Establishes the home ownership assistance program; allows qualified individuals to receive home ownership assistance payments when they purchase an eligible home; defines who is eligible for such assistance payments and how much those assistance payments will be.
TITLE OF BILL: An act to amend the public housing law, in relation to creating a home ownership assistance program
PURPOSE: To promote home ownership by providing assistance to persons with an annual household income under eighty percent of the median poverty level toward purchasing a home, condominium or cooperative.
SUMMARY OF PROVISIONS: Amends the Public Housing Law by adding a new Article IX entitled the "Home Ownership Assistance Program." The following new sections are created in this new article:
- §170 allows for the creation of the Home Ownership Program within the New York City Department of Housing Preservation and Development (HPD). It also defines the terms "eligible unit," "qualified household," and "qualified not-for-profit." A qualified household is any person or family with an annual household income under eighty percent of the median poverty level who has been employed for more than twelve months. Persons over the age of sixty-five years old and individuals who are disabled do not have to meet the employment requirement. Qualified households that are accepted into the program may purchase any home, condominium or cooperative that are within the price limit set in §172. Finally, this section also provides for qualified non-profits that have experience and the capacity to undertake a purchase for rehabilitation and resell to participate in the program.
- §171 sets forth the parameters of the Home Ownership Assistance Program by establishing a maximum purchase price, prohibits "overcrowding," and defines monthly home ownership expenses to include mortgage interest rates and insurance premiums, real estate taxes, home owners insurance and repairs. Provides that monthly expenses may not exceed thirty percent of the household gross monthly income.
-§172 established an application and review process. Qualified households must apply for home ownership assistance. Housing Units must meet the standards § 171(2). Upon approval, the applicant must attend "home ownership assistance counseling," which will include guidance in budgeting and home maintenance.
-§173 sets the amount and procedure for home ownership assistance payments. The maximum financial assistance under the Home
Ownership Program may not exceed the total cost of acquisition and rehabilitation. Financial assistance shall be made available through a pro-rated loan. New York City Department of Housing Preservation and Development has the right to determine what qualifies as capital improvement and must be notified of such improvement prior to commencement of rehabilitation. The maximum assistance for qualified not-for-profit may not exceed twenty thousand per building. Subdivision three sets the guidelines for the reselling of the property.
-§174 sets forth the terms of assistance for non-profit organizations including the maximum amount of financial assistance available as defined in section 173, and allows the organization to manage the property during an interim period under a lease-to-own program. The purchaser must be located within twelve months from purchase by the non-profits and the initial occupant must qualify as an eligible household.
-§175 authorizes the New York City Department of Housing Preservation and Development to implement any rule or regulation necessary for the successful implementation of this program and sets an application fee for the Home Ownership Program of $100.
-§176 defines the funding for the Home Ownership Assistance Program through the use of two percent of the funding allocated to the New York State Home Program and Community Development Block Grant to the program.
JUSTIFICATION: This legislation will create the Home Ownership Assistance program which will provide financial assistance to first time home buyers with an annual household income under eighty percent of the median poverty level to purchase a home, condominium or cooperative.
The United States Census Bureau 1999-2000 survey placed the poverty rate in New York City at 19.3% compared to that of the State of New York overall at 13.8%. Throughout New York City there is a lack of available affordable housing for low-income families. This legislation will allow qualified families to purchase a home condominium or cooperative within New York City, who otherwise would not be able to afford such purchases.
LEGISLATIVE HISTORY: 2009-10: S.1138 - Referred to Housing, Construction and Community Development 2007-08: S.2916 - Referred to Housing, Construction and Community Development 2005-06: S.1569 - Referred to Housing, Construction and Community Development 2003-04: S.2486 - Referred to Housing, Construction and Community Development
2002: S.6755 - Referred to Housing, Construction and Community Development
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: One hundred eighty days after it shall have become law, with provisions.
