Section 1112. Affordable home ownership development contracts

1. Within the
  limit  of funds available in the affordable housing development account,
  the corporation is  hereby  authorized  to  enter  into  contracts  with
  eligible applicants to provide grants which such applicants shall use to
  finance  affordable  home  ownership development programs subject to the
  terms  and  conditions  of  this  article.  Any  grants  received  by  a
  municipality  hereunder  shall  not  be  deemed  to  be municipal funds.
  Grantees shall utilize funds provided pursuant to this article solely as
  payments, grants and  loans  to  owners  to  reduce  the  costs  of  new
  construction,   rehabilitation  or  home  improvement  or  the  cost  of
  acquisition, but only where such acquisition is part  of  an  affordable
  home   ownership   development   program  or  project  to  construct  or
  rehabilitate homes, or as otherwise authorized by  law.  Such  financial
  assistance may be in the form of loans, participation in loans including
  but  not  limited  to  participation  in loans originated or financed by
  lending institutions as defined in section forty-two  of  this  chapter,
  private  or  public  employee  pension  funds  or  the state of New York
  mortgage agency, or grants, on such terms and conditions as the  grantee
  with  the  approval of the corporation shall determine, provided that no
  such payments, grants and loans shall exceed the  lesser  of  (i)  sixty
  percent  of  the  project  cost  or (ii) the following per dwelling unit
  limitations (A) thirty-five thousand  dollars  for  projects  except  as
  provided  in  clause (B) of this item (ii) or (B) forty thousand dollars
  for a high cost project or a project which will receive a loan from  the
  federal  farmers home administration. Among the criteria the corporation
  shall consider in determining whether a project is a high  cost  project
  are:  average cost of construction in the area, location of the project,
  and the impact of the additional funding on  the  affordability  of  the
  project for the occupants of such project. No more than fifty percent of
  the  total  amount  appropriated  pursuant to this article in any fiscal
  year shall be allocated to homes located within any single municipality.
    2. The corporation shall not enter into a contract under this  article
  except  with  an  eligible  applicant which has submitted an application
  pursuant to a request for proposals  issued  by  the  corporation  which
  application contains a plan acceptable to the corporation which provides
  that:
    (a)  The  proposed  project  or  program  will  make  home  ownership,
  rehabilitation or home improvement  affordable  to  persons  who  cannot
  afford  to  own,  rehabilitate  or  improve  homes  by  relying upon the
  ordinary unaided operation of private enterprise.
    (b) There shall be criteria, satisfactory to  the  corporation,  which
  provide  for  maximum income limitations or a system of income targeting
  designed  to  ensure  that  home  buyers  who  benefit  from   financial
  assistance provided pursuant to this article would be unable to acquire,
  rehabilitate  or  improve  homes  by  relying  upon the ordinary unaided
  operation of private enterprise.
    (c) The payments, grants and loans provided by  grantees  pursuant  to
  this  article will be supplemented by private or other public investment
  and the payments, grants and loans provided by the grantee are the least
  necessary to make home ownership,  rehabilitation  or  home  improvement
  affordable  to  the income group to be served by the proposed project or
  program.
    (d) The proposed project or projects, if not built or rehabilitated by
  a not-for-profit corporation,  will  be  built  or  rehabilitated  by  a
  private  developer/builder  who  has  agreed  to  limit  his  profit  in
  accordance with a formula, satisfactory to the  corporation,  which  has
  been established by the grantee.

    (e) The proposed project or program will provide assistance in an area
  which  is  blighted,  deteriorated  or deteriorating, or has a blighting
  influence on the surrounding area, or is in danger of becoming a slum or
  a blighted area because of the  existence  of  substandard,  insanitary,
  deteriorating  or  deteriorated  conditions,  an  aged housing stock, or
  vacant  non-residential  property,  or  other  factors   indicating   an
  inability  or  unwillingness  of the private sector unaided to cause the
  construction, rehabilitation or home  improvement  for  which  payments,
  grants and loans under this article is provided.
    (f)  Home  buyers  will  occupy  homes  as  their  principal  place of
  residence and funds provided for the benefit of the home buyer  will  be
  recaptured  by the grantee if the home buyer does not occupy the home as
  the home buyer's principal  place  of  residence  under  the  terms  and
  conditions of a formula established or approved by the corporation.
    (g)  In  the case of a rehabilitation or home improvement program, the
  majority of payments, grants and loans provided for each home  shall  be
  used to perform work which prolongs the useful life of the home or shall
  be  used to correct basic structural defects or to repair basic building
  systems which threaten or if not corrected or  repaired  could  threaten
  the health and safety of the dwelling's residents.
    (h)  The  corporation  shall  provide  the  applicant  with  a list of
  conditions that must be met prior to entering into a  contract  pursuant
  to  this  article.  Within  fifteen  working  days  of  receipt  by  the
  corporation  of  all  documents  in  satisfaction  of  the   list,   the
  corporation   shall   notify   the   applicant  of  the  sufficiency  or
  insufficiency of the documents. After satisfaction by the  applicant  of
  all  conditions  required  by  the  corporation prior to entering into a
  contract the corporation shall enter into the contract within forty-five
  working days of satisfaction of such conditions.
    (i) Eligible applicants receiving awards pursuant to this article  for
  homes  located  in  cities  with a population of one hundred thousand or
  more shall provide preference to homebuyers who are members of a  police
  force  of  such  city,  provided  that such city has adopted a local law
  authorizing such preference.
    3. In determining awards pursuant  to  this  article  the  corporation
  shall give preference to applications based upon the extent to which the
  proposed program or project will:
    (a) Serve the lowest income households in the applicable region and is
  designed  to  continue  to  be  affordable  to  such  households  for  a
  substantial period of time.
    (b) Leverage private and other public investment so as to  reduce  the
  amount  of  assistance  provided  pursuant  to  this  article  which  is
  necessary to operate or establish the program or project.
    (c) Contribute to the development of the neighborhood or community  in
  which the program or project is located.
    (d) Not directly displace current low and moderate income residents of
  such neighborhood or community.
    (e) Be undertaken and completed in a timely fashion.
    (f)  Utilize innovative, cost effective design techniques and building
  materials, which reduce construction, rehabilitation or operating  costs
  including, but not limited to factory built or modular homes.
    4.  The corporation shall not provide a grant to an eligible applicant
  pursuant to this article unless the corporation determines that there is
  a strong probability that the  private  investment  in  the  applicant's
  proposed  program would not be made without the grant and that the grant
  will not substitute for private funds which would be otherwise available
  to the program.

    5. The corporation shall provide for the review, at periodic intervals
  not less  than  annually,  of  the  performance  of  grantees  receiving
  financial  assistance pursuant to this article. Such review shall, among
  other  things,  be  for  the  purposes  of  ascertaining  conformity  to
  contractual  provisions,  the  financial  integrity  and  efficiency  of
  grantees and the  evaluation  of  the  grantees'  activities.  Contracts
  entered  into  pursuant  to this article may be terminated, funds may be
  withheld and unspent funds recaptured by the corporation upon a  finding
  of   substantial   nonperformance  or  breach  by  the  grantee  of  its
  obligations under its contract.