2023 New York Laws › PVH - Private Housing Finance › Article 2 - Limited-Profit Housing Companies › 15 - Participation by Certain Corporations and Individuals.

§  15.  Participation  by certain corporations and individuals. 1. (a)
One or more banking organizations, foundations, labor unions, employers'
associations,   veterans'   organizations,    colleges,    universities,
educational  institutions,  child  care institutions, hospitals, medical
research institutes, insurance companies, trustees, fiduciaries  or  any
combination of the foregoing, shall have the power to organize a company
pursuant  to the provisions of this article, and to purchase for cash or
to receive and hold in exchange for property, and to own the bonds of  a
company  and  to  invest,  singly  or  jointly,  or  with the state or a
municipality or the New York state housing finance  agency  or  the  New
York  city  housing development corporation in a bond or note and single
participating mortgage, or in separate bonds or notes and mortgages,  in
an  amount  not greater than ninety-five per centum of the total project
cost in the case  of  a  mutual  company,  urban  rental  company  or  a
non-profit  company  incorporated  pursuant  to  the  provisions  of the
not-for-profit corporation law and  this  article  for  the  purpose  of
providing housing for staff members, employees or students of a college,
university,  child  care  institution,  or  hospital and their immediate
families and in the case of a non-profit company  incorporated  pursuant
to  the  not-for-profit corporation law and this article for the purpose
of providing housing for aged persons of low income or in the case of  a
low  income  non-profit  housing  company  such  investment shall not be
greater  than  the  total  project  cost.  Where  one  or  more  banking
organizations,   foundations,  labor  unions,  employers'  associations,
veterans'    organizations,    colleges,    universities,    educational
institutions,  child  care  institutions,  hospitals,  medical  research
institutes, insurance companies, trustees, fiduciaries, or the state  or
a  municipality  or the New York state housing finance agency or the New
York city housing development corporation, shall participate in  a  loan
to  a  company secured by a single participating mortgage or by separate
mortgages, the interest of each shall have equal priority as to lien  in
proportion to the amount of loan so secured, but need not be equal as to
interest  rate,  time  or  rate  of  amortization  or otherwise. Banking
organizations,  foundations,  labor  unions,  employers'   associations,
veterans'    organizations,    colleges,    universities,    educational
institutions,  child  care  institutions,  hospitals,  medical  research
institutes,   insurance   companies,  trustees,  fiduciaries  or  groups
thereof, may exercise any such power on such conditions, however, as  to
banking  organizations  and as to insurance companies only to the extent
and  upon  such  conditions  as  may  be   authorized   by   the   state
superintendent  of  financial services. As used in this subdivision, the
terms "trustees"  and  "fiduciaries"  shall  include  any  fiduciary  or
fiduciaries   holding  funds  for  investment,  and  the  term  "banking
organizations" shall have the same meaning as in subdivision  eleven  of
section two of the banking law.
(b)   Notwithstanding   the   provisions  of  paragraph  (a)  of  this
subdivision or of any general, special or local law, for the purpose  of
completing   the  financing  of  project  cost,  in  the  event  that  a
municipality has made or contracted to make a loan to a company or to  a
public benefit corporation to provide moneys to finance the project cost
of  a  project (1) the construction of which commenced prior to December
first, nineteen hundred seventy-five,  (2)  for  which  a  temporary  or
permanent  certificate  of  occupancy  was  not  issued prior to January
first, nineteen hundred seventy-three, and (3) which is  assisted  by  a
contract  with  the  secretary  of  housing and urban development of the
United States pursuant to section two hundred thirty-six of the national
housing act, as amended, covering all dwelling  units  therein,  one  or
more   banking  organizations  as  defined  in  paragraph  (a)  of  this