STATE OF NEW YORK ________________________________________________________________________ 1384 2011-2012 Regular Sessions IN SENATE January 7, 2011 ___________Introduced by Sens. PERKINS, DIAZ, DILAN, DUANE, HASSELL-THOMPSON, PARK- ER, SMITH -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the public housing law, in relation to creating a home ownership assistance program THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The public housing law is amended by adding a new article 9 to read as follows: ARTICLE IX HOME OWNERSHIP ASSISTANCE PROGRAM SECTION 170. DEFINITIONS. 171. HOME OWNERSHIP ASSISTANCE PROGRAM. 172. APPLICABILITY OF THE PROGRAM. 173. AMOUNT AND PROCEDURE FOR HOME OWNERSHIP ASSISTANCE PAYMENTS. 174. TERMS OF ASSISTANCE FOR NOT-FOR-PROFIT ORGANIZATIONS. 175. RULES AND REGULATIONS. 176. FUNDING FOR THE HOME OWNERSHIP ASSISTANCE PROGRAM. S 170. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS: 1. "DEPARTMENT" SHALL MEAN THE NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT. 2. "ELIGIBLE UNIT" SHALL MEAN: A. ANY (I) HOME WITH FOUR OR LESS UNITS; (II) CONDOMINIUM; OR (III) COOPERATIVE; B. WHERE THE PURCHASE OF SUCH HOME, CONDOMINIUM, OR COOPERATIVE IS PROVIDED FOR, INSURED, OR GUARANTEED BY THE STATE OR FEDERAL GOVERNMENT. 3. "QUALIFIED HOUSEHOLD" SHALL MEAN ANY PERSON OR HIS OR HER FAMILY MEMBER WHO:EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03424-01-1 S. 1384 2
A. (I) HAS AN ANNUAL HOUSEHOLD INCOME UNDER EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL, PROVIDED, THAT ANY ASSISTANCE RECEIVED AS A RESULT OF A SOCIAL PROGRAM SHALL NOT BE CONSIDERED WHEN CALCULATING AN INDIVID- UAL'S GROSS INCOME. THE DEPARTMENT SHALL DETERMINE INCOME ELIGIBILITY OF HOME BUYERS USING THE INCOME DETERMINATION METHODOLOGY UTILIZED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT IN ACCORD- ANCE WITH THEIR SECTION 8 HOUSING PROGRAM; OR (II) IS OVER THE AGE OF SIXTY-FIVE; OR (III) IS DIAGNOSED BY A LICENSED PHYSICIAN TO BE MENTALLY OR PHYS- ICALLY DISABLED; B. DOES NOT CURRENTLY OWN A HOUSING UNIT IN THE CITY OF NEW YORK OR ANY OTHER LOCATION, INCLUDING A SINGLE FAMILY HOUSE, CONDOMINIUM UNIT, COOPERATIVE UNIT, OR RENTAL UNIT THAT COULD BE OWNER OCCUPIED; C. HAS NOT PREVIOUSLY RECEIVED HOME OWNERSHIP ASSISTANCE PAYMENTS PURSUANT TO THIS ARTICLE; AND D. IS CURRENTLY EMPLOYED AND HAS BEEN GAINFULLY EMPLOYED FOR AT LEAST TWELVE MONTHS PRIOR TO HIS OR HER APPLICATION FOR HOME OWNERSHIP ASSIST- ANCE PAYMENTS, EXCEPT THAT THIS PARAGRAPH SHALL NOT APPLY TO AN INDIVID- UAL WHO QUALIFIES PURSUANT TO SUBPARAGRAPH (II) OR (III) OF PARAGRAPH A OF THIS SUBDIVISION. 4. "QUALIFIED NOT-FOR-PROFIT ORGANIZATION" SHALL MEAN AN ORGANIZATION THAT IS TAX EXEMPT PURSUANT TO SUBSECTION (C) OF SECTION 501 OF THE INTERNAL REVENUE CODE AND WHOSE PURPOSE IS TO ASSIST HOUSEHOLDS, WHOSE INCOME IS UNDER EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL, WITH PURCHASING A HOME. SUCH ORGANIZATION MUST SHOW EXPERIENCE AND CAPACITY TO UNDERTAKE A PURCHASE FOR REHABILITATION AND TO RESELL TO QUALIFIED HOUSEHOLDS AS DEFINED IN SUBDIVISION THREE OF THIS SECTION. S 171. HOME OWNERSHIP ASSISTANCE PROGRAM. 