Section 654-D. Residential mortgage insurance corporation

1. Definitions.
  As used in this section, the following words and terms  shall  have  the
  following   meanings  unless  the  context  shall  indicate  another  or
  different meaning or intent:
    (a) "Cash equivalent". A letter of credit, insurance  policy,  surety,
  guarantee, indemnity or other security arrangement.
    (b)  "Financial  institution".  (i)  Any bank, trust company, national
  bank, state or federal savings bank, state or federal savings  and  loan
  association,  or  state  or  federal  credit  union,  insurance company,
  pension fund or retirement system of any corporation,  association,  any
  other  entity  which  is  owned  or controlled by any one or more of the
  above, provided such  bank,  trust  company,  national  bank,  state  or
  federal  savings bank, state or federal savings and loan association, or
  state or federal  credit  union,  insurance  company,  pension  fund  or
  retirement  system  of any corporation or association, and, if an entity
  which is owned by one or more of the above, such entity,  is  supervised
  by  or  responsible  to any agency of the federal government, the state,
  any department thereof or the  governing  body  of  any  city,  town  or
  village  of  the  state,  or  (ii)  any  other  entity  approved  by the
  subsidiary corporation, or (iii) any one  or  more  of  the  above  when
  lawfully  acting  as a trustee or otherwise in a fiduciary capacity. The
  term "financial institution" shall  also  include  the  New  York  state
  housing  finance  agency,  the  New  York  state medical care facilities
  finance agency, the state of New York  mortgage  agency,  the  New  York
  state  urban development corporation, the corporation, the New York city
  department  of  housing  preservation  and  development,  the  community
  preservation  corporation,  any governmental agency of the United States
  which customarily makes, purchases or holds  residential  mortgages  and
  any  person  who is approved as a mortgage lender by the federal housing
  administration for purposes of insurance issued by  such  administration
  or licensed by the state of New York as a mortgage banker.
    (c)  "Housing  accommodation".  Any existing building, structure, unit
  thereof (including  an  owner-occupied  unit  in  a  condominium  and  a
  lessee-occupied  dwelling unit in which the lessee retains a proprietary
  lease with respect to such dwelling unit and has an allocable  ownership
  interest  in  a  cooperative  housing  corporation)  or  unimproved real
  property, which is used or occupied,  or  is  intended  to  be  used  or
  occupied  as  the home or residence of one or more persons, a portion of
  which may also be used for commercial  and  other  community  facilities
  ancillary  to  such  residence provided that, in the case of any housing
  accommodation consisting of more than six dwelling units, the floor area
  of above-ground commercial facilities shall not  exceed  one-quarter  of
  the  above-ground floor area of such housing accommodation (inclusive of
  such commercial facilities).
    (d) "Housing insurance contracts". All contracts entered into  by  the
  subsidiary corporation to insure mortgages pursuant to this section, but
  not  including (i) any contracts to insure mortgages entered into by the
  predecessor corporation which  are  imposed  upon  and  assumed  by  the
  subsidiary  corporation  pursuant to paragraph (d) of subdivision two of
  this section, or (ii) any contracts to insure mortgages entered into  by
  the  subsidiary corporation with respect to which a commitment to insure
  was issued by the predecessor corporation.
    (e)  "Housing  insurance  fund".  The  housing   insurance   fund   as
  established pursuant to subdivision twelve of this section.
    (f) "Housing insurance fund requirement". As of any particular date of
  computation,  an  amount  equal  to the aggregate of (i) one hundred per
  centum of  the  insured  amounts  due  and  payable  by  the  subsidiary
  corporation  pursuant  to  housing insurance contracts, plus (ii) twenty

  per centum of the insured  amounts  under  housing  insurance  contracts
  other  than  insured  amounts  which are due and payable pursuant to (i)
  above, plus (iii) twenty per centum of the amounts to be  insured  under
  housing  insurance  contracts  pursuant  to the subsidiary corporation's
  commitments to insure.
