NY Priv Hous Fin L § 23-B (2021)
2021 New York Laws PVH - Private Housing Finance Article 2 - Limited-Profit Housing Companies 23-B - Participation in Loan or Investment.

§ 23-b. Participation in loan or investment. Notwithstanding any other   provisions  of  this  article  or  of any general, special or local law,   where a municipality has made or contracted to make a mortgage loan to a   company to finance a project:  one  or  more  banking  organizations  as   defined  in  subdivision  eleven  of  section  two  of  the banking law,   educational  institutions,  hospitals,  medical   research   institutes,   insurance  companies,  trustees  or  fiduciaries,  including fiduciaries   holding funds for investment, the  New  York  city  housing  development   corporation,   other   public  corporations,  or  other  entities  which   purchase, invest, or deal in first mortgage loans in the  normal  course   of  their  business, or any combination of the foregoing, shall have the   power to participate in such loan or make or participate in a  new  loan   secured  by  a  bond  or note and a single participating mortgage, or by   separate bonds or notes and separate mortgages, or to invest, singly  or   jointly,   with   the   municipality  in  a  bond  or  note  and  single   participating mortgage or in separate bonds or notes and mortgages or in   a new mortgage or mortgages with respect to all or a portion of the loan   by a municipality to a company; and the supervising  agency  shall  have   the  power,  upon  the  mortgagor's  consent,  to  modify  the terms and   conditions of the original bond or bonds or note or notes  and  mortgage   or  mortgages  and  any other documents executed in connection with such   original loan, as the supervising agency may deem necessary or desirable   to provide for such participation, new loan or investment as provided in   this section, including but not limited to (i) modification of the  rate   and time of payment of interest on the original loan or rate and time of   amortization  of  principal  thereof,  (ii)  providing  for priority for   payment of the principal of and interest on that portion of the mortgage   indebtedness attributable to such participation, new loan or  investment   by one or more of such entities or organizations, (iii) subordination of   the  interest of the municipality to the interest of one or more of such   organizations or entities in such participation, new loan or investment,   and (iv) otherwise  providing  that  the  interest  of  each  upon  such   participation,  new  loan or investment need not be of equal priority as   to lien, or be equal as to interest rate, time or rate  of  amortization   of  principal  or  time  of  payment of interest or otherwise; provided,   however, that the aggregate amount of the loan or  loans  to  a  company   does  not  exceed the amount authorized pursuant to section twenty-three   of this  article.  When  consent  of  a  company  is  required  for  any   participation,  new loan or investment pursuant to this section and such   participation, new loan or investment will be  substantially  equivalent   to  a  refinancing of indebtedness pursuant to section twenty-three-a or   subdivision twenty-two-a of  section  six  hundred  fifty-four  of  this   chapter,  then;  (i)  the  provisions of this article, including without   limitation the provisions  of  section  twenty-three-a,  limiting  total   indebtedness  of  a  company  after  a  refinancing shall apply to total   indebtedness of the  company  after  such  participation,  new  loan  or   investment; (ii) the provisions of this article applicable to a mortgage   of  a  company insured by the federal government in connection with such   refinancing shall apply to a mortgage securing the interest of  entities   or  organizations other than the municipality in such participation, new   loan or investment; (iii) the  provisions  of  this  article  concerning   residual indebtedness, such residual indebtedness having been calculated   as  if  the  mortgage referred to in clause (ii) of this sentence were a   federally  insured  mortgage,  shall  apply  to  an  interest   of   the   municipality  after  such participation, new loan or investment which is   secured by a mortgage; (iv) the provisions of  this  article  concerning   residual  receipts  obligations  shall  apply  to  an  interest  of  the   municipality after such participation, new loan or investment  which  is    unsecured,  and  (v)  the  provisions  of  subdivision four-b of section   twenty-three-a of this article concerning the credit referred to therein   shall apply in a manner consistent with such subdivision.  For  purposes   of  the  foregoing  sentence  of  this  section,  the  term surplus cash   (referred to in subdivision seven  of  section  twenty-three-a  of  this   article)  shall  be  applied  by  the  supervising  agency  in  a manner   consistent with the definition of such  term  in  regulatory  agreements   with  the  federal  government  for  the  refinancing of indebtedness of   municipally-aided projects.  The provisions of subdivisions one and five   of  section  twenty-six  of  this  article  shall  not  apply  to   such   participation  in  a  loan  or  investment  pursuant  to this section if   undertaken in connection with a project theretofore approved pursuant to   section twenty-six of this article. Where the  municipality  shall  join   with  one  or  more  organizations of the kind hereinabove mentioned, in   making a loan secured by a single participating mortgage or by  separate   mortgages,  the  municipality  is  authorized,  through  its supervising   agency, to make provision, either in the mortgage  or  mortgages  or  by   separate  agreement,  for  the  performance  of  such  services  as  are   generally performed by a banking institution or insurance company  which   itself owns and holds a mortgage or by a trustee under a trust mortgage.   The  supervising  agency  is  hereby  authorized to act as trustee or to   consent to the appointment of a  banking  institution  to  act  in  such   capacity.   In connection with any participation in a loan or investment   pursuant to this  section,  the  municipality  through  its  supervising   agency shall have the power to assign or pledge, in whole or in part, to   one  or more of the organizations or entities participating in such loan   or investment its right, title and interest in and to any mortgage  held   by  it  pursuant to this article and any contract or arrangement for the   payment of subsidy relating to such mortgage,  including  the  right  to   receive and apply to repayment of such loan and the interest thereon any   receipts to be derived by it from such mortgage or from such contract or   arrangement.