(a) It is the policy of the State of New York to seek the establishment of a system of community mental health services for the mentally ill. Towards this end, the commissioner and the Office of Mental Health wish to encourage voluntary agencies and local governments to acquire the facilities to provide these services. In accordance with this policy and these desires, the Legislature has authorized the commissioner to reimburse up to 50 percent of eligible capital costs incurred in the development of such facilities.

(b) The purpose of this Part is to set forth the requirements, conditions and regulations regarding the granting of a State aid grant from the Office of Mental Health, pursuant to article 41 of the Mental Hygiene Law, and/or a Housing Finance Agency mortgage loan, pursuant to article 75 of the Mental Hygiene Law, for the funding of up to 50 percent of the eligible capital costs associated with the development of community mental health facilities or a Facilities Development Corporation mortgage loan pursuant to section five of the Facilities Development Corporation Act, for up to 100 percent of the eligible capital costs associated with the development of such community mental health facilities.

(c) A further purpose is to set forth the conditions and requirements for such development and facility operation, as well as to provide for the security of the interest of the OMH in the facilities so funded.