    (g) "Mortgage". A first mortgage on real property located  within  the
  city of New York, securing a preservation loan or a rehabilitation loan,
  with  a  term  not  to  exceed  forty years, on real estate, held in fee
  simple or on a leasehold under a lease having a period of years  to  run
  at  the time a mortgage is insured under this section of at least twenty
  per centum greater duration than the remaining term  of  such  mortgage;
  the  term  "first mortgage" means such first liens as are commonly given
  to secure advances on, or the unpaid  purchase  price  of,  real  estate
  under  the  laws  of the state, together with the credit instruments, if
  any, secured thereby.
    (h) "Mortgage insurance contracts". All contracts to insure  mortgages
  entered  into  by  the predecessor corporation that are imposed upon and
  assumed by the subsidiary  corporation  pursuant  to  paragraph  (d)  of
  subdivision  two  of  this section and all contracts to insure mortgages
  entered into by the subsidiary  corporation  with  respect  to  which  a
  commitment to insure was issued by the predecessor corporation.
    (i)   "Mortgage  insurance  fund".  The  mortgage  insurance  fund  as
  established pursuant to subdivision twelve of this section.
    (j) "Mortgage insurance fund requirement". As of any  particular  date
  of  computation, an amount equal to the aggregate of (i) one hundred per
  centum of  the  insured  amounts  due  and  payable  by  the  subsidiary
  corporation  pursuant  to  mortgage  insurance  contracts,  plus (ii) an
  amount equal to the greater of (A) seven million five  hundred  thousand
  dollars  or  (B) twenty per centum of the insured amounts under mortgage
  insurance contracts other than insured amounts which are due and payable
  under subparagraph (i) of this paragraph, plus (iii) twenty  per  centum
  of  the  amounts  to  be  insured  under  the  predecessor corporation's
  commitments to  insure;  provided,  however,  that  notwithstanding  the
  foregoing,  at  no  time  shall  the mortgage insurance fund requirement
  exceed the aggregate of (1) insured  amounts  due  and  payable  by  the
  subsidiary  corporation  pursuant  to mortgage insurance contracts, plus
  (2) one hundred  per  centum  of  the  insured  amounts  under  mortgage
  insurance contracts other than insured amounts which are due and payable
  under  clause  (1) of this paragraph, plus (3) one hundred per centum of
  the  amounts  to  be  insured  under   the   predecessor   corporation's
  commitments to insure.
    (k)  "Mortgagee".  The mortgage lender under a mortgage insured by the
  predecessor corporation or insured pursuant to subdivision ten  of  this
  section, and its successors and assigns.
    (l) "Mortgage loan". A mortgage loan secured by a mortgage.
    (m)  "Mortgagor".  The original borrower under a mortgage loan insured
  by the predecessor corporation or insured pursuant to subdivision ten of
  this section, and its successors and assigns.
    (n) "Multi-family housing accommodation". A housing accommodation with
  five or more dwelling units.
    (o) "Operating expenses". All costs of  administering  the  subsidiary
  corporation, including, but not limited to, salaries and wages, expenses
  of  administering  staff  functions,  fees  of professional consultants,
  legal fees, charges incurred for  servicing  of  mortgage  loans,  money
  management  fees,  office  rents,  utility  charges,  costs of supplies,
  furnishings, equipment, machinery and apparatus, maintenance and  repair
  of  property,  payment to the corporation for services rendered, amounts
  due and owing under contracts validly entered into  by  the  predecessor

  corporation or the subsidiary corporation, other than mortgage insurance
  contracts  and  housing  insurance  contracts,  respectively,  and other
  expenses incurred in connection with any of the foregoing.
    (p)  "Other  real  property".  Any  building,  structure or unimproved
  property which is used or  occupied,  or  is  intended  to  be  used  or
  occupied,  primarily  for  emergency, transitional or shelter housing, a
  portion of which may also be used for  commercial  and  other  community
  facilities  ancillary  to  such  use  provided  that,  the floor area of
  above-ground commercial facilities shall not exceed one-quarter  of  the
  above-ground  floor  area of such other real property (inclusive of such
  commercial facilities).
