§ 81 — Mortgages and mortgage bonds

§ 81. Mortgages and mortgage bonds. 1. (a) Any housing company formed\nunder this article may, subject to the approval of the commissioner,\nborrow funds and secure the repayment thereof by bond or note and\nmortgage or by an issue of bonds under trust indenture. Each mortgage or\nissue of bonds by a housing company formed hereunder shall relate only\nto a single specified project and no other and said bonds shall be\nsecured by mortgage upon all of the real property of which said project\nconsists.\n (b) First lien bonds or notes of such housing company when secured by\na mortgage not exceeding four-fifths of the estimated cost prior to the\ncompletion of the project, or four-fifths of the appraised value or\nactual cost, whichever shall be less, after such completion, as\ncertified by the commissioner, are hereby declared securities in which\nall public officers and bodies of the state and of the municipal\nsubdivisions, all insurance companies and associations, and all savings\nbanks and savings institutions, including savings and loan associations,\nin the state may properly and legally invest the funds within their\ncontrol.\n 2. The bonds and notes so issued and secured and the mortgage or trust\nindentures relating thereto, may create a first or senior lien and a\nsecond or junior lien upon the real property embraced in any project;\nprovided, however, that the total mortgage liens shall not exceed eighty\nper centum of the estimated cost prior to the completion of the project,\nor eighty per centum of the appraised value or actual cost, whichever\nshall be less, as certified by the commissioner after such completion.\nWhere there is a first and a second mortgage lien upon the property\nembraced in a project, only the first or senior lien thereon shall be\ndeemed a security in which such officers, bodies, corporations and\nassociations may invest the funds within their control. Such bonds and\nmortgages, notes and mortgages or trust indentures may contain such\nother clauses and provisions as shall be approved by the commissioner,\nincluding the right to assignment of rents and entry into possession in\ncase of default and including in the case of a housing company which is\na partnership or trust the right of the partners or trustees, as the\ncase may be, to be free of any personal liability thereunder; but the\noperation of the housing project in the event of such entry by mortgagee\nor receiver shall be subject to the regulations of the commissioner\nunder this article. Provisions for the amortization of the bonded\nindebtedness or notes of indebtedness of companies formed under this\narticle shall be subject to the approval of the commissioner.\n 3. (a) So long as funds made available by the federal government or\nany instrumentality thereof or any mortgage, mortgage bonds or notes\nguaranteed or insured by the federal government or any instrumentality\nthereof, or any mortgage or mortgage bonds or notes secured by\nobligations so guaranteed or insured, or tax exempt obligations issued\npursuant to section eleven of the United States housing act of nineteen\nhundred thirty-seven, are used in financing, in whole or in part, any\nproject under this article, the capital structure of a housing company\nundertaking such project and the proportionate amount of the cost of the\nlands and improvements to be represented by mortgages, bonds or notes\nshall be entirely in the discretion of the commissioner; and all\nrestrictions as to the amounts to be represented by mortgages, mortgage\nbonds, mortgage notes, income debentures or shares shall be inapplicable\nto such projects or to housing companies undertaking such projects,\nexcept that the bonds, notes, mortgages, debentures and shares covering\nany project shall not exceed the actual final cost of such project, as\ndefined in this article.\n (b) Notwithstanding anything contained in paragraph (b) of subdivision\none of this section, first lien bonds or other obligations of housing\ncompanies, secured by a first mortgage upon all of the real property of\na project and not exceeding the estimated cost prior to the completion\nof the project, or the appraised value or actual cost, whichever shall\nbe less, after such completion, as certified by the commissioner, are\nhereby declared securities in which all public officers and bodies of\nthe state and of the municipal subdivisions, all insurance companies and\nassociations, and all savings banks and savings institutions, including\nsavings and loan associations, in the state may properly and legally\ninvest the funds within their control, provided that\n (1) the federal housing commissioner has insured, or has made a\ncommitment to insure, such mortgage; or\n (2) such bonds or other obligations are guaranteed or insured to at\nleast forty per centum of the principal amount thereof under title three\nof an act of congress of the United States entitled the "Servicemen's\nReadjustment Act of 1944," or are secured by obligations so guaranteed\nor insured; or\n (3) such bonds or other obligations evidence a loan for the purpose of\nfinancing construction and are to be guaranteed or insured under said\ntitle three, as hereinabove provided, upon completion of such\nconstruction, and all funds advanced on such loan are guaranteed or\ninsured under said title three to the extent of at least thirty per\ncentum of such advance, or are secured by obligations so guaranteed or\ninsured.\n * 4. So long as funds made available by the New York state urban\ndevelopment corporation, pursuant to the New York state urban\ndevelopment corporation act, are used in financing, in whole or in part,\nany project under this article, all restrictions as to the amounts to be\nrepresented by mortgages, mortgage bonds, mortgage notes, income\ndebentures or capital shall be inapplicable to such projects or to\nhousing companies undertaking such projects, provided however that any\nmortgage loan from the New York state urban development corporation to\nhousing companies undertaking such projects shall not exceed ninety-five\nper centum of project cost, as certified by the commissioner.\n* NB (Effective until ruling by Internal Revenue Service)\n * 4. So long as funds made available by the New York state urban\ndevelopment corporation or the New York state housing finance agency,\npursuant to the New York state urban development corporation act or the\nNew York state housing finance agency act, as the case may be, are used\nin financing, in whole or in part, any project under this article, all\nrestrictions as to the amounts to be represented by mortgages, mortgage\nbonds, mortgage notes, income debentures or capital shall be\ninapplicable to such projects or to housing companies undertaking such\nprojects, provided however that any mortgage loan from the New York\nstate urban development corporation or the New York state housing\nfinance agency, as the case may be, to housing companies undertaking\nsuch projects shall not exceed ninety-five per centum of project cost,\nas certified by the commissioner.\n* NB (Effective pending ruling by Internal Revenue Service)\n 5. The capital structure of a housing company acquiring a project from\na company organized pursuant to article eleven of this chapter may be\nfixed by the commissioner, notwithstanding any limitations in this\narticle as to the amount to be represented by mortgages, debentures or\ncapital.\n