N.Y. UDR Law § 16 — New York Code / Act UDR / Section 16
Reserve funds
Status: in_force

§ 16. Reserve funds. (1) The corporation may create and establish one\nor more reserve funds to be known as debt service reserve funds and may\npay into such reserve funds (a) any proceeds of sale of bonds and notes\nto the extent provided in the resolution of the corporation authorizing\nthe issuance thereof, and (b) any other moneys which may be made\navailable to the corporation for the purposes of such funds from any\nother source or sources. The moneys held in or credited to any debt\nservice reserve fund established under this subdivision, except as\nhereinafter provided, shall be used solely for the payment of the\nprincipal of bonds of the corporation secured by such reserve fund, as\nthe same mature, the purchase of such bonds of the corporation, the\npayment of interest on such bonds of the corporation or the payment of\nany redemption premium required to be paid when such bonds are redeemed\nprior to maturity; provided, however, that moneys in any such fund shall\nnot be withdrawn therefrom at any time in such amount as would reduce\nthe amount of such fund to less than the maximum amount of principal and\ninterest maturing and becoming due in any succeeding calendar year on\nthe bonds of the corporation then outstanding and secured by such\nreserve fund, except for the purpose of paying principal and interest on\nthe bonds of the corporation secured by such reserve fund maturing and\nbecoming due and for the payment of which other moneys of the\ncorporation are not available. Any income or interest earned by, or\nincrement to, any such debt service reserve fund due to the investment\nthereof may be transferred to any other fund or account of the\ncorporation to the extent it does not reduce the amount of such debt\nservice reserve fund below the maximum amount of principal and interest\nmaturing and becoming due in any succeeding calendar year on all bonds\nof the corporation then outstanding and secured by such reserve fund.\n  (2) The corporation shall not issue bonds at any time if the maximum\namount of principal and interest maturing and becoming due in a\nsucceeding calendar year on the bonds outstanding and then to be issued\nand secured by a debt service reserve fund will exceed the amount of\nsuch reserve fund at the time of issuance, unless the corporation, at\nthe time of issuance of such bonds, shall deposit in such reserve fund\nfrom the proceeds of the bonds so to be issued, or otherwise, an amount\nwhich together with the amount then in such reserve fund, will be not\nless than the maximum amount of principal and interest maturing and\nbecoming due in any succeeding calendar year on the bonds then to be\nissued and on all other bonds of the corporation then outstanding and\nsecured by such reserve fund.\n  (3) In computing any debt service reserve fund for the purposes of\nthis section, securities in which all or a portion of such reserve fund\nshall be invested shall be valued at the lower of cost or market value.\n  (4) With respect to any project, the corporation may create and\nestablish a special fund to be known as the project reserve fund and\ndeposit therein (a) such amount as may be determined by the corporation\nin connection with any lease by the corporation to others to be charged\nto such lessee for deposit in such fund, and (b) any other moneys which\nmay be made available to the corporation for the purpose of such fund\nfrom any other source or sources. All moneys held in or credited to any\nproject reserve fund shall be first used for the payment of the\nprincipal of and interest on the bonds or notes of the corporation\nissued for the project secured by such project reserve fund in the event\nthat other moneys of the corporation, other than moneys held in the debt\nservice fund, are not available for such purpose. Upon the retirement of\nthe bonds or notes of the corporation issued for the project secured by\nsuch project reserve fund, moneys so held in such fund may be used by\nthe corporation for any lawful purpose.\n