Section 696-A*2. Loans

Notwithstanding  the  provisions  of any general,
  special or local law, an agency is hereby authorized to make or contract
  to make grants or loans: (i) to the owner of any property that  is  part
  of  an  urban  development  action  area  project  for  the  purpose  of
  rehabilitation of an existing private or multiple dwelling, (ii) for the
  purpose of providing site improvements, including, but not  limited  to,
  water  and  sewer  facilities,  sidewalks,  landscaping,  the  curing of
  problems caused by abnormal site conditions, excavation and construction
  of footings and foundations and other improvements associated  with  the
  provision  of  infrastructure, or (iii) for the purpose of providing for
  other costs of construction for the development of private and  multiple
  dwelling  housing accommodations. In the case of a grant made under this
  section for the rehabilitation of an existing multiple dwelling intended
  to be converted to a condominium or cooperative form of ownership or for
  the development  of  one  to  four  unit  housing  accommodations  or  a
  condominium or cooperative housing corporation, such grant shall require
  a  regulatory  agreement with the agency limiting profits. Any loan made
  in accordance with this section shall be secured by a note and  mortgage

  upon  the property improved or, in the case of a condominium, a note and
  mortgage upon each of the housing accommodations aided by such loan,  or
  in  the  case  of a cooperative housing corporation, a note and mortgage
  upon    the    economic   interest   in   such   corporation   of   each
  tenant-shareholder aided by such loan, or upon the property improved, or
  upon both such economic interest or property. Such loan shall be  repaid
  over  such  period  as the agency shall determine. In the case of a loan
  for rehabilitation of an  existing  multiple  dwelling  intended  to  be
  converted  to  a  condominium or cooperative form of ownership or a loan
  for the provision of infrastructure or for the provision of other  costs
  of  construction  for  the  development  of  one  to  four  unit housing
  accommodations or a condominium or cooperative housing corporation, such
  note and mortgage may provide  that  the  loan  shall  automatically  be
  reduced  to  zero  over  a  period  of  owner-occupancy  of  the housing
  accommodations assisted by such loan. In the case of  a  grant  or  loan
  made  under this section for the purpose of providing rental housing for
  persons of low income as defined in section two of the  private  housing
  finance  law,  such  loan  or grant shall require a regulatory agreement
  with the agency limiting profits and rentals charged. In the case  of  a
  loan made under this section for the purpose of providing rental housing
  for  persons  of  low  income  as  defined in section two of the private
  housing finance law, such note and mortgage may provide  that  the  loan
  shall  automatically  be  reduced  to zero over a period of up to thirty
  years of compliance by the owner with a regulatory  agreement  with  the
  agency  limiting  profits and rentals charged. The repayment of any loan
  made in accordance with this section shall be made in such manner as may
  be provided in such note and mortgage in connection with such loan,  and
  may  authorize  the owner, with the consent of the agency, to prepay the
  principal of the loan subject to such terms and  conditions  as  therein
  provided.  Such  note  and  mortgage  may  contain  such other terms and
  conditions not inconsistent with the provisions of this article  as  the
  agency  may deem necessary or desirable to carrying out the purposes and
  provisions of this article including, but  not  limited  to,  provisions
  concerning the repayment of the loan, the interest, if any, thereon, and
  other charges in connection therewith. For purposes of this section, the
  term  "mortgage"  shall  include  any  pledge or assignment of shares or
  assignment of a proprietary lease in a cooperative  housing  corporation
  where  such  pledge  or  assignment  is  intended  as  security  for the
  performance of an obligation and which imposes  a  lien  on  or  affects
  title to such shares or such proprietary lease.
    * NB Effective June 30, 2010