Section 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.