NY S01685

Establishes the Small Rental Housing Development Initiative to provide state funding for affordable rental housing developments of 20 units or less in rural areas with populations of 30,000 or less.

Provides eligible applicants (non-profit housing agencies) with zero percent interest deferred loans due on sale, with repayment periods of 10-20 years chosen by the applicant.

Allows loans to be forgiven if the eligible applicant remains in full compliance with program requirements throughout the affordability period, with the mortgage lien then satisfied.

Requires rental management requirements and rent-setting regulations to run with the property for the entire affordability period regardless of ownership changes, and mandates written notice to rejected applicants explaining funding denial reasons.

Authorizes the Division of Housing and Community Renewal to conduct annual performance reviews and terminate agreements or recapture funds for substantial nonperformance or breach by applicants.