§ 1-08 Mortgage Conditions.
RCNY § 1-08
(a)No loan may exceed the maximum mortgage amount.
(b)Each loan made under this program shall be secured by a bond or note and mortgage upon the multiple dwelling to be improved and the land upon which it is situated to be repaid over or within a period of thirty years in such manner as may be provided therein.
(c)The Agency may take a junior lien on the property as security for the loan or may, in accordance with the provisions of the Private Housing Finance Law, participate in a rehabilitation loan with a private lender, provided that the total indebtedness will not exceed the maximum mortgage amount after completion of rehabilitation. In determining whether to take a junior lien the Agency shall give favorable consideration to the following, if present: that the interest rate on the prior lien is more favorable than the Agency can offer the mortgagor; that the holder of the prior lien is an institutional lender of recognized standing; and that the principal amounts due under the prior lien or liens are being amortized on a basis which would not jeopardize the City's lien. A subordination agreement may be required from the holder of any prior lien where the Agency deems it desirable.
(d)The mortgagor shall be required at the closing to execute a construction contract for the performance of the work with a general contractor or tradesman. Both the contract and the general contractor or tradesman must be approved by the Agency and the Agency reserves unto itself the right to approve or reject a contractor. The mortgagor shall be required to submit a resume of the experiences of the proposed contractor and all proposed subcontractors, financial statements of the contractor and for all firms in which the contractor has a controlling interest for the last three years, references from at least three major clients of each contractor, and a statement of the ethnic breakdown of the employees of each such contractor and subcontractor in advance of such closing.
(e)At the closing of the loan, the owner shall advise the Agency by a sworn statement of changes, if any, that have occurred since the date of application for the loan with respect to condition of the building, mortgage balances, acquisition cost, taxes, liens, discounts and assignments, and any change in relationship of parties in interest, and if there have been no changes, shall so state. If any portion of the loan is used to satisfy a mortgage, the mortgagor will be required at the closing to provide a certificate from the holder of the mortgage as to the amount paid by such mortgagee for the mortgage, where applicable, and the balance due thereon.
(f)Interest and amortization payments shall be due and payable commencing on the first day of the third month after a certificate of occupancy, temporary or permanent, has been obtained, where applicable. This period may be extended upon due notice by the Agency to the City Comptroller where occupancy is dependent on conditions beyond the owner's control such as the availability of Federal rent supplements.
(g)A mortgagor may not, at any time, further encumber, mortgage or permit any encumbrance or lien of any kind upon the mortgaged premises without the prior written consent of the Agency, nor may the premises or any part thereof be conveyed, assigned or transferred without the prior written consent of the Agency. Failure to comply with this subdivision (g) at the option of the Agency, shall result in the Agency's declaring the entire unpaid principal balance and interest immediately due and payable.
(h)The mortgage may provide that with the consent of the Agency a mortgagor may prepay the principal amount of the loan together with interest then due. However, the apartments in the premises shall remain subject to the conditions set forth in 28 RCNY § 1-03 (Eligibility and General Conditions).
(i)The Agency shall establish first rentals or adjust maximum rents, whichever is applicable, for all buildings rehabilitated with a municipal loan and certify same to the Division of Housing and Community Renewal. In arriving at such rent levels, the Agency shall consider the total of the projected operating costs, including water and sewer taxes, fuel, insurance, utilities, painting and repairs, and vacancy allowance, a reasonable return on the owner's equity and interest and amortization payments on the mortgage.
