N.Y. Comp. Codes R. & Regs. tit. 9 § 1902.2

Current through Register Vol. 46, No. 36, September 4, 2024

Section 1902.2 - Resale provisions

(a) The terms and conditions of any transfer of ownership, resale, refinancing or additional financing of a project assisted hereunder must be submitted to the corporation or its designee for approval. The corporation or its designee reserves the right to restructure or recapture any payments, grants or loans to a project as a result of its review of such proposals.

(b) Homesteading project.

(1) A homesteading project may only be transferred or sold to an eligible applicant.

(2) The resale price of a homesteading project shall not exceed an amount equal to the sum of:

(i) the funds originally paid by the owner to purchase and rehabilitate or construct the project, plus the lesser of the cost or the fair market value of material contributed thereto, plus the lesser of the cost of labor or the fair market value of labor contributed thereto, with interest thereon at the rate of six percent per annum, excluding all funds received pursuant to the act and from such other sources as determined by the corporation;

(ii) the payments made by the owner after rehabilitation or construction for capital improvements, with interest thereon at the rate of six percent per annum, excluding all funds received pursuant to the act and from such other sources as determined by the corporation;

(iii) the reduction in the amount of the outstanding principal of all mortgages and/or loans for such project paid by the owner, to the extent that the proceeds of such mortgages and loans were used only for the purchase, rehabilitation, construction and capital improvement of the project with interest thereon at the rate of six percent per annum;

(iv) the actual principal indebtedness of all mortgages on, and loans for, such project as referred to in subparagraph (iii) of this paragraph, which the owner is required to satisfy, provided that if the indebtedness is not paid in full upon the sale of the project, such owner shall not be credited with the amount of such indebtedness; and

(v) the reasonable costs and expenses incurred in connection with the sale of such project.

(c) Cooperative project.

(1) The shares to a cooperative unit may only be transferred or sold to an eligible applicant.

(2) The resale price of shares applicable to a cooperative unit shall not exceed an amount equal to the sum of:

(i) the funds originally paid by the tenant shareholder to purchase such shares and rehabilitate or construct the unit, plus the lesser of the cost or fair market value of the contribution to the unit of material and of labor, with interest thereon at the rate of six percent per annum, excluding all funds received pursuant to the act and from such other sources as determined by the corporation;

(ii) the payments made by the tenant shareholder after rehabilitation or construction for capital improvements made to such unit, with interest thereon at the rate of six percent per annum, excluding all funds received pursuant to the act and from such other sources as determined by the corporation;

(iii) the pro rata portion of any capital assessment or capital contribution for building-wide improvements paid by such tenant shareholder, with interest thereon at the rate of six percent per annum;

(iv) the pro rata portion of the reduction in the amount of the outstanding principal of all mortgages on such project paid by the tenant shareholder, with interest thereon at the rate of six percent per annum;

(v) the reduction in the amount of the outstanding principal on all loans for such unit paid by the tenant shareholder to the extent that the proceeds of the loan were used for the purchase of shares or for the cost of the rehabilitation or construction of, or capital improvement to, such unit with interest thereon at the rate of six percent per annum;

(vi) the actual outstanding principal indebtedness on all loans or other obligations for such unit, which the tenant shareholder is required to satisfy, and to the extent that the proceeds of such loans were used for the purchase of shares or for the cost of rehabilitation or rehabilitation of, or the capital improvement to, such unit, provided that if such indebtedness is not paid in full upon the sale of such tenant's shares such tenant shareholder shall not be credited with the amount of such indebtedness; and

(vii) the reasonable costs and expenses incurred in connection with the sale of such shares.

(d) Condominium project.

(1) A condominium unit shall be transferred or sold only to an eligible applicant.

(2) The resale price of a condominium unit shall not exceed an amount equal to the sum of:

(i) the funds originally paid by the owner to purchase and rehabilitate or construct such unit, plus the lesser of the cost or fair market value of the contribution to the unit of material and of labor, with interest thereon at the rate of six percent per annum, excluding all funds received pursuant to the act and from such other sources as determined by the corporation;

(ii) the payments made by the owner after rehabilitation or construction for capital improvements to the unit, with interest thereon at the rate of six percent per annum, excluding all funds received pursuant to the act and from such other sources as determined by the corporation;

(iii) the pro rata portion of any capital assessment or capital contribution for building-wide improvements paid by such owner to the project, with interest thereon at the rate of six percent per annum;

(iv) the reduction in the amount of the outstanding principal of all mortgages on, and loans for, such unit paid by the owner to the extent that the proceeds of such mortgages and loans were used only for the purchase, rehabilitation or construction and capital improvement of the unit, with interest thereon at the rate of six percent per annum;

(v) the actual outstanding principal indebtedness of all mortgages on, and loans or other obligations for, such unit which the owner is required to satisfy, and to the extent that the proceeds of such mortgages and loans were used only for the purchase, rehabilitation or construction and capital improvement of the unit, provided that if such indebtedness is not paid in full upon the sale of such unit, such owner shall not be credited with the amount of such indebtedness; and

(vi) the reasonable costs and expenses incurred in connection with the sale of such unit.

(e) Rental project.

(1) A rental project may only be transferred or sold to an eligible applicant.

(2) The resale price of a rental project shall not exceed an amount equal to the sum of:

(i) the funds originally paid by the owner to purchase and rehabilitate or construct such project, with interest thereon at the rate of six percent per annum, excluding all funds received pursuant to the act and from such other sources as determined by the corporation;

(ii) the payments made by the owner, after rehabilitation or construction, for capital improvements to the project, with interest thereon at the rate of six percent per annum, excluding all funds received pursuant to the act and from such other sources as determined by the corporation;

(iii) the reduction in the amount of outstanding principal of all mortgages on, and loans for, such project paid by the owner to the extent that the proceeds of such mortgages and loans were used only for the purchase, rehabilitation and capital improvement of the project, with interest thereon at the rate of six percent per annum;

(iv) the actual outstanding principal indebtedness of all mortgages on, and loans or other obligations for, such project which the owner is required to satisfy, and to the extent that the proceeds of such mortgages and loans were used only for the purchase, rehabilitation and capital improvement of the project, provided that if such indebtedness is not paid in full upon the sale of the project, such owner shall not be credited with the amount of such indebtedness; and

(v) the reasonable costs and expenses incurred in connection with the sale of such project.

(f) Rental projects shall be operated initially as rental properties. Conversion of a rental project to a cooperative or condominium ownership shall be subject to the consent of the corporation, and if done pursuant to sections 352-eee and 352-eeee of the General Business Law shall only be allowed pursuant to a noneviction plan. The resale provisions set forth in subdivisions (c) and (d) of this section shall thereafter apply to the project.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 1902.2