State Housing Finance Authority power extenders

This bill would extend certain statutory authorizations of the New York State Housing Finance Agency (HFA), State of New York Mortgage Agency (SONYMA) and SONYMA Mortgage Insurance Fund (MIF) for two years.

Summary of provisions:

HFA: Sections 1 and 2 of the bill would extend HFA's authority to finance certain multifamily housing projects until July 23, 2015.

Sonyma

Section 3 of the bill would extend SONYMA's authority to purchase forward commitment mortgages until July 23, 2015.

Section 4 of the bill would extend SONYMA's authority to issue new money taxable and tax-exempt bonds until July 23, 2015.

MIF: Section 5 would extend until July 23, 2015, the sunset date of (i) sections six and nine through seventeen of legislation enacted in 1989 that broadened the scope of MIF to provide primary mortgage insurance on a statewide basis to individual homeowners and to provide pool insurance to all of SONYMA's loans, and (ii) section 13 of legislation enacted in 2004 concerning development corporation credit support relating to the Jacob Javits Convention Center.

Section 6 would extend until July 23, 2015, the sunset date of the requirement that at least 20% of a rehabilitation loan given by SONYMA be used for rehabilitation or construction of improvements.

Section 7 of the bill provides for an immediate effective date.

Existing law:

HFA's authority to finance certain multi-family housing projects is scheduled to sunset on July 23, 2013.

SONYMA's authority to purchase forward commitment mortgages and to issue new money taxable and tax-exempt bonds is scheduled to sunset on July 23, 2013. SONYMA is authorized through July 23, 2013 to insure rehabilitation loans, which are defined in Public Authorities Law 2426 (12) as loans wherein at least 20% of the mortgage loan amount is attributable to the cost of rehabilitation or construction of improvements.

MIF is authorized pursuant to Chapter 55 of the Laws of 1989, as amended, to provide primary mortgage insurance on a statewide basis to individual homeowners and to provide pool insurance to all of SONYMA's loans and is scheduled to sunset on July 23, 2013.

Prior Legislative history:

HFA: Chapter 100 of the Laws of 2011; Chapter 407 of the Laws of 2010; Chapter 176 of the Laws of 2009; Chapter 151 of the laws of 2008; Chapter 85 of the Laws of 2007; Chapter 398 of the Laws of 2006; Chapter 124 of the Laws of 2005; Chapter 204 of the Laws of 2004; Chapter 99 of the Laws of 2003; Chapter 48 of the Laws of 2002; Chapter 363 of the Laws of 2001; and Chapter 131 of the Laws of 2000.

Sonyma

Chapter 100 of the Laws of 2011; Chapter 218 of the Laws of 2010; Chapter 177 of the Laws of 2009; Chapter 148 of the Laws of 2008; Chapter 227 of the Laws of 2007; Chapter 138 of the Laws of 2006; Chapter 121 of the Laws of 2005; Chapter 347 of the Laws of 2004; Chapter 141 of the Laws of 2003; Chapter 103 of the Laws of 2002; Chapter 111 of the Laws of 2001; and Chapter 132 of the Laws of 2000.

MIF: Chapter 100 of the Laws of 2011: Chapter 192 of the Laws of 2009; Chapter 230 of the Laws of 2007; Chapter 125 of the Laws of 2005; Chapter 145 of the Laws of 2003; Chapter 110 of the Laws of 2001. Also, Chapter 100 of the Laws of 2011; Chapter 162 of the Laws of 2010; Chapter 150 of the Laws of 2008; Chapter 137 of the Laws of 2006; Chapter 309 of the Laws of 2005; and Chapter 172 of the Laws of 2002.

Statement in support:

HFA: This bill would increase the maximum amount of new money bonds which HFA is authorized to issue, and would extend HFA's authority to finance certain multifamily housing projects until July 23, 2015. The Agency currently has a substantial pipeline of financing requests that will result in both creating and preserving affordable housing across New York State. The bill will enable the Agency to continue to meet the housing demands of New Yorkers, as well as creating jobs and providing economic stimulus.

Sonyma

SONYMA's statutory authorizations to issue new money tax-exempt bonds and to purchase forward commitment mortgages are scheduled to sunset on July 23, 2013. SONYMA's statutory authorization to issue new money taxable bonds is also scheduled to sunset on July 23, 2013. This bill would extend the sunset dates for the issuance of new money tax-exempt bonds and new money taxable bonds, and for the purchase of forward commitment mortgages until July 23, 2015.

MIF: Enactment of Chapter 555 of the Laws of 1989 and of Chapter 3 of the Laws of 2004 enabled SONYMA to provide primary mortgage insurance on a statewide basis, provide pool insurance for mortgages on one-to-four family homes and on multi-family projects where the loans are made by lenders who meet certain criteria and to provide credit support to the Jacob Javits Convention Center. However, these provisions will sunset on July 23, 2013. The bill extends these sunset provisions until July 23, 2015.

SONYMA's primary tool for promoting new construction and rehabilitation of affordable housing is its authority to insure Rehabilitation Loans. The statutory authority that reduced the percentage of a rehabilitation loan that must be attributable by SONYMA to the cost of rehabilitation or new improvements from 25% to 20% of the mortgage loan is set to expire on July 23, 2013.

The 25% requirement is inconsistent with the provisions of the Internal Revenue Code concerning the issuance of tax-exempt bonds for multifamily housing. Under the Code a minimum of 15% of such bonds must fund construction or rehabilitation costs. Several of the most important users of SONYMA's mortgage insurance are public benefit corporations, such as the New York State Housing Finance Agency, that issue tax-exempt bonds subject to the standards set by the Code. The reduction of the percentage requirement from 25% to 20% has resulted in SONYMA's insurance product matching more closely the needs of some of its primary users without negatively affecting the programmatic or financial integrity of the MIF.

Budget implications:

None.

Local Impact:

None.

Effective Date:

The bill would take effect immediately.