1. THERE IS HEREBY ESTAB- LISHED A HOME OWNERSHIP ASSISTANCE PROGRAM. THE PURPOSE OF THE PROGRAM IS TO PROVIDE FINANCIAL ASSISTANCE TO LOW INCOME HOUSEHOLDS, WITH ANNUAL INCOMES UNDER EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL WHO DO NOT CURRENTLY OWN A HOME, TO PURCHASE AN ELIGIBLE UNIT FOR PURPOSES OF REHA- BILITATION AND OWNERSHIP. 2. THE MAXIMUM PURCHASE PRICE SHALL BE THE SINGLE FAMILY MORTGAGE LIMITS DEFINED UNDER 24 C.F.R. 203 AND SHALL BE ADJUSTED ACCORDING TO THE ADJUSTMENTS MADE BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. 3. THE UNIT MAY NOT BE "OVERCROWDED" AS DEFINED IN THE HOUSING QUALITY STANDARDS, WHICH ARE ISSUED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. A SUFFICIENT NUMBER OF BEDROOMS ARE REQUIRED TO PROVIDE ADEQUATE SLEEPING SPACE FOR ALL MEMBERS OF THE HOUSEHOLD. THERE MUST BE ONE BEDROOM FOR EVERY TWO MEMBERS OF THE FAMILY, PROVIDED THAT CHILDREN OF THE OPPOSITE SEX MAY NOT SHARE A BEDROOM. 4. MONTHLY HOME OWNERSHIP EXPENSES SHALL INCLUDE INTEREST ON THE MORT- GAGE, MORTGAGE INSURANCE PREMIUMS, REAL ESTATE TAXES, HOME OWNERSHIP INSURANCE, AND MAJOR REPAIRS AND REPLACEMENTS. HOUSING EXPENSES AFTER THE PURCHASE AND REHABILITATION OF A HOME MAY NOT EXCEED THIRTY PERCENT OF THE HOUSEHOLD'S GROSS MONTHLY INCOME. S 172. APPLICABILITY OF THE PROGRAM. 1. A QUALIFIED HOUSEHOLD MUST MAKE AN APPLICATION TO THE DEPARTMENT TO RECEIVE HOME OWNERSHIP ASSIST- ANCE PAYMENTS. 2. THE DEPARTMENT SHALL APPROVE AN INDIVIDUAL'S APPLICATION IF IT FINDS THAT: A. SUCH INDIVIDUAL IS PART OF A QUALIFIED HOUSEHOLD AS DEFINED IN SUBDIVISION THREE OF SECTION ONE HUNDRED SEVENTY OF THIS ARTICLE;S. 1384 3
B. THE HOME TO BE PURCHASED BY THE INDIVIDUAL IS AN ELIGIBLE UNIT AS DEFINED IN SUBDIVISION TWO OF SECTION ONE HUNDRED SEVENTY OF THIS ARTI- CLE; C. THE HOME TO BE PURCHASED HAS BEEN INSPECTED BY A DEPARTMENT APPROVED HOME INSPECTOR; D. THE HOME TO BE PURCHASED HAS BEEN APPRAISED AT A VALUE NEAR OR ABOVE THE MAXIMUM PURCHASE PRICE AS DEFINED IN SUBDIVISION TWO OF SECTION ONE HUNDRED SEVENTY-ONE OF THIS ARTICLE. IF THE PURCHASE PRICE EXCEEDS THE MAXIMUM PURCHASE PRICE, THE ELIGIBLE HOUSEHOLD MUST PAY THE DIFFERENCE. THE ELIGIBLE HOUSEHOLD MUST GIVE THE FUNDS TO THE DEPARTMENT AT THE CLOSING. THE DEPARTMENT WILL HOLD THE FUNDS IN AN INTEREST BEAR- ING ESCROW ACCOUNT AND MAKE PAYMENTS FROM SUCH ACCOUNT AS NECESSARY. ALL ELIGIBLE HOUSEHOLD FUNDS MUST BE EXPENDED BEFORE ANY HOME OWNERSHIP ASSISTANCE PROGRAM PAYMENTS MAY BE MADE. 3. UPON APPROVAL OF THE INDIVIDUAL'S APPLICATION, THE INDIVIDUAL MUST ATTEND HOME OWNERSHIP ASSISTANCE COUNSELING. SUCH COUNSELING SHALL INCLUDE, BUT NEED NOT BE LIMITED TO: A. HOME MAINTENANCE; B. BUDGETING AND MONEY MANAGEMENT; C. CREDIT COUNSELING; AND D. HOW TO OBTAIN HOME OWNERSHIP FINANCING, INCLUDING HOW TO IDENTIFY AND AVOID LOANS WITH OPPRESSIVE TERMS AND CONDITIONS. 