575. Advances; conditions; repayment. 1. The commissioner of housing and community renewal is hereby authorized to use the moneys held in the housing development fund to make non-interest bearing advances to housing development fund companies, and housing corporations in accordance with the provisions of this article. Such moneys shall be paid out of such fund, after audit by and upon the warrant of the comptroller, on vouchers approved by the commissioner.
1-a. The supervising agency is hereby authorized to use the moneys held in the municipal housing development fund or other funds appropriated by the municipality to make non-interest bearing advances to housing development fund companies in accordance with the provisions of this article and the applicable law of the municipality.
2. No such advances shall be made with respect to a housing project unless the commissioner or the supervising agency, as the case may be, (a) finds (1) that the housing development fund company, or housing corporation proposes to finance the project in whole or in part by a federally-aided, state-aided or municipally-aided mortgage or (2) that the project, if otherwise financed, will provide housing for persons or families of low income, as defined in this chapter, and is otherwise consistent with the purposes of this article; (b) finds that the project site is suitable, there is a need for this housing type proposed in the area to be served and the project is feasible; and (c) reasonably anticipates that financing will be obtained and makes a finding to that effect.
3. No such advances may be made to a housing corporation unless it enters into an agreement with the commissioner to be regulated with respect to rents, profits, dividends and disposition of its property or franchises. No such advances may be made to a housing development fund company unless it enters into an agreement in accordance with the provisions of section five hundred seventy-six of this article.
4. The proceeds of such advance may be used only to defray the development costs of such project.
5. Each such advance shall either (i) be consolidated with the lien of a municipally-aided mortgage, or (ii) be repaid in full by the housing development fund company, or housing corporation to the division of housing and community renewal or to the supervising agency as directed in paragraph (b) of subdivision two of section five hundred seventy-four-a of this article, as the case may be. Such repayment shall be made concurrent with receipt by the housing development fund company or its successor in interest, or housing corporation of the proceeds of its mortgage or construction loan, unless the commissioner or the supervising agency, as the case may be, shall extend the period for the repayment of such advances. In no event shall the time of repayment be extended later than the date of final advance of funds pursuant to such mortgage financing.
6. If the commissioner or the supervising agency, as the case may be, in his or its discretion shall, at any time, determine that permanent financing for the housing project may not be obtained, then and in that event all advances made to the housing development fund company, or housing corporation pursuant to this article shall become due and payable upon the demand of the commissioner or the supervising agency, as the case may be.
Last modified: February 3, 2019