N.Y. Comp. Codes R. & Regs. tit. 9 § 1920.8

Current through Register Vol. 46, No. 45, November 2, 2024

Section 1920.8 - Project supervision

(a) Construction financing. An eligible applicant shall not borrow any funds for the project without the prior written approval of the Corporation. Said approval shall be based on various factors including, but not limited to, the demonstrated need for additional funds for the project, the project's capacity to support additional debt and the effect of such additional debt on the Corporation's interest in the project.

(b) Resale provisions.

(1) A project may only be transferred or sold with the approval of the Corporation to an eligible owner approved by the Corporation. Said approval shall be based upon various factors including, but not limited to, the needs of the project, compliance with the purposes of the Act and the ability of the proposed transferee to operate the project.

(2) The resale price of a project shall be subject to the same limitations as that set forth for rental projects in section 1102(3)(f)(ii) of the Private Housing Finance Law.

(c) Establishment of reserves and funds.

(1) The working capital fund shall be set up and managed by the eligible owner prior to occupancy and shall be a turnkey project cost. The fund may be used during the first year of operation of the project, after which the remaining balance of the fund shall be deposited in the operating reserve fund.

(2) Reserve fund.

(i) The reserve fund shall initially be not less than five percent of turnkey project cost, exclusive of the reserve fund.

(ii) If the source of the initial reserve fund is not the Corporation, either cash or adequate marketable collateral shall be deposited into the reserve fund prior to the disbursement by the Corporation of any grant or loan for the payment of any turnkey project costs except for planning costs.

(iii) The reserve fund shall consist of separate accounts for an operating reserve, replacement reserve and such other reserves as the Corporation may require in a request for proposals.

(iv) The reserve fund may be a turnkey project cost.

(v) The reserve fund shall be deposited in a banking institution whose principal place of business is located within the State of New York and which has a proven record of investment in the community in which the project is located as determined by the Corporation.

(vi) The reserve fund may not be used until one year after substantial occupancy, except in the event of an imminent threat to the health and safety of the tenants.

(vii) The terms and conditions for funding and management of the reserve fund shall be set out in Corporation policy and the agreements between the Corporation and the eligible owner.

(d) Contract provisions.

(1) All contracts between the Corporation and the eligible applicant or eligible owner shall set forth the following: Except for obligations the Corporation is to assume by contract for the construction, rehabilitation and development period of any project, neither the Corporation, the New York State Housing Finance Agency, nor the State shall have any responsibility or liability as to construction, rehabilitation, operation, maintenance, repair or use of projects, unless otherwise specifically provided by law.

(2) The Corporation may provide for the deposit of any grant or loan directly with a lending institution pursuant to an escrow agreement satisfactory to the Corporation. The Corporation shall take into consideration such factors as compliance with its investment policy and the needs of the project.

(e) Project administration.

(1) Subject to the availability of funds, the Corporation may provide technical services or assistance or contract to provide for technical services or assistance to eligible applicants and owners.

(2)

(i) The Corporation shall review at periodic intervals, but not less than once a year, the performance of eligible applicants and eligible owners.

(ii) Eligible applicants and eligible owners shall provide such periodic reports as the Corporation may require to facilitate the evaluation process. The reports shall include, but shall not be limited to, the following items:

(a) progress of proposed construction or rehabilitation;

(b) the status of project operations; and

(c) annual audited financial statements in accordance with generally accepted auditing standards or such other financial reports as the Corporation may require.

(3) Participation by minority group members and women. All awards of payments, grants or loans of over one hundred thousand dollars shall require the eligible applicant, for projects in which bids are required, to submit for approval of the Corporation a utilization plan as defined in section three hundred ten, subdivision nine, of the New York State Executive Law prior to the award of a payment, grant or loan.

(4) Participation by minority group members and women--contract requirements. All agreements shall Contain such provisions as are necessary to effectuate the provisions of article 15-A of the Executive Law and the regulations promulgated thereunder. Such provisions include, but are not limited to, the following provisions:

(i) a good faith effort to solicit active participation by enterprises identified in the directory of certified businesses maintained by the Governor's Office of Minority and Women's Business Development;

(ii) agreement to be bound by the provisions of section 316 of the Executive Law; and

(iii) requirement that any subcontractor comply with subparagraph (i) and (ii) of this paragraph.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 1920.8