4. UPON COMPLETION OF THE HOME OWNERSHIP COUNSELING PURSUANT TO SUBDI- VISION THREE OF THIS SECTION, THE DEPARTMENT SHALL MAKE HOME OWNERSHIP ASSISTANCE PAYMENTS IN ACCORDANCE WITH SECTION ONE HUNDRED SEVENTY-THREE OF THIS ARTICLE. 5. THE REFINANCING OF A HOME THAT IS A BASIS FOR RECEIVING HOME OWNER- SHIP ASSISTANCE PAYMENTS SHALL AUTOMATICALLY CAUSE SUCH PAYMENTS TO CEASE AND BE TERMINATED. 6. IF ANY QUALIFIED HOUSEHOLD THAT HAS BEEN APPROVED AND IS RECEIVING HOME OWNERSHIP ASSISTANCE PAYMENTS DEFAULTS ON ITS MORTGAGE PAYMENT, SUCH HOME OWNERSHIP ASSISTANCE PAYMENTS SHALL AUTOMATICALLY CEASE AND BE TERMINATED. S 173. AMOUNT AND PROCEDURE FOR HOME OWNERSHIP ASSISTANCE PAYMENTS. 1. THE MAXIMUM FINANCIAL ASSISTANCE UNDER THE HOME OWNERSHIP ASSISTANCE PROGRAM FOR ELIGIBLE HOUSEHOLDS SHALL NOT EXCEED THE TOTAL COST OF ACQUISITION AND REHABILITATION. THE ASSISTANCE PROVIDED FOR THE PURCHASE OF THE PROPERTY SHALL BE A PRORATED LOAN. THE DEPARTMENT WILL PLACE A MORTGAGE ON THE PROPERTY TO SECURE THE LOAN. THE MORTGAGEE MAY BE SUBOR- DINATED TO ANY OTHER MORTGAGEE APPROVED BY THE DEPARTMENT THAT IS PRES- ENTLY ON OR THAT MAY BE PLACED ON THE PROPERTY. THE DEPARTMENT SHALL HAVE THE RIGHT TO DETERMINE WHETHER OR NOT AN IMPROVEMENT QUALIFIES AS CAPITAL IMPROVEMENTS. PRIOR TO THE COMMENCEMENT OF CAPITAL IMPROVEMENTS, THE PROPERTY OWNER MUST NOTIFY THE DEPARTMENT AND PROVIDE A COST ESTIMATE. THE DEPARTMENT SHALL HAVE THE RIGHT TO INSPECT THE PROPERTY PRIOR TO AND UPON COMPLETION OF CONSTRUCTION. THE PROPERTY OWNER MUST PROVIDE DOCUMENTATION OF ALL WORK PERFORMED. 2. THE MAXIMUM ASSISTANCE FOR QUALIFIED NOT-FOR-PROFIT ORGANIZATIONS, AS DEFINED IN SUBDIVISION FOUR OF SECTION ONE HUNDRED SEVENTY OF THIS ARTICLE, MAY NOT EXCEED TWENTY THOUSAND DOLLARS PER BUILDING. 3. THE PROPERTY MAY BE SOLD SUBJECT TO THE FOLLOWING CONDITIONS: A. THE MAXIMUM SALE PRICE WILL BE DETERMINED BY THE FOLLOWING FORMULA: THE ORIGINAL SUBSIDIZED PRICE OF THE HOME MULTIPLIED BY A FRACTION WHERE THE NUMERATOR IS THE MEDIAN INCOME FOR A FAMILY OF FOUR IN NEW YORK CITY IN THE YEAR OF THE RESALE AND THE DENOMINATOR IS THE CORRESPONDING FIGURE FOR THE YEAR THE PROPERTY WAS PURCHASED. BOTH NUMBERS SHALL BES. 1384 4
DETERMINED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOP- MENT. B. THE OWNER'S DOWN PAYMENT AND THE VALUE OF QUALIFYING CAPITAL IMPROVEMENTS MAY BE ADDED TO THE MAXIMUM RESALE PRICE. QUALIFYING IMPROVEMENTS ARE THOSE DEFINED AND APPLIED BY THE NEW YORK STATE DEPART- MENT OF TAXATION AND FINANCE THAT DO NOT CONSTITUTE UNAFFORDABLE LUXU- RIES DEFINED AS ITEMS NOT NORMALLY CONSIDERED A NECESSARY OR CUSTOMARY PART OF A RESIDENCE IN THE SURROUNDING NEIGHBORHOOD. THE DEPARTMENT SHALL HAVE THE RIGHT TO DETERMINE WHETHER OR NOT AN IMPROVEMENT QUALI- FIES AS CAPITAL IMPROVEMENTS. PRIOR TO THE COMMENCEMENT OF CAPITAL IMPROVEMENTS, THE PROPERTY OWNER MUST NOTIFY THE DEPARTMENT AND PROVIDE A COST ESTIMATE. THE DEPARTMENT SHALL HAVE THE RIGHT TO INSPECT THE PROPERTY PRIOR TO AND UPON COMPLETION OF CONSTRUCTION. THE PROPERTY OWNER MUST PROVIDE DOCUMENTATION OF ALL WORK PERFORMED. S 174. TERMS OF ASSISTANCE FOR NOT-FOR-PROFIT ORGANIZATIONS. FINANCIAL ASSISTANCE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-THREE OF THIS ARTI- CLE MAY BE PROVIDED TO NOT-FOR-PROFIT ORGANIZATIONS FOR THE PURPOSE OF RESALE TO QUALIFIED HOUSEHOLDS AS DEFINED IN SUBDIVISION THREE OF SECTION ONE HUNDRED SEVENTY OF THIS ARTICLE. 