subdivision,  foundations,  labor  unions,  credit  unions,   employers'
associations,    veterans'    organizations,   colleges,   universities,
educational institutions, child care  institutions,  hospitals,  medical
research  institutes,  insurance  companies,  trustees or fiduciaries as
defined in paragraph (a) of this subdivision, trustees  of  pension  and
retirement  funds  and systems, corporations, partnerships, individuals,
or other entities 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, upon
such  terms and conditions as may be approved by the supervising agency,
including but not limited to provisions providing that (i) priority  may
be given to the payment of the principal of and interest on that portion
of  the mortgage indebtedness attributable to participation in a loan or
an investment made by one or more of  such  entities  or  organizations,
(ii)  the  interest  of the municipality created as a result of making a
mortgage loan may be subordinated to the interest that one  or  more  of
such  organizations  or  entities  may  have  upon such participation or
investment, (iii) the  interest  of  each  upon  such  participation  or
investment  need not be of equal priority as to lien, nor 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 or investment made by one or more of such
organizations or entities shall not exceed thirty per  centum  of  total
project cost and, further provided that the aggregate amount of the loan
or  loans  to  a  company  does  not exceed such amount as is authorized
pursuant to paragraph (a) of  this  subdivision.  All  or  part  of  the
proceeds  of such participation or investment pursuant to this paragraph
(b)  may  be  applied  to  reduce  or  prepay  the  loan  made  by   the
municipality.  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  paragraph (b) if undertaken in
connection with a project theretofore approved pursuant to said  section
twenty-six.
Notwithstanding  the  provisions  of  this  article or of any general,
special or local law, in the event that a municipality has made  a  loan
pursuant  to  this  article  prior to any participation pursuant to this
paragraph, 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  and  any  other  documents
executed in connection with such initial loan, as the supervising agency
may  deem  necessary  or  desirable,  to provide for such participation,
including but not limited to  modification  of  the  rate  and  time  of
payment  of  the interest on the initial loan or rate of amortization of
principal thereof, and provision for the additional borrowing  cost,  if
any,   with  respect  to  that  portion  of  the  mortgage  indebtedness
attributable to such participation, provided, that except to the  extent
of any increase in the maximum principal amount of the original mortgage
loan,  with  regard  to  a  company  that  has  obtained  a temporary or
permanent certificate of occupancy for part or all of a project financed
by a loan pursuant to this article before such participation in  a  loan
or investment is made, the sum of the payments of interest and principal
on  the mortgage loan or loans which the company is obligated to make in
any year as a result of such modification and participation in a loan or
investment made pursuant to this paragraph, shall not exceed the sum  of
the payments of interest and principal that such company would have been

obligated  to  make  in  such  year  under  the  original  mortgage loan
agreement if the project had been  fully  financed  under  the  original
mortgage loan agreement by the municipality at an interest rate equal to
the maximum rate per annum prescribed by the superintendent of financial
services  pursuant  to  section  fourteen-a  of  the  banking  law as of
December nineteenth, nineteen hundred seventy-five, or such higher  rate
of  interest  as  the  secretary of housing and urban development of the
United States shall approve pursuant to an agreement  to  make  interest
reduction  payments  pursuant  to  section two hundred thirty-six of the
national housing act, as amended, with respect to such project and  that
the  rental  or carrying charges in such projects shall not be increased
as a result of such participation in a loan or  investment  and  further
provided,   that   the  company  shall  not  seek  or  accept  from  the
municipality any subsidy, direct or  indirect,  excluding  existing  tax
exemption, to offset any increased borrowing costs, if any.
(c)  Where  the  state  or  a 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
state  or  a  municipality  is  authorized,  through the commissioner of
housing, or the  supervising  agency,  as  the  case  may  be,  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 commissioner and
the supervising agency are hereby authorized to act  as  trustee  or  to
consent  to  the  appointment  of  a  banking institution to act in such
capacity. Any agreement made by the commissioner  under  this  provision
shall  be  subject  to  the  approval  by  the state comptroller and the
attorney general as to form.
(d) In connection with any  participation  in  a  loan  or  investment
pursuant  to  paragraph  (b)  of this subdivision the municipality 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 its right,
title and interest in and to any mortgage held pursuant to this  article
and  any contract or arrangement for the payment of subsidy with respect
to such loan and the right to receive and apply  to  repayment  of  such
loan  and  the interest thereon any payments made under such mortgage or
under such contract or arrangement.
2. Notwithstanding any other provision of law, any banking institution
or insurance company or a group thereof operating a company,  or  owning
all  of  the bonds of a company may exercise all the powers conferred by
this section and may enter into contracts contemplated by  this  article
and  agree  with  the  commissioner  not  to  sell, assign, or otherwise
transfer such project or bonds or bond and mortgage or interest  therein
of  such  company  provided  for  pursuant  to  this article without the
consent of the commissioner.