* § 576-c. Loans to housing development companies by a municipality.\n1. In addition to the powers granted to municipalities pursuant to this\narticle, a municipality, acting by its supervising agency, may make\nloans for the purposes of acquisition, rehabilitation or construction of\ndwelling accommodations to a non-profit housing development fund\ncompany, a wholly-owned subsidiary of such company, a partnership the\ncontrolling interest of which is held by such company and which has\nagreed to limit profits or rate of return of investors in accordance\nwith a formula established or approved by the company, or a private\ndeveloper which has agreed to limit profits or rate of return of\ninvestors in accordance with a formula established or approved by the\ncompany, which agrees to provide housing accommodations exclusively for\npersons and families of low income, at least thirty percent of whom are\nreferred to it by a municipality and have prior to their initial\noccupancy in such accommodations resided in emergency shelter facilities\noperated by or on behalf of the municipality or who are otherwise in\nneed of emergency shelter as determined by the municipality, providing,\nhowever, that in the case of a building acquired by such a company,\nsubsidiary, partnership, or developer the obligation to provide housing\naccommodations for such persons shall be applicable only to dwelling\naccommodations which are or become vacant after the date of acquisition.\nSuch loans may be made for such period of time and pursuant to such\nterms and conditions as may be required by the municipality, including,\nbut not limited to, terms and conditions providing that the lien created\nby the note and mortgage, and, if applicable, any regulatory agreement\nexecuted by the owner and such municipality or restrictive covenant\napproved by a supervising agency, may be recorded in an equal or\nsubordinate position, or subsequently made equal or subordinate, to a\nlien recorded by any private lender against the dwelling aided by the\nloan made pursuant to this article, and the supervising agency of such\nmunicipality may provide that the amount of the note and mortgage shall\nautomatically be reduced to zero in five equal decrements commencing on\nthe tenth year after the initial occupancy date, provided that, as of\nthe date of such reduction, such accommodations have been and continue\nto be owned and operated in a manner consistent with an agreement with\nthe municipality contained in such note and mortgage to provide housing\nfor such persons. Notwithstanding such provision as contained in the\nnote and mortgage, the loan shall be reduced to zero only if, prior to\nor simultaneously with delivery of such note and mortgage, the\nsupervising agency made a written determination that such reduction\nwould be necessary to ensure the continued affordability or economic\nviability of such housing project. Such written determination shall\ndocument the basis upon which the loan was determined to be eligible for\nevaporation.\n 2. Notwithstanding the provisions of, or any regulation promulgated\npursuant to, the emergency housing rent control law, the local emergency\nhousing rent control act, the emergency tenant protection act of\nnineteen seventy-four, or any local law enacted pursuant thereto, upon\ncompletion of the rehabilitation of any building used primarily for\nresidential purposes, in a jurisdiction in which rents are regulated\npursuant to any of the above laws and which is aided by a loan pursuant\nto this section made by the municipality, the supervising agency shall\nestablish the initial rent for each rental dwelling unit within the\nbuilding. All dwelling units within the building subsequent to\nestablishment of initial rents by the supervising agency shall be\nsubject to either the rent stabilization law of nineteen hundred\nsixty-nine or the emergency tenant protection act of nineteen\nseventy-four, or both, if applicable to the loca
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