the provisions of any contract with noteholders and bondholders and subject to the provisions of section six hundred fifty-five of this article, to purchase notes or bonds of the corporation;

16. To procure insurance against any loss in connection with its property and other assets including mortgages and mortgage loans in such amounts and from such insurers as it deems desirable;

17. To engage the services of consultants on a contract basis for rendering professional and technical assistance and advice; and where the corporation shall join with one or more organizations mentioned in section fifteen, one hundred eleven-a or four hundred seven of this chapter in making mortgage loans, to make provision, either in the mortgage or mortgages or by separate agreement, for the performance of such services as are generally performed by a banking organization or insurance company which itself owns and holds a mortgage or by a trustee under a trust mortgage, and to consent to the appointment of a banking organization to act in such capacity;

18. To contract for and to accept any gifts or grants or loans of funds or property or fees for administering any federal rental subsidy contract or financial or other aid in any form, including but not limited to mortgage insurance, from the federal government or any agency or instrumentality thereof, or from the state or any agency or instrumentality thereof, or from any other source and to comply, subject to the provisions of this article, with the terms and conditions thereof;

19. As security for the payment of the principal of and interest on any bonds so issued and any agreements made in connection therewith, to pledge all or any part of its revenues;

20. Notwithstanding the provisions of this chapter or of any other law, general, special or local, whenever the corporation shall find that the maximum rentals charged tenants of the dwellings in any project financed by the corporation in whole or in part shall not be sufficient, together with all other income of the mortgagor, to meet within reasonable limits all necessary payments to be made by the mortgagor of all expenses including fixed charges, sinking funds, reserves and dividends, to request the mortgagor to make application to vary the rental rate for such dwellings so as to secure sufficient income, and upon failure of the mortgagor to take such action within thirty days after receipt of written request from the corporation to do so, to request the supervising agency to take action upon such agency's own motion so to vary such rental rate, and upon failure of the supervising agency either upon application by the mortgagor or upon its own motion so to vary such rental rate within sixty days after receipt of written request from the corporation to do so, to vary such rental rate by action of the corporation;

21. Subject to the provisions of any contract with noteholders and bondholders, to acquire and to contract to acquire, by assignment or otherwise, or to take as collateral security, any mortgage securing a loan, including any construction loan, and any note or bond evidencing indebtedness thereon, made by the city of New York in accordance with the provisions of article two of this chapter and any contract or arrangement, including any subsidy contract or arrangement, related to such mortgage, and the receipts to be derived from any of the foregoing, and to assume and fulfill and contract to assume and fulfill the obligations of the mortgagee or lender thereunder, and to reassign and to contract to reassign to the city of New York any such mortgage, note, bond, contract or arrangement and the receipts to be derived therefrom.

22. Subject to the provisions of any contract with noteholders and bondholders, to assign or pledge any mortgage, bond, note, contract, security, or arrangement and the receipts to be derived from any of the foregoing, acquired pursuant to this section;

22-a. Subject to the provisions of any contract with noteholders and bondholders, to acquire and to contract to acquire, by assignment or otherwise, any mortgage securing a loan, including any construction loan, and any note or bond evidencing indebtedness thereon, made by the city of New York in accordance with the provisions of article two of this chapter and any contract or arrangement, including any subsidy contract or arrangement, related to such mortgage, and to modify or to satisfy such mortgage and accept or make a new mortgage or mortgages and other instruments, including mortgages to secure residual indebtedness and instruments to evidence residual receipts obligations as defined in section twelve of this law and to enter into amended subsidy contracts, and (i) to hold or to sell, assign or otherwise dispose of such mortgage or mortgages, including those made in substitution thereof and any related instruments, contracts and arrangements, or to issue obligations secured by such mortgage or mortgages, and pay to the city of New York the proceeds of such sale, assignment or other disposition of such mortgages and the proceeds from the issuance of such obligations, less legal and other fees, costs and expenses and other amounts paid or incurred by the corporation, including discounts, costs incurred by the corporation related to the sale of such mortgages or to a sale, if any, of its obligations, fees payable to other governmental units, the cost incurred by the corporation under an agreement with the federal government pursuant to subdivision twenty-two-b of this section, amounts required to establish escrow accounts or reserves for the issuance of mortgage insurance, the cost of satisfying such minimum property standards or of installing such life safety devices as may be required by the federal government which standards or devices are in addition to any requirement imposed by the city of New York as mortgagee, amounts loaned to the mortgagor to establish such escrow accounts or reserves or to satisfy such minimum property standards or to install such life safety devices, closing and other costs related to obtaining mortgage insurance from the federal government such other costs as the federal government may from time to time impose, any amounts not previously advanced under mortgages modified or satisfied under this subdivision as determined by the supervising agency, and an amount not to exceed twenty million dollars at any one time, which shall be held in a revolving account for a period not to exceed eighteen months from the time of the first deposit therein, to pay any or all of the costs, fees and expenses and other amounts attributable to issuing obligations secured by such mortgage or mortgages, or to making and insuring mortgages pursuant to this subdivision, and any balance remaining in such revolving account shall be paid to the city of New York no later than eighteen months after the time of the first deposit therein, and (ii) to assign or reassign any such mortgage or mortgages, instruments and related contract or arrangement to the city of New York. If the corporation sells any such mortgages for an amount in excess of the principal amount thereof at the time of such sale, or if the corporation issues obligations secured by any such mortgages and the yield on such mortgages is greater than the yield on such obligations (the yield on such mortgages and obligations having been calculated in accordance with section one hundred three of the internal revenue code of the United States and regulations thereunder), the corporation shall pay to the city of New York such premium and any such differential, but only to the extent such differential is not paid to or for the benefit of the holders of such obligations; and such premium and differential, to the extent so paid to such city, shall be used and credited by the city of New York in accordance with subdivision four-b of section twenty-three-a of this chapter as if such city had sold such mortgages or issued such obligations pursuant to section twenty-three-a of this chapter. The corporation shall not modify or satisfy a mortgage pursuant to this subdivision unless such modification or satisfaction is first approved by the supervising agency.

