§ 22 — State loans

§ 22. State loans. 1. The commissioner may enter into contracts for\nloans to a company. All such contracts shall be subject to approval by\nthe state comptroller and by the attorney general as to form.\n 2. Loans by the state under such a contract shall be secured by a\nfirst mortgage lien, and no such loan shall be made in an amount greater\nthan ninety-five per centum of the total project cost in the case of a\nmutual company, urban rental company or a non-profit company\nincorporated pursuant to the provisions of the not-for-profit\ncorporation law and this article for the purpose of providing housing\nfor staff members, employees or students of a college, university,\nhospital or child care institution and their immediate families and in\nthe case of a non-profit company incorporated pursuant to the\nnot-for-profit corporation law and this article for the purpose of\nproviding housing for aged or handicapped persons of low income or in\nthe case of a low income non-profit housing company such loans shall not\nbe made in an amount greater than the total project cost. In case of a\nloan in an amount greater than ninety-five per centum of the total\nproject cost, the commissioner may in his discretion require\nsatisfactory independent guarantees that the loan will be repaid\naccording to the terms of the company's bond or note and mortgage.\nNotwithstanding any other provisions of law, if the company proposes to\nsell or convey any part or parts of the mortgaged premises prior to the\nsale by the state of the definitive bonds providing the funds for the\nstate loan, the comptroller, upon the application of the company and\nwith the prior written consent of the commissioner, may release from the\nfirst mortgage lien any part or parts of the mortgaged premises not\nacquired through condemnation and not required for the project, provided\nthat any net proceeds from the sale or conveyance of the said property\nwill be held by the company for the sole purpose of reducing, in\naccordance with the requirements of the commissioner and comptroller,\nthe principal amount of the state loan outstanding, and provided further\nthat the unpaid principal amount of the state loan then outstanding, as\nit may be reduced by the net proceeds, if any, derived from the sale or\nconveyance, would not be in an amount greater than ninety-five per\ncentum of the total project cost and in the case of a non-profit company\nincorporated pursuant to the provisions of the not-for-profit\ncorporation law and this article for the purpose of providing housing\nfor aged or handicapped persons of low income or in the case of a low\nincome non-profit housing company such amount shall not be greater than\nthe total project cost. The comptroller shall execute such release in\nthe usual form, which, when acknowledged, shall be recorded by the\ncounty clerk and a minute thereof made upon a margin of the mortgage. A\ncompany may, with the prior written consent of the commissioner, and\nsubject to the approval of the state comptroller and to the provisions\nof any contract with noteholders and bondholders, lease any property not\nacquired through condemnation and not required for the project, and may\napply the income of such lease to any use authorized for any other\nrental income. Such lease shall contain restrictions to protect and\npreserve the project.\n 3. The commissioner may make temporary loans or advances to a company\nin anticipation of any permanent loans and no such temporary loans or\nadvances shall be deemed to constitute part of such permanent loans\nunless such temporary loans or advances have been made out of the\nproceeds of definitive housing bonds sold by the state pursuant to\nchapters four hundred seven of the laws of nineteen hundred fifty-five\nand nine hundred fifty-six of the laws of nineteen hundred fifty-eight.\n 4. The state shall have the power to invest jointly with the New York\nstate housing finance agency in a bond or note and single participating\nmortgage, or in separate bonds or notes and mortgages of a company\norganized pursuant to the provisions of this article. The interest of\neach shall have equal priority as to lien in proportion to the amount of\nloan so secured, but need not be equal as to interest rate, time or rate\nof amortization or otherwise. In such a case the state, through the\ncommissioner of housing, is authorized to make provision, either in the\nmortgage or mortgages or by separate agreement, for the performance of\nsuch services as are generally performed by the New York state housing\nfinance agency itself owning and holding a mortgage. Any agreement made\nby the commissioner under this subdivision shall be subject to the\napproval of the state comptroller and the attorney general as to form.\n