1. THE NOT-FOR-PROFIT ORGANIZATION MAY MANAGE THE PROPERTY DURING AN INTERIM PERIOD UNDER A "LEASE TO OWN" PROGRAM BEFORE TRANSFERRING TITLE TO THE PROPERTY AND MUST SUBMIT COMPLETE DEVELOPMENT AND OPERATING BUDG- ETS FOR THE INTERIM TO THE DEPARTMENT. A. AN ELIGIBLE "LEASE TO OWN" PURCHASER MUST BE LOCATED WITHIN TWELVE MONTHS FROM PURCHASE BY THE NOT-FOR-PROFIT ORGANIZATION. B. THE INITIAL OCCUPANT OF THE OWNER'S UNIT, WHETHER A TENANT DURING A RENTAL AGREEMENT, TENANT DURING A LEASE TO OWN PERIOD, OR HOME BUYER, MUST QUALIFY AS AN ELIGIBLE HOUSEHOLD. FIFTY-ONE PERCENT OF THE UNITS MUST BE OCCUPIED AT INITIAL OCCUPANCY BY HOUSEHOLDS WHOSE HOUSEHOLD INCOME IS LESS THAN EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL. C. RENT, INCLUDING UTILITIES, FOR A HOUSEHOLD WHERE THE HOUSEHOLD INCOME IS BETWEEN FIFTY AND EIGHTY PERCENT OF THE MEDIAN POVERTY LEVEL CANNOT EXCEED THIRTY PERCENT OF THE HOUSEHOLD MONTHLY INCOME. IF TENANTS PAY UTILITIES, THE RENT SHALL BE ADJUSTED BY THE AMOUNT OF THE UTILI- TIES. D. NOT-FOR-PROFIT ORGANIZATIONS MUST SUBMIT A PROPOSED RESALE PROCESS OR FORMULA FOR DEPARTMENTAL REVIEW AND APPROVAL. E. IN ALL CASES, TRANSFER OF TITLE TO THE PROPERTY FROM THE NOT-FOR-PROFIT ORGANIZATION TO AN ELIGIBLE HOUSEHOLD MUST TAKE PLACE WITHIN FIVE YEARS FROM PURCHASE BY THE NOT-FOR-PROFIT ORGANIZATION. F. IF THE NOT-FOR-PROFIT ORGANIZATION FAILS TO MEET THESE DEADLINES, THE DEFERRED LOAN SHALL BE DUE AND PAYABLE WITH ACCRUED INTEREST AT A RATE OF FOUR PERCENT. S 175. RULES AND REGULATIONS. 1. THE DEPARTMENT IS AUTHORIZED TO IMPLEMENT ANY RULE OR REGULATION NECESSARY FOR THE SUCCESSFUL IMPLEMEN- TATION OF THIS PROGRAM. 2. THE DEPARTMENT MAY CREATE ANY FORM AND REQUIRE ANY APPLICANT TO FILL OUT SUCH FORM BEFORE RECEIVING DEPARTMENTAL APPROVAL FOR THE HOME OWNERSHIP ASSISTANCE PAYMENTS. 3. THE DEPARTMENT MAY CHARGE AN APPLICATION FEE FOR THE PROCESSING OF A HOUSEHOLD'S HOME OWNERSHIP ASSISTANCE PAYMENT APPLICATION. SUCH FEE SHALL NOT EXCEED ONE HUNDRED DOLLARS. S 176. FUNDING FOR THE HOME OWNERSHIP ASSISTANCE PROGRAM. FUNDING SHALL BE OBTAINED BY USING FUNDS FROM THE COMMUNITY DEVELOPMENT BLOCK GRANT AND THE NEW YORK STATE HOME PROGRAM. TWO PERCENT OF THE TOTALS. 1384 5
AMOUNT OF EACH, RESPECTIVELY, SHALL BE USED TO FUND THE HOME OWNERSHIP ASSISTANCE PROGRAM. S 2. This act shall take effect on the one hundred eightieth day after it shall have become a law; provided, however, that effective immediate- ly, the addition, amendment and/or repeal of any rule or regulation necessary for the timely implementation of this act on its effective date is hereby authorized and directed to be made on or before such effective date.