22-b. To contract with the federal government for the sharing of any claim paid by the federal government on account of any insurance of a mortgage, provided that the corporation's share of any such claim shall not exceed fifty percent of the insurance benefits paid by the federal government, and further provided that the corporation's share of such claims under any such contract shall not exceed five percent of the outstanding principal amount of all mortgage loans of the corporation insured by the federal government and included within such contract.

23. To make loans secured by mortgages insured or coinsured by the federal government to the owners of multiple dwellings in such amounts as may be required for the rehabilitation of such multiple dwellings or, if such owner acquires the multiple dwelling for the purpose of such rehabilitation or owns the multiple dwelling subject to an outstanding indebtedness, in such amounts as may be required for the cost of such acquisition or for the refinancing of such outstanding indebtedness, but in no event in such amounts as would exceed the mortgage limits imposed by the federal government, and to regulate or restrict such owner as to rents or sales, charges, capital structure, rate of return and method of operation and to make loans secured by mortgages insured or coinsured by the federal government to the owners of projects in such amounts as may be required for the acquisition, construction or improvement of such projects, but in no event in such amounts as would exceed the mortgage limits imposed by the federal government, or ninety percent of the actual cost of such acquisition, construction or improvement, whichever is less, and to regulate or restrict such owner as to rents or sales, charges, capital structure, rate of return and method of operation. The owner may, with the approval of the corporation, fix maximum rentals to be charged tenants of the dwellings in any multiple dwelling or project aided by a loan pursuant to this subdivision. The corporation, upon its own motion, or upon application by the owner or by the federal government, may vary such rental rate from time to time so as to secure, together with all other income of the multiple dwelling, sufficient income for it to meet within reasonable limits all necessary payments to be made by the owner of all expenses; provided that no variation in a rental rate shall be effective unless approved by the federal government. The corporation or the department of housing preservation and development shall notify occupants of the multiple dwelling, if there be any, of the contemplated rehabilitation and shall advise them of the expected rental increase to result therefrom, and a representative of the corporation or the department of housing preservation and development shall meet or offer to meet at least once with the occupants. The corporation shall promulgate such rules and regulations with respect to multiple dwellings and projects financed pursuant to this subdivision and the owners of such multiple dwellings and projects as may be necessary to carry out the provisions of this subdivision, provided that such rules and regulations shall contain provisions as to income limitations relating to admission into occupancy of the dwelling units of such projects to the same effect as are contained in section thirty-one of this chapter and for the dwelling units of such other multiple dwellings to the same effect as are contained in subdivision three of section four hundred one of this chapter. As used in this subdivision, the term "multiple dwelling" shall include an existing building or structure which is to be converted into a class A multiple dwelling.

23-a. Subject to the provisions of any contract with noteholders and bondholders, (i) to make and contract for the making of mortgage loans for the construction or rehabilitation of projects which the New York city housing authority has agreed to purchase on a turnkey basis in accordance with a federally assisted program for the production of public housing as authorized by the United States housing act of nineteen hundred thirty-seven as amended to the date of enactment of this subdivision of this section, upon the completion of such construction or rehabilitation, and (ii) to make and to contract for the making of loans to, or to purchase loans from, banking or other lending institutions for the purpose of financing such construction or rehabilitation.