    (q)  "Predecessor  corporation".  The  New  York  city  rehabilitation
  mortgage  insurance  corporation  created by section one of chapter nine
  hundred twenty-four of  the  laws  of  nineteen  hundred  seventy-three,
  being,  prior to repeal, article fourteen of the private housing finance
  law.
    (r) "Preservation loan". A  mortgage  loan  extended  by  a  financial
  institution  with  a  term not to exceed forty years for the purposes of
  refinancing existing indebtedness secured by one or more mortgages on  a
  housing  accommodation or other real property located within the city of
  New York and/or financing the acquisition of a housing accommodation  or
  other  real  property  located  within  the  city  of New York and which
  otherwise  complies  with  the  conditions   established   pursuant   to
  subdivision ten of this section.
    (s)  "Rehabilitation".  Repairs,  alterations  or  improvements  of  a
  housing accommodation or other  real  property  designed  to  raise  the
  housing  standards  therein  or,  in  the  case  of other real property,
  designed to provide needed improvements  therein.  Rehabilitation  shall
  also  include  the construction of a housing accommodation or other real
  property.
    (t) "Rehabilitation loan". A mortgage loan  extended  by  a  financial
  institution  with a term not to exceed forty years which may include the
  refinancing of existing indebtedness, if any, secured  by  one  or  more
  mortgages  on  the  housing  accommodation  or other real property to be
  rehabilitated, or financing the acquisition of the housing accommodation
  or other real property to be rehabilitated, which housing  accommodation
  or  other real property shall be located within the city of New York and
  which otherwise complies with the  conditions  established  pursuant  to
  subdivision  ten of this section, provided, however, that a sum equal to
  at least twenty-five percent of the amount of the mortgage loan shall be
  used for the cost of rehabilitation of, or construction of  improvements
  on, a housing accommodation or other real property.
    2. New York city residential mortgage insurance corporation. (a) There
  is  hereby  established  a  public benefit corporation known as the "New
  York city residential mortgage insurance corporation"  as  a  subsidiary
  corporation   of   the  corporation.  The  purpose  of  such  subsidiary
  corporation shall be to insure mortgage loans in order  to  promote  the
  preservation  of neighborhoods which are blighted, are becoming blighted
  or may become blighted, to discourage disinvestment  and  encourage  the
  investment  of  mortgage  capital  in  such neighborhoods and to provide
  safe, sanitary and affordable  housing  accommodations  to  persons  and
  families  for  whom the ordinary operations of private enterprise cannot
  supply such accommodations.
    (b)  The  subsidiary  corporation  shall  be  the  successor  to   the
  predecessor corporation.
    (c) All property and rights of the predecessor corporation (other than
  moneys  of  the predecessor corporation) are hereby passed to and vested
  in the subsidiary corporation,  subject,  however,  to  all  outstanding

  contracts  of  insurance,  commitments  to  insure  mortgages,  and  all
  outstanding obligations of the predecessor corporation.  All  moneys  of
  the predecessor corporation (including, but not limited to, amounts held
  in  the  mortgage  insurance  fund established pursuant to section seven
  hundred nine of this chapter, prior to said section being repealed)  and
  all  moneys  held in the remic premium reserve fund established pursuant
  to said section seven hundred nine shall be  transferred  to  the  city;
  provided  that  as  a condition to said transfer, a like amount of money
  shall be transferred from the corporation to the subsidiary  corporation
  to  be deposited into the mortgage insurance fund, the housing insurance
  fund and the remic premium reserve fund  (all  established  pursuant  to
  subdivision  twelve  of  this  section)  in  such  amounts  as  shall be
  determined by the subsidiary corporation, subject to the  provisions  of
  paragraph (a) of subdivision twelve of this section.
