§ 111 — Mortgages and mortgage bonds

§ 111. Mortgages and mortgage bonds. Any redevelopment company,\nsubject to the approval of the supervising agency, may borrow funds and\nsecure the repayment thereof by bond and mortgage or by an issue of\nbonds under a trust indenture. Each mortgage or issue of bonds of a\nredevelopment company shall relate only to a single specified project\nand to no other and such bonds shall be secured by mortgage upon all of\nthe real property of which such project consists.\n First lien bonds of such redevelopment company when secured by a\nmortgage not exceeding ninety per centum of the estimated cost prior to\nthe completion of the project, and in no event exceeding ninety per\ncentum of the actual cost upon such completion, as certified by the\nsupervising agency, or, in the case of a completed project, not\nexceeding ninety per centum of the appraised value or such previously\ncertified actual cost, whichever is less, are hereby declared securities\nin which all public officers and bodies of the state and of its\nmunicipal subdivisions, all insurance companies and associations, all\nsavings banks and savings institutions, including savings and loan\nassociations, executors, administrators, guardians, trustees and all\nother fiduciaries in the state may properly and legally invest the funds\nwithin their control.\n First lien bonds of such a redevelopment company issued under a trust\nindenture and pursuant to a building loan contract, or a building loan\nbond and building loan mortgage under which advances are made pursuant\nto a building loan contract, where the aggregate principal amount to be\nissued or advanced does not exceed ninety per centum of the estimated\ncost prior to the completion of the project, and in any event does not\nexceed ninety per centum of the actual cost upon such completion, as\ncertified by the supervising agency, are hereby declared securities in\nwhich all banks, savings banks, savings institutions and trust companies\nin addition to all such officers, bodies, companies, associations,\ninstitutions and fiduciaries may properly and legally invest the funds\nwithin their control; provided, however, that such investment is made as\na construction loan with a maturity of not to exceed two years. The\nmaturity of any such construction loan may be extended from time to time\nwith the approval of the board of directors or trustees of the bank,\nsavings banks, savings institutions or trust company holding such loan\nbut no one such extension shall be for a period of time exceeding six\nmonths.\n The bonds so issued and secured and the mortgage or trust indenture\nrelating thereto, may create a first or senior lien and a secondary or\njunior liens upon the real property embraced in any project; provided,\nhowever, that the total mortgage liens shall not exceed ninety per\ncentum of the estimated cost prior to the completion of the project, and\nshall not in any event exceed ninety per centum of the actual cost upon\nsuch completion, or, in the case of a completed project, not exceeding\nninety per centum of the appraised value or such previously certified\nactual cost, whichever is less. Such bonds and mortgages or trust\nindentures may contain such other clauses and provisions as shall be\napproved by the supervising agency, including the right to assignment of\nrents and entry into possession in case of default and including in the\ncase of a redevelopment company which is a partnership or trust the\nright of the partners or trustees, as the case may be, to be free of any\npersonal liability thereunder; but the operation of the housing project\nin the event of such entry by mortgagee or receiver shall be subject to\nregulations promulgated by the supervising agency. Provisions for the\namortization of the bonded indebtedness of companies formed under this\narticle shall be subject to the approval of the supervising agency. So\nlong as funds made available by the federal government or any\ninstrumentality thereof or any mortgage or mortgage bonds, insured by\nthe federal housing administrator or any other instrumentality of the\nfederal government are used in financing, in whole or in part, any\nproject under this article, the capital structure of a redevelopment\ncompany undertaking such project and the proportionate amount of the\ncost of the lands and improvements to be represented by mortgages or\nbonds shall be entirely in the discretion of the supervising agency; and\nall restrictions as to the maturity of any construction loan and as to\nthe amounts to be represented by mortgages, mortgage bonds, income\ndebentures or capital shall be inapplicable to such projects or to\nredevelopment companies undertaking such projects, except that the\nbonds, mortgages, debentures and capital covering any project shall not\nexceed the total actual final cost of such project as defined in\nsubdivision two of section one hundred twelve of this article.\n Interest rates on mortgage indebtedness shall not exceed the greater\nof\n (a) six percentum per annum,\n (b) the rate prescribed by the superintendent of financial services\npursuant to section fourteen-a of the banking law,\n (c) the rates of mortgages or mortgage bonds insured by the federal\nhousing administration or any other instrumentality of the federal\ngovernment and\n (d) such rate as may be approved by the supervising agency provided,\nhowever, that the applicable rate for purposes of paragraphs (b), (c)\nand (d), of this section one hundred eleven shall be the rate applicable\nor approved at the time the redevelopment company incurs the mortgage\nindebtedness.\n As used in this section the term "bond" includes a note heretofore or\nhereafter made.\n