3. The corporation shall not enter into a contract under this article unless the eligible applicant has submitted an application and such application contains a plan, acceptable to the corporation, which provides for each project:

1. (a) That violations on the project which are classified as hazardous or immediately hazardous shall be repaired in accordance with state and local laws and regulations of state and local agencies and the project shall be brought into compliance with all applicable laws and regulations.
2. (b) For the establishment of occupant selection procedures which provide that any lawful occupants who live in a project prior to rehabilitation shall not be displaced as a result of such rehabilitation, other than temporarily, in which case suitable relocation arrangements shall be provided, and that any additional occupants who move into a project are persons of low income. Preference in selection of such additional occupants; (i) shall be given to persons or families with the lowest incomes possible, given the income requirements of the project and; (ii) shall also be given to persons or families whose current housing fails to meet basic standards of health and safety and who have little prospect of improving the condition of their housing except by residing in a project receiving payments, grants or loans under this article.
3. (c) In the case of a homesteading project that (i) the project may only be transferred or sold to an eligible applicant; and (ii) the resale price of the project shall not exceed an amount equal to the sum of (A) the original equity paid by the owner for the project and rehabilitation or construction thereof, exclusive of any payments, grants or loans received pursuant to this article for such purposes, or from such other sources as determined by the corporation, with interest thereon at the rate of six percent per annum, (B) the cost of capital improvements to the project paid by such owner after the completion of rehabilitation or construction, exclusive of any payments, grants or loans received pursuant to this article for such purposes, or from such other sources as determined by the corporation, with interest thereon at the rate of six percent per annum, (C) the actual amortization paid by such owner in the reduction of total outstanding principal indebtedness on all existing and prior mortgages on, or loans for, such project, but only to the extent that the proceeds of such mortgages or loans were used by the owner for the project and rehabilitation or construction thereof or for the cost of capital improvements thereto, with interest thereon at the rate of six percent per annum, (D) the actual outstanding principal indebtedness on all existing mortgages on, or loans or other obligations for, such project which the owner is required to satisfy, but only to the extent that the proceeds of such mortgages or loans were used by the owner for the project and rehabilitation or construction thereof or for the cost of capital improvements thereto, with interest thereon at the rate of six percent per annum, 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 (E) the reasonable costs and expenses incurred in connection with the sale of such project.
4. (d) In the case of a cooperative project that (i) the shares applicable to a cooperative unit shall be transferred or sold only to an eligible applicant; and (ii) the resale price of shares applicable to a cooperative unit shall not exceed an amount equal to the sum of (A) the original equity paid by the tenant shareholder for such shares and for the rehabilitation or construction of such unit, exclusive of any payments, grants or loans received pursuant to this article for such purposes or from such other sources as determined by the corporation, with interest thereon at the rate of six percent per annum, (B) the cost of capital improvements to such unit paid by such tenant shareholder after the completion of rehabilitation or construction, exclusive of any payments, grants or loans received pursuant to this article for such purposes or from such other sources as determined by the corporation, with interest thereon at the rate of six percent per annum, (C) the pro-rata portion of any capital assessments or capital contributions for building wide improvements paid by such tenant shareholder, with interest thereon at the rate of six percent per annum, (D) the pro-rata portion of actual amortization paid by such tenant shareholder on all existing and prior mortgages on such project in the reduction of total outstanding principal indebtedness, with interest thereon at the rate of six percent per annum, (E) the actual amortization paid by such tenant shareholder in the reduction of total outstanding principal indebtedness on all existing and prior loans for such unit, but only to the extent that the proceeds of such loans were used by the tenant shareholder for the purchase of such shares or for the cost of the rehabilitation or construction of, or capital improvements to, such unit, with interest thereon at the rate of six percent per annum, (F) the actual outstanding principal indebtedness on all existing loans or other obligations for such unit which the tenant shareholder is required to satisfy, but only to the extent that the proceeds of such loans were used by such tenant shareholder for the purchase of such shares or for the cost of the rehabilitation or construction of, or capital improvements 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 (G) the reasonable costs and expenses incurred in connection with the sale of such shares.