    (d)  All  debts,  liabilities, obligations, contracts, agreements, and
  covenants of the predecessor corporation (including, but not limited to,
  contracts of insurance and commitments to insure mortgages)  are  hereby
  imposed  upon  and  shall  be assumed by the subsidiary corporation. All
  persons having claims under any contracts of insurance or commitments to
  insure mortgages entered  into  with  the  predecessor  corporation  may
  enforce  those  claims  against  the  subsidiary corporation in the same
  manner as they might have against the predecessor corporation,  and  the
  rights  and  remedies of such persons shall not be limited or restricted
  in any manner by this section. The foregoing notwithstanding, the debts,
  liabilities, obligations, contracts, agreements  and  covenants  of  the
  predecessor  corporation  shall not be imposed upon the corporation. All
  persons having claims under any contracts of insurance or commitments to
  insure mortgages entered into with  the  predecessor  corporation  shall
  have  no  right  to  enforce  those  claims  in  any  manner against the
  corporation.
    (e) In continuing  the  functions  and  carrying  out  the  contracts,
  obligations  and  duties  of the predecessor corporation, the subsidiary
  corporation is hereby authorized to act in its own name or in  the  name
  of  the  predecessor  corporation as may be convenient or advisable. (f)
  All regulations of the predecessor corporation shall continue to  be  in
  effect  as  the regulations of the subsidiary corporation until amended,
  supplemented or rescinded by the subsidiary  corporation  in  accordance
  with law.
    3.  Assistance; privileges. (a) The subsidiary corporation may receive
  moneys from the corporation, the state, any public benefit  corporation,
  the city, the federal government or any other source for public purposes
  set forth in this section.
    (b)  The  subsidiary corporation may contract for and accept any gifts
  or grants or loans of funds or property or financial or other aid in any
  form from the  federal  government  or  any  agency  or  instrumentality
  thereof,  or  from  the  state or any agency or instrumentality thereof,
  including the city and the corporation, or from any other source, public
  or private, and to comply, subject to the provisions  of  this  section,
  with the terms and conditions thereof.
    (c)  The  city  and the corporation are each hereby authorized to, but
  neither is required to, make gifts, grants or loans of funds or property
  or financial or other aid in any form to the subsidiary corporation  and
  to  enter  into  any  contracts  or other agreements with the subsidiary
  corporation,  on  such  terms  and  conditions  as  the  city   or   the
  corporation,  as  applicable,  and  the subsidiary corporation may agree
  upon, all in furtherance of  the  public  purposes  set  forth  in  this
  section.

    (d)  All  domestic  corporations  or  associations  organized  for the
  purpose  of  carrying  on  business  in  this  state,   public   benefit
  corporations,  public  employee  pension  funds  and  any other persons,
  corporations or associations are hereby authorized to make contributions
  to the subsidiary corporation.
    (e)   The  subsidiary  corporation  shall  have  all  the  privileges,
  immunities, tax exemptions and other exemptions of  the  corporation  to
  the extent the same are not inconsistent with this section.
    4.  Membership.  The  membership  of such subsidiary corporation shall
  consist of  nine  members,  seven  of  whom  shall  be  members  of  the
  corporation and two of whom shall be appointed by the mayor. The members
  who  are not members of the corporation shall serve for terms ending two
  and four years respectively from January first next succeeding the  date
  of  their appointment. The successors of the members who are not members
  of the corporation shall serve for terms of four years  each.  A  member
  who  is  not  a member of the corporation shall continue in office until
  his or her successor has been appointed and qualified. With  respect  to
  any  member who is not a member of the corporation, the mayor shall fill
  any vacancy which may occur by reason of death, resignation or otherwise
  for the remaining unexpired term of such member. A member who is  not  a
  member of the corporation may be removed by the mayor for cause, but not
  without  an  opportunity  to  be  heard in person or by counsel, in such
  member's defense, upon not less than ten days' notice. The powers of the
  subsidiary corporation shall be vested in and exercised by no less  than
  five  of  the members thereof then in office. The subsidiary corporation
  may delegate to one or more of its members, or its officers, agents  and
  employees,   such   duties  and  powers  as  it  may  deem  proper.  The
  commissioner of the department of housing preservation  and  development
  shall  serve as chairperson of the subsidiary corporation. The president
  of  the  corporation  shall  serve  as  president  of   the   subsidiary
  corporation.
