* § 2405-d. Lease-to-own program. (1) The agency is authorized to\nparticipate in lease-to-own programs as described in this section. The\npurpose of a lease-to-own program is to provide mortgage financing for a\nresidence occupied as a primary residence by a prospective mortgagor\npursuant to a lease-to-own contract with the owner of such property. The\nlease-to-own contract shall provide for the eventual purchase by the\nresident of the residence and an interim lease of the residence prior to\nthe closing of the purchase thereof. The party to the lease-to-own\ncontract who is the seller of the residence is referred to in this\nsection as the "seller". The prospective purchaser who is a party to the\nlease-to-own contract is referred to in this section as the\n"tenant-purchaser". A "residence" for the purpose of this section is a\nsingle-family home, a condominium housing unit or a housing unit owned\nby a cooperative housing corporation.\n (2) The agency may contract to acquire and may acquire a mortgage loan\nor loans made by a bank to a seller who has entered a lease-to-own\ncontract with an eligible tenant-purchaser for the property which is the\nsubject of and security for such mortgage loan.\n (3) (a) The lease-to-own contract shall contain:\n (i) a lease of the residence, or in the case of cooperative housing\nunits a sublease, for a term not to exceed five years.\n (ii) provision for a rental payment not less than the sum of (A) an\namount sufficient to pay the estimated real property taxes and insurance\non the residence, or in the case of a cooperative unit, the maintenance\ncharges; (B) the cost of routine maintenance of the residence unless the\nlease-to-own contract requires the tenant-purchaser to perform such\nmaintenance at his own expense; (C) an amount sufficient to pay the\ninterest on the mortgage loan held by the agency on the residence less\nthe estimated earnings on the escrow fund provided for in subdivision\nfour of this section which is allocable to such mortgage held by the\nagency; (D) an amount to be held in escrow, referred to as the\n"tenant-purchaser escrow", which, when accumulated over the period of\nthe lease-to-own contract, will amount to a sum sufficient to pay the\ntenant-purchaser's required down payment under the lease-to-own contract\nplus the estimated closing costs of purchase which will be allocable to\nthe tenant-purchaser, including the seller's closing costs at the\ninitial closing of the mortgage to the seller; and (E) in the case of a\ncondominium unit, common charges.\n (iii) provisions obligating the tenant-purchaser to buy and the seller\nto sell the residence at the end of the lease term.\n (iv) a provision under which the seller waives specific performance\nwith respect to the tenant-purchaser's obligation to purchase.\n (v) a provision that default by the tenant-purchaser under the\nprovisions of the lease-to-own contract shall result in the forfeiture\nto the seller of all amounts in the tenant-purchaser escrow.\n (vi) a provision that the tenant-purchaser shall have the option upon\nreasonable notice to the seller and the agency to elect to close the\npurchase of the residence at an earlier date than that specified in the\nlease-to-own contract.\n (vii) a provision that the rent shall be adjusted under the\nlease-to-own contract periodically to take account of changes in taxes,\ninsurance, escrow earnings and other variables intended to be covered by\nthe tenant's rental payment.\n (viii) a provision governing the consequences of default by each of\nthe parties.\n (b) The provisions of the emergency housing rent control law, the\nlocal emergency housing rent control act, the city rent and\nrehabilitation law, the emergency tenant protection act of nineteen\nseventy-four and the New York city rent stabilization law of nineteen\nhundred sixty-nine shall not apply to a residence subject to a\nlease-to-own mortgage, provided that the mortgage is purchased by the
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