(a) Capital costs (referred to as “project costs” in section 75.05 of the Mental Hygiene Law) eligible for a HFA mortgage loan may only include costs incurred by the applicant pursuant to article 75 of the Mental Hygiene Law relating to:

1. (1) refinancing of existing indebtedness associated with the development of the project which constitutes a lien or other encumbrance upon the real property or assets of a company to be mortgaged or otherwise pledged to the agency;
2. (2) carrying charges during construction up to and including the occupancy date;
3. (3) working capital not exceeding three percent of the estimated total project cost or three percent of the actual total final project costs, whichever is larger;
4. (4) studies, surveys, plans and specifications;
5. (5) architectural engineering, legal or other special services;
6. (6) acquisition of land and any improvements thereon;
7. (7) site preparation and development;
8. (8) construction, reconstruction, rehabilitation and improvement;
9. (9) equipment, including fixtures and articles of personal property required for the operation of the facility;
10. (10) the reasonable cost of financing during the course of the development of the project up to and including the occupancy date;
11. (11) the fees imposed by the commissioner and the New York State Housing Finance Agency and other fees and necessary expenses incurred in connection with the initial occupancy of the project; and
12. (12) such other items as the commissioner may determine to be reasonable and necessary for the development of the project.

(b) The foregoing costs shall be reduced by:

1. (1) any and all rents and other net revenues from the operation of the real property, improvements or personal property on the site of the facility; and
2. (2) any portion of any State, Federal or municipal assistance grant which the commissioner, prior to the making of a mortgage loan, shall determine to be available to the applicant to meet the project costs prior to the initial occupancy of the project.