    5.  Compensation.  Notwithstanding any inconsistent provisions of this
  or any other general, special or local law, no officer  or  employee  of
  the corporation, the city or the state, or of any public corporation, as
  defined  in  the  general  construction  law,  shall  be  deemed to have
  forfeited or shall forfeit such person's office  or  employment  or  any
  benefits  provided under the retirement and social security law or under
  any public retirement system maintained by the state  or  by  the  civil
  divisions thereof by reason of such person's acceptance of membership on
  or by virtue of such person's being an officer, employee or agent of the
  subsidiary  corporation. The members may engage in private employment or
  in a profession or business, unless otherwise prohibited from  doing  so
  by virtue of holding another public office, subject to the provisions of
  article  eighteen of the general municipal law. For the purposes of such
  article eighteen, the subsidiary corporation shall be  a  "municipality"
  and a member shall be a "municipal officer". No member of the subsidiary
  corporation  shall  receive  additional  compensation,  either direct or
  indirect, other than reimbursement for  actual  and  necessary  expenses
  incurred  in  the performance of such person's duties, by reason of such
  person serving as a member of the subsidiary corporation.
    6. Transfer of resources. The city and the corporation shall have  the
  power  to,  but  shall  not  be obligated to, transfer to the subsidiary
  corporation such agents, employees and facilities,  including  any  real
  and/or  personal  property,  in  order to carry out the purposes of this
  section.
    7. Termination. The subsidiary corporation and its corporate existence
  shall continue until terminated by law; provided, however, that no  such
  law  shall  take effect so long as the subsidiary corporation shall have

  contracts to insure mortgages (including  mortgage  insurance  contracts
  and  housing  insurance contracts), commitments to insure, notes, bonds,
  or other obligations outstanding, unless  adequate  provision  has  been
  made  for  the payment thereof. Upon termination of the existence of the
  subsidiary corporation all of its rights and properties  shall  pass  to
  and be vested in the corporation.
    8. Powers. The subsidiary corporation shall have the power:
    (a) To sue and be sued;
    (b) To have a seal and alter the same at pleasure;
    (c) To make and alter by-laws for its organization;
    (d)  To  adopt,  amend or rescind rules and regulations appropriate to
  carry out  its  corporate  purposes,  including  rules  and  regulations
  governing  the  use of its property and facilities and to establish such
  requirements and enter into such agreements to achieve the objectives of
  this section;
    (e) To make and execute contracts and all other instruments  necessary
  or  convenient  for  the exercise of its powers and functions under this
  section;
    (f) To acquire, hold and dispose of real and/or personal property  for
  its corporate purposes;
    (g)  To engage the services of private consultants on a contract basis
  for rendering professional and technical assistance and advice;
    (h) To appoint officers, agents and employees, prescribe their  duties
  and qualifications and fix their compensation;
    (i) To invest any funds, or other moneys under its custody and control
  in the same manner as the corporation;
    (j)  To  establish  and  levy  fees and charges in connection with the
  processing of  applications  for  mortgage  insurance  and  fix  premium
  charges for mortgage insurance;
    (k)  To  enter  into  commitments to insure mortgages and contracts of
  insurance and enter into any additional  agreements  as  the  subsidiary
  corporation deems appropriate to further the objectives of this section;
    (l)  To  fulfill  its  obligations  and  enforce  its rights under any
  contract of insurance, or commitment to insure so furnished as  provided
  in  this section and such rules and regulations as may be adopted by the
  subsidiary corporation;
    (m) To pay, pursue to final collection, compromise, waive  or  release
