2023 New York Laws › PVH - Private Housing Finance › Article 5 - Redevelopment Companies › 111 - Mortgages and Mortgage Bonds.

§  111.  Mortgages  and  mortgage  bonds.  Any  redevelopment company,
subject to the approval of the supervising agency, may borrow funds  and
secure  the  repayment  thereof  by  bond and mortgage or by an issue of
bonds under a trust indenture. Each mortgage or  issue  of  bonds  of  a
redevelopment  company  shall  relate only to a single specified project
and to no other and such bonds shall be secured by mortgage upon all  of
the real property of which such project consists.
First  lien  bonds  of  such  redevelopment  company when secured by a
mortgage not exceeding ninety per centum of the estimated cost prior  to
the  completion  of  the  project,  and in no event exceeding ninety per
centum of the actual cost upon such  completion,  as  certified  by  the
supervising  agency,  or,  in  the  case  of  a  completed  project, not
exceeding ninety per centum of the appraised value  or  such  previously
certified actual cost, whichever is less, are hereby declared securities
in  which  all  public  officers  and  bodies  of  the  state and of its
municipal subdivisions, all insurance companies  and  associations,  all
savings  banks  and  savings  institutions,  including  savings and loan
associations, executors, administrators,  guardians,  trustees  and  all
other fiduciaries in the state may properly and legally invest the funds
within their control.
First  lien bonds of such a redevelopment company issued under a trust
indenture and pursuant to a building loan contract, or a  building  loan
bond  and  building loan mortgage under which advances are made pursuant
to a building loan contract, where the aggregate principal amount to  be
issued  or  advanced  does not exceed ninety per centum of the estimated
cost prior to the completion of the project, and in any event  does  not
exceed  ninety  per  centum  of the actual cost upon such completion, as
certified by the supervising agency, are hereby declared  securities  in
which all banks, savings banks, savings institutions and trust companies
in  addition  to  all  such  officers,  bodies, companies, associations,
institutions and fiduciaries may properly and legally invest  the  funds
within their control; provided, however, that such investment is made as
a  construction  loan  with  a  maturity of not to exceed two years. The
maturity of any such construction loan may be extended from time to time
with the approval of the board of directors or  trustees  of  the  bank,
savings  banks,  savings institutions or trust company holding such loan
but no one such extension shall be for a period of  time  exceeding  six
months.
The  bonds  so  issued and secured and the mortgage or trust indenture
relating thereto, may create a first or senior lien and a  secondary  or
junior  liens  upon the real property embraced in any project; provided,
however, that the total mortgage  liens  shall  not  exceed  ninety  per
centum of the estimated cost prior to the completion of the project, and
shall  not in any event exceed ninety per centum of the actual cost upon
such completion, or, in the case of a completed project,  not  exceeding
ninety  per  centum  of the appraised value or such previously certified
actual cost, whichever is  less.  Such  bonds  and  mortgages  or  trust
indentures  may  contain  such  other clauses and provisions as shall be
approved by the supervising agency, including the right to assignment of
rents and entry into possession in case of default and including in  the
case  of  a  redevelopment  company  which is a partnership or trust the
right of the partners or trustees, as the case may be, to be free of any
personal liability thereunder; but the operation of the housing  project
in  the event of such entry by mortgagee or receiver shall be subject to
regulations promulgated by the supervising agency.  Provisions  for  the
amortization  of  the bonded indebtedness of companies formed under this
article shall be subject to the approval of the supervising  agency.  So
long   as  funds  made  available  by  the  federal  government  or  any

instrumentality thereof or any mortgage or mortgage  bonds,  insured  by
the  federal  housing  administrator or any other instrumentality of the
federal government are used in financing,  in  whole  or  in  part,  any
project  under  this  article,  the capital structure of a redevelopment
company undertaking such project and the  proportionate  amount  of  the
cost  of  the  lands  and improvements to be represented by mortgages or
bonds shall be entirely in the discretion of the supervising agency; and
all restrictions as to the maturity of any construction loan and  as  to
the  amounts  to  be  represented  by  mortgages, mortgage bonds, income
debentures or capital shall be  inapplicable  to  such  projects  or  to
redevelopment  companies  undertaking  such  projects,  except  that the
bonds, mortgages, debentures and capital covering any project shall  not
exceed  the  total  actual  final  cost  of  such  project as defined in
subdivision two of section one hundred twelve of this article.
Interest rates on mortgage indebtedness shall not exceed  the  greater
of
(a) six percentum per annum,
(b)  the  rate  prescribed by the superintendent of financial services
pursuant to section fourteen-a of the banking law,
(c) the rates of mortgages or mortgage bonds insured  by  the  federal
housing  administration  or  any  other  instrumentality  of the federal
government and
(d) such rate as may be approved by the supervising  agency  provided,
however,  that  the  applicable rate for purposes of paragraphs (b), (c)
and (d), of this section one hundred eleven shall be the rate applicable
or approved at the time the redevelopment company  incurs  the  mortgage
indebtedness.
As  used in this section the term "bond" includes a note heretofore or
hereafter made.