5. (e) In the case of a condominium project that (i) a condominium unit shall be transferred or sold only to an eligible applicant; and (ii) the resale price of a condominium unit shall not exceed an amount equal to the sum of (A) the original equity paid by the owner for such unit and the rehabilitation or construction thereof, exclusive of any payments, grants or loans received pursuant to this article for such purposes or from such other sources as determined by the corporation, with interest thereon at the rate of six percent per annum, (B) the cost of capital improvements to such unit paid by such owner after the completion of rehabilitation or construction, exclusive of any payments, grants or loans received pursuant to this article for such purposes or from such other sources as determined by the corporation, with interest thereon at the rate of six percent per annum, (C) the pro-rata portion of any capital assessments or capital contributions for building wide improvements paid by such owner to the project, with interest thereon at the rate of six percent per annum, (D) the actual amortization paid by such owner on all existing and prior mortgages on, or loans for, such unit in the reduction of total outstanding principal indebtedness, but only to the extent that the proceeds of such mortgages or loans were used by such owner for the unit and the rehabilitation or construction thereof or for the cost of capital improvements thereto with interest thereon at the rate of six percent per annum, (E) the actual outstanding principal indebtedness on all existing mortgages on, and loans or other obligations for, such unit which the owner is required to satisfy, but only to the extent that the proceeds of such mortgages or loans were used by such owner for the unit and the rehabilitation or construction thereof or for the cost of capital improvements thereto, provided that if the 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 (F) the reasonable costs and expenses incurred in connection with the sale of such unit.
6. (f) In the case of a rental project that (i) the rental project may only be transferred or sold to an eligible applicant; and (ii) the resale price of the rental project shall not exceed an amount equal to the sum of (A) the original equity paid by the owner for the project and rehabilitation or construction thereof, exclusive of any payments, grants or loans received pursuant to this article for such purposes or from such other sources as determined by the corporation, with interest thereon at the rate of six percent per annum, (B) the cost of capital improvements to the project paid by the owner after the completion of rehabilitation or construction, exclusive of any payments, grants or loans received pursuant to this article for such purposes or from such other sources as determined by the corporation, with interest thereon at the rate of six percent per annum, (C) the actual amortization paid by such owner on all existing and prior mortgages on, or loans for, such project in the reduction of total outstanding principal indebtedness, but only to the extent that the proceeds of such mortgages or loans were used by such owner for the project and rehabilitation thereof or for the cost of capital improvements thereto, with interest thereon at the rate of six percent per annum, (D) the actual outstanding principal indebtedness on all existing mortgages on, or loans or other obligations for, such project which the owner is required to satisfy, but only to the extent that the proceeds of such mortgages or loans were used by the owner for the project and rehabilitation thereof or for the cost of capital improvements thereto, 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 (E) the reasonable costs and expenses incurred in connection with the sale of such project.
7. (g) In the case of a rental project, that the project shall be operated initially as a rental property, and when located in the city of New York shall be subject to the rent stabilization law of nineteen hundred sixty-nine, and when located in a municipality which has elected to be covered by the provisions of the emergency tenant protection act of nineteen seventy-four, be subject to the provisions of such act. Any subsequent conversion to cooperative or condominium ownership during the period in which such property remains subject to the provisions of this article shall only be allowed with the consent of the corporation and if done pursuant to section three hundred fifty-two-eeee or three hundred fifty-two-eee of the general business law shall only be allowed pursuant to a non-eviction plan. The conversion of a rental project to cooperative or condominium ownership shall make the cooperative or condominium subject to the provisions of this article for cooperative or condominium projects for the remaining term which the rental project was to be subject to the provisions of this article.
8. (h) To be located in an area which is blighted, deteriorated or deteriorating, or has a blighting influence on the surrounding area, or is in danger of becoming a slum or a blighted area because of the existence of substandard, insanitary, deteriorating or deteriorated conditions, an aged housing stock, or vacant non-residential property, or other factors indicating an inability or unwillingness of the private sector unaided to cause the rehabilitation, construction or conversion which is contracted for under this article.
9. 3-a. The corporation shall provide the applicant with a list of conditions that must be met prior to entering into a contract pursuant to this article. Within fifteen working days of receipt by the corporation of all documents in satisfaction of the list, the corporation shall notify the applicant of the sufficiency or insufficiency of the documents. After satisfaction by the applicant of all conditions required by the corporation prior to entering into a contract the corporation shall enter into the contract within forty-five working days of satisfaction of such conditions.
10. 4. Notwithstanding the provisions of, or any regulation promulgated pursuant to, the emergency housing rent control law, the local emergency housing rent control act, or local law enacted pursuant thereto, the rent stabilization law of nineteen hundred sixty-nine, or the emergency tenant protection act of nineteen seventy-four, the eligible applicant with the approval of the corporation shall have the power to set the initial rent level of any rental housing accommodation which is located in a rental or homesteading project receiving payments, grants or loans under this article.
11. 5. Any cooperative or condominium or rental project which receives payments, grants or loans pursuant to this article shall be subject to its provisions for a period of twenty years following completion of rehabilitation work, construction or conversion or for the period during which any loan or indebtedness received under this article remains outstanding, whichever is greater provided however that all housing accommodations in rental projects shall continue to be subject to the rent stabilization law of nineteen hundred sixty-nine or the emergency tenant protection act of nineteen seventy-four, as provided in paragraph (g) of subdivision three of this section as the case may be, for the period specified in this subdivision and thereafter the applicability of such laws shall terminate as to each accommodation upon the first vacancy which occurs in each accommodation.
12. 6. Any homesteading project which receives payments, grants or loans under this article shall be subject to its provisions for a period of fifteen years following completion of rehabilitation work, construction or conversion, or for the period during which any loan or indebtedness received under this article remains outstanding, whichever is greater.

13. 6-a. Notwithstanding any provisions of subdivisions five and six of this section to the contrary, in the case of projects subject to a mortgage made by any lender:

    1. (a) such lender, if not the corporation, shall give the corporation notice when an owner has defaulted on any payment of principal or interest on such mortgage loan for a project for a consecutive period of sixty days.
    2. (b) following receipt of such notice, or at such earlier time as the corporation deems appropriate, the corporation shall seek to cure such default and make the project economically viable by assisting the owner in entering into a mortgage modification agreement with the lender, finding a new eligible applicant to own the project and assume the obligations under the mortgage or taking such other actions, consistent with the provisions of this article, as the corporation deems appropriate.
    3. (c) notwithstanding the provisions of paragraphs (a) and (b) of this subdivision, with respect to any lender other than the corporation, the corporation may provide in agreements respecting any project that where a lender shall have foreclosed or obtained title to a project in accordance with law and the provisions of its mortgage, the project or particular residential units therein shall not be subject to one or more provisions of this article, other than the rent stabilization coverage provisions of paragraph (g) of subdivision three of this section. Any agreement pursuant to this paragraph shall only be made upon a finding by the corporation that such agreement is necessary in order to enable a project owner to obtain a mortgage loan from a lender other than the corporation.
14. 7. The corporation shall provide for the review, at periodic intervals at least annually, of the performance of eligible applicants under contract pursuant to this article. Such review shall, among other things, be for the purposes of ascertaining conformity to contractual provisions, the financial integrity and efficiency of eligible applicants and the evaluation of the project. Contracts entered into pursuant to this article may be terminated, funds may be withheld and unspent funds may be recaptured by the corporation upon a finding of substantial nonperformance or breach by the eligible applicant of its obligations under its contract.
15. 8. Within each of the three categories of projects (cooperative or condominium, rental, or homesteading), preference in the awarding of contracts shall be given to economically feasible projects which contain a substantial number of persons of low income whose income does not exceed fifty percent of the median income for the metropolitan statistical area in which the project is located, or if the project is located outside such an area, to projects which contain a substantial number of persons of low income whose incomes do not exceed fifty percent of the median income for the county in which the project is located, additional preference shall be given to economically feasible projects located on a brownfield site that has received a certificate of completion.