Provides authority for the NYC housing development corporation to acquire certain mortgage loans made by the city

BILL NUMBER:S5649

Title of bill

An act to amend the private housing finance law, in relation to providing authority for the New York city housing development corporation to acquire mortgage loans made by the city of New York pursuant to such law, article 16 of the general municipal law or section 99-h of the general municipal law or to acquire a participation interest in such mortgage loans and to make loans for the creation and preservation of affordable housing

Summary of provisions

This proposed legislation would amend the Private Housing Finance Law to allow the New York City Housing Development Corporation (HDC) to acquire mortgage loans made by the City of New York pursuant to article 16 of the General Municipal Law or section 99-h of the General Municipal Law or to acquire a participation interest in such mortgage loans and would create new subdivision that provides HDC with authority to make loans for the creation and preservation of affordable housing.

Reasons for support

The proposed legislation would provide the New York City Housing Development Corporation. (HDC) with the authority to purchase loans originated by the City of New York pursuant to article 16 of the General Municipal Law or section 99-h of the General Municipal Law or to acquire a participation interest in such loans. The sale of these loans will raise funds for the benefit of New York City. HDC has previously issued bonds for the benefit of New York City. HDC is the most appropriate entity to issue bonds to fund such a purchase, as the fees relating to such issues will be used to benefit the financing of affordable housing in New York City. The powers articulated in the new subdivision 23-h duplicate powers originally granted to HDC under the provisions of the Housing New York Program Act. However, the lending authority and affordable housing provisions detailing the construction and preservation of affordable housing in such act relate to provisions of the Housing New York Program Act that have expired. Although the Housing New York Program Act itself has not expired, this bill will clarify HDC's authority to undertake such activities. By adding the new subdivision, HDC will be authorized to make subordinate loans from its corporate reserves to aid affordable housing development and preservation pursuant to its current programs as well as provide other assistance for this important task.

Since January 1, 2004, HDC has issued in excess of $7.5 billion in bonds to finance the construction or preservation of some 28.000 apartments throughout the City and the preservation of approximately 18,000 additional Mitchell-Lama apartments. Between 2004 and 2009, in the aggregate. HDC has been the largest issuer of affordable multi-family housing bonds in the United States. Under the original "New Housing Marketplace" initiative. HDC was responsible for creating or preserving 17.000 units of housing. In 2005, Mayor Bloomberg announced an increase of the pace and scale of the

initiative to include the construction or preservation of 165,000 units of housing over ten years. and HDCs charge was increased commensurately. As of December 1, 2009, HDC has financed the construction or preservation of 43,500 affordable apartments, far surpassing its original five-year goal and its expanded goal of 42,000 affordable apartments.

This legislation will enable HDC to continue to run programs that provide access to capital and the provision of funds for the development, preservation and maintenance of affordable housing in New York City.

Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature.