Relates to small loans to owners of multiple dwellings to remove substandard or insanitary conditions

2 Co-sponsors

• Vito Lopez
• Vanessa Gibson

BILL NUMBER:A8842

Title of bill

An act to amend the private housing finance law, in relation to small loans to owners of multiple dwellings to remove substandard or insani- tary conditions and to loans to owner-occupants of one-to-four unit private and multiple dwellings

Purpose or general idea of bill

Each note/loan shall be repaid within a period of thirty years or such shorter periods as the supervising agency shall determine, but in no event longer than the useful life of the rehabilitation or improvement financed with such loan. The probable life of the existing multiple dwelling which is hereby determined to be thirty years, or such shorter period as the supervising agency shall determine.

Summary of specific provisions

Articles 8-A and 8-B of the Private Housing Finance Law ("PHFL") provide loans for owners and owner-occupants of one-to-four unit multiple dwell- ings to eliminate substandard or insanitary conditions in their build- ings or units. Currently such loans must be repaid within a period of thirty years or a shorter term determined by the agency, provided that the term shall not exceed the "useful life of the rehabilitation or the improvement financed with such loan". Section one of the bill would amend subdivision 2 of Section 452 of the PHFL to provide that the long- est possible term for such loans to multiple dwelling owners shall be "the probable life of the existing multiple dwelling", which it explic- itly defines as thirty years. Similarly, section two would amend subdi- vision 2 of Section 472 of the PHFL to provide that the longest possible term for such loans to owner-occupants shall be "the probable life of the existing multiple dwelling", which it explicitly defines as thirty years.

Justification

Articles 8-A and 8-B of the PHFL currently provide that the term of any loan made pursuant to such articles may not exceed the "useful life of the rehabilitation or improvement." This language differs from the equivalent provisions in Articles 8 and 15 of the PHFL, which provide that the term of any loan made under such articles may not exceed the probable life of the building, which is determined to be thirty years. Therefore, while Articles 8 and 15 clearly allow thirty year loans, Articles 8-A and 8-B contain some ambiguity regarding the permissible loan term.

The financial viability of loans pursuant to Article 8-A and 8-B often depends on the ability to spread repayment over a thirty year term. Shorter loan terms may increase debt service beyond the amount the prop- erty's rent roll can support. The proposed legislation resolves any ambiguity by replacing the current language with the more definitive language of Articles 8 and 15.

Prior legislative history

New Bill.

Fiscal implications

None to the State.

Effective date

This act shall take effect immediately.