  any right, title, claim, lien or demand, however acquired, including any
  equity or right of redemption;
    (n)  To  foreclose  any  mortgage in default or commence any action to
  protect or enforce any right conferred upon it  by  any  law,  mortgage,
  contract  or  other agreement, and to bid for and purchase such property
  at any foreclosure or at any other sale, or otherwise to acquire or take
  possession of any such property;
    (o) To deal with, hold, administer, manage, rent,  repair,  insure  or
  sell, lease or otherwise dispose of any property conveyed to or acquired
  by  the  subsidiary  corporation  and  to enter into agreements with the
  state,  the  city,  or  any  person,  firm,   entity,   partnership   or
  corporation, either public or private, with regard thereto;
    (p)  To  procure  insurance  against  any  loss in connection with its
  property and other assets and to procure reinsurance in connection  with
  its  obligations, all in such amounts and from such insurers as it deems
  necessary or desirable;
    (q) To consent to the modification, with respect to rate of  interest,
  time of payment of any installment of principal or interest, security or
  any other term, of any mortgage, mortgage loan, contract or agreement of
  any  kind  which  the subsidiary corporation has insured or to which the
  subsidiary corporation is a party;

    (r) To sell,  at  public  or  private  sale,  any  mortgage,  mortgage
  participation or other obligation held by the subsidiary corporation;
    (s) To procure cash equivalents for deposit in its funds;
    (t)  To  enter into co-insurance agreements with any entity authorized
  by law to provide mortgage insurance with respect  to  property  located
  within  the city of New York, including, but not limited to the state of
  New York mortgage agency and the United States department of housing and
  urban development;
    (u) To do any and all things necessary or convenient to carry out  its
  purposes  and  exercise  the  powers expressly given and granted in this
  section.
    9.  Classification   of   housing   accommodations.   The   subsidiary
  corporation  may  classify  housing  accommodations  within the city and
  approve any of such classes as eligible for insurance pursuant  to  this
  section  and  enact  separate  guidelines dealing with the provision and
  extent of such insurance.
    10. Insurance of mortgage loans. (a)  The  subsidiary  corporation  is
  authorized,   subject  to  the  provisions  of  this  section,  to  make
  commitments to insure and to contract to insure mortgage loans  eligible
  for insurance hereunder.
    (b)  The  subsidiary  corporation  shall  limit  its  insurance  on  a
  rehabilitation or preservation loan to an amount not in excess of  fifty
  per centum of the outstanding principal indebtedness, provided, however,
  that  the  subsidiary  corporation may insure an amount not in excess of
  seventy-five per centum of the outstanding principal indebtedness  of  a
  rehabilitation  loan  if it shall find that the extent of rehabilitation
  is sufficient to justify such additional  insurance,  provided  further,
  however,  that  the  subsidiary  corporation may insure an amount not to
  exceed the full outstanding principal indebtedness of  a  rehabilitation
  or  preservation  loan when such mortgage loan has been made by a public
  benefit corporation of the  state  of  New  York  which  public  benefit
  corporation  has issued or will issue bonds or notes, some or all of the
  proceeds of which bonds or notes were used or will be used to make  such
  mortgage  loan,  or  when  the  mortgage  loan has been made by a public
  employee pension fund. The foregoing notwithstanding,  the  sum  of  the
  percentage  of  any  mortgage loan insured by the subsidiary corporation
  and the percentage of such loan insured or to be insured  by  any  other
  party  shall  not  exceed  one  hundred  per  centum  of the outstanding
  principal indebtedness of such mortgage loan.
    (c) The subsidiary corporation shall not issue a commitment to  insure
  or a housing insurance contract unless upon the issuance thereof amounts
  on deposit in the housing insurance fund will at least equal the housing
  insurance fund requirement.