23-b. In order to increase the availability of safe and sanitary dwelling accommodations within the financial reach of families and persons of low income, to acquire and to contract to acquire, by assignment or otherwise, or to take as collateral security, any federally guaranteed security evidencing indebtedness on a mortgage securing a loan, including any construction loan, and the receipts to be derived therefrom and to assign or reassign and to contract to assign or reassign any such security and the receipts to be derived therefrom, subject in each case, to the provisions of any contract with noteholders and bondholders;

23-c.[Repealed Effective 7/23/2025]

(1) Subject to the provisions of any contract with noteholders and bondholders (a) to make and contract for the making of loans for the acquisition, construction or rehabilitation of housing accommodations containing five or more dwelling units (i) for the purpose of providing housing accommodations for occupancy by persons and families for whom the ordinary operations of private enterprise cannot provide an adequate supply of safe, sanitary and affordable housing accommodations or (ii) for units located in an area designated as blighted pursuant to article fifteen or sixteen of the general municipal law, or as certified by the New York city department of housing preservation and development as being located in an area which is blighted, and (b) to make and to contract for the making of loans to or to purchase loans from lending institutions for the purpose of financing mortgage loans for such acquisition, construction or rehabilitation, and (c) to establish such regulatory requirements with regard to such housing accommodations as may be deemed appropriate by the corporation to achieve the objectives of this article, and articles fifteen and sixteen of the general municipal law notwithstanding any other provisions of this chapter to the contrary. Any notes and bonds issued pursuant to this subdivision shall not be secured by any capital reserve fund established pursuant to section six hundred fifty-six of this article.

(2) With regard to any loan made pursuant to this subdivision and notwithstanding the provisions of, or any regulation promulgated pursuant to, the emergency housing rent control law, the local emergency housing rent control act, or local law enacted pursuant thereto, the rent stablization law of nineteen hundred sixty-nine, or the emergency tenant protection act of nineteen seventy-four, the owner of a project otherwise subject to any such law or act, with the approval of the agency, shall establish the initial rent for each dwelling unit within the project. The corporation shall notify occupants of the project, if any, of any such proposed rental establishment and offer to meet at least once with the occupants prior to its approval.

(3) The powers granted by this subdivision may be exercised only if (a) obligations of the corporation have been issued to fund the loan made or purchased by the corporation and such obligations have received an investment grade rating from a recognized rating agency; (b) the loan made or purchased by the corporation is fully secured as to principal and interest by insurance or a commitment to insure by the state of New York mortgage agency or New York city residential mortgage insurance corporation or by the general credit of a bank, national bank, trust company, savings bank, savings and loan association, insurance company, governmental agency of the United States, or any combination thereof; or (c) obligations of the corporation are purchased by a bank, national bank, trust company, savings bank, savings and loan association, insurance company, governmental agency of the United States, which for purposes of this subdivision, include the federal home loan mortgage corporation, the federal national mortgage association, the governmental national mortgage association, and any successor of the foregoing, or any wholly-owned subsidiary or combination thereof.

23-d. To and shall develop, promote and ensure that, where possible, minority groups which traditionally have been disadvantaged, and women are afforded equal opportunity for contracts in connection with development and construction contracts for developments, facilities and projects financed by the issuance of bonds, notes and other obligations of the corporation.

23-e. Subject to the provisions of any contract with noteholders and bondholders, to refinance or acquire mortgage loans made for multiple dwellings by private lenders pursuant to article eight-A or fifteen of this chapter; provided that the corporation shall not be permitted pursuant to this subdivision to acquire a mortgage loan, unless such acquisition is in connection with a refinancing of the property for which such mortgage loan was made.

23-f. To service mortgage loans made by private or governmental lenders for multiple dwellings, provided that each such mortgage loan shall have been made either (i) pursuant to this chapter, or (ii) in conjunction with another mortgage loan made by the city of New York.

23-g. Subject to the provisions of any contract with noteholders and bondholders, to acquire mortgage loans made by the city of New York pursuant to article eight-A of this chapter or section ninety-nine-h or article sixteen of the general municipal law or to acquire a participation interest in such mortgage loans.

23-h. Subject to the provisions of any contract with noteholders and bondholders and relating to the purpose of providing housing accommodations for occupancy by persons and families for whom the ordinary operations of private enterprise cannot provide an adequate supply of safe, sanitary and affordable housing accommodations or for units located in an area designated as blighted pursuant to article fifteen or sixteen of the general municipal law, or as certified by the New York city department of housing preservation and development as being located in an area that is blighted, the corporation is hereby authorized to carry out, by loans or guaranties, the following purposes:

(i) to preserve, repair, renovate, upgrade, improve, modernize, rehabilitate or otherwise prolong the useful life of dwelling accommodations;

(ii) to construct dwelling accommodations and undertake site preparation related thereto;

(iii) to restore abandoned, vacant or occupied city or privately-owned dwelling accommodations to habitable condition;

(iv) to assist in the acquisition of buildings that contain or are expected to contain dwelling accommodations; and

(v) to facilitate the disposition of city-owned buildings that contain or are expected to contain dwelling accommodations.

24. To contract with any of its subsidiary corporations to render such services as such subsidiary corporation may request, including, but not limited to, the use of the premises, personnel and personal property of the corporation, and to provide for reimbursement to the corporation from such subsidiary corporation for any expenses necessarily incurred by the corporation in carrying out the terms of any such contract.

25. To do any and all things necessary or convenient to carry out its purposes and exercise the powers expressly given and granted in this article.

N.Y. Priv. Hous. Fin. Law § 654

Amended by New York Laws 2023, ch. 205,Sec. 1, eff. 7/19/2023.

Amended by New York Laws 2021, ch. 235,Sec. 3, eff. 7/1/2021.