2013 New York Consolidated Laws
PVH - Private Housing Finance
Article 2 - (10 - 37) 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.