    (d)  Except  for  mortgage insurance contracts and except as otherwise
  provided  in  paragraph  (e)  of  this   subdivision,   the   subsidiary
  corporation  shall  not issue a commitment to insure nor shall it insure
  any mortgage loan unless it shall first find (i) that the property which
  is the security for such mortgage loan  is  located  in  a  neighborhood
  within  the  city of New York characterized by a deficiency of available
  mortgage financing; (ii) that such deficiency has caused or threatens to
  cause  undermaintained  and  deteriorating  housing  accommodations  and
  substandard  and  unsanitary  neighborhoods;  (iii) that the granting of
  such mortgage loan will aid in the preservation or rehabilitation of the
  neighborhood in which such  property  is  located;  (iv)  that,  if  the
  property  which  is  the  security  for such mortgage loan is other real
  property, the granting of such mortgage loan will assist  in  preventing
  the  deterioration  of  residential housing in the neighborhood in which
  such property is located;  and  (v)  that  the  property  which  is  the

  security  for  such loan meets such other requirements as the subsidiary
  corporation may from time to time establish by guidelines adopted by the
  subsidiary  corporation.  Any  such  determination  by  the   subsidiary
  corporation  shall  be  conclusive and final and shall not be subject to
  review of any kind or nature or in any manner whatsoever and  shall  not
  give rise to any liability on the part of the subsidiary corporation.
    (e)  The  subsidiary  corporation may issue a commitment to insure and
  may insure any mortgage loans, notwithstanding the criteria set forth in
  subparagraph  (i),  (ii),  (iii)  or  (iv)  of  paragraph  (d)  of  this
  subdivision  provided  that  it  shall  find  the  property which is the
  security for such mortgage loan or mortgage loans is either: (i) located
  within the city of New York in an empire  zone  designated  pursuant  to
  article  eighteen-B  of  the general municipal law, or (ii) will provide
  safe, sanitary and affordable housing for persons and families for  whom
  the  ordinary  operations  of  private  enterprise  cannot  supply  such
  housing, or (iii) the entity providing the mortgage financing was or  is
  created  by  local,  state  or  federal legislation and certifies to the
  subsidiary corporation that the housing  accommodations  or  other  real
  property  are  located  within the city of New York and meet the program
  criteria  applicable  to  such  entity.  In  addition,  the   subsidiary
  corporation   may   enter   into   any   mortgage   insurance  contract,
  notwithstanding the criteria set forth in subparagraph (i), (ii),  (iii)
  or  (iv) of paragraph (d) of this subdivision provided that with respect
  to such mortgage insurance contract, a commitment to insure  shall  have
  been previously issued by the predecessor corporation.
    (f)  The  subsidiary  corporation may issue a commitment to insure and
  may insure an existing mortgage  loan,  when  an  application  for  such
  mortgage  insurance  has  been  submitted  prior  to  the making of such
  mortgage loan,  and  significant  circumstances  beyond  the  reasonable
  control  of  the  mortgagor  and mortgagee necessitate the making of the
  mortgage loan prior to the issuance of the commitment to insure and when
  it is determined by the subsidiary corporation that such  mortgage  loan
  would  not have been made except for the reasonable expectation that the
  subsidiary corporation would insure the mortgage loan.
    (g) To be eligible for insurance under this section, a  mortgage  loan
  shall  be  a preservation loan and/or a rehabilitation loan and (i) bear
  interest,  exclusive  of  premium  charges  fixed  by   the   subsidiary
  corporation,  at a rate not in excess of the rate of interest authorized
  by law and not in excess of a maximum rate of  interest  established  by
  the   subsidiary   corporation   from   time  to  time.  In  making  its
  determination of  appropriate  maximum  interest  rate,  the  subsidiary
  corporation  shall  take into account the rates of interest prevalent in
  the mortgage  market,  current  data  on  secondary  market  yields  and
  discount  and/or  premium levels; (ii) unless the subsidiary corporation
  in  its  sole  discretion  shall  otherwise   determine,   provide   for
  substantially  equal  and  constant  periodic  payments of principal and
  interest in amounts sufficient to  pay  all  interest  and  effect  full
  repayment  of  principal  within  the  term  of the mortgage loan; (iii)
  contain terms  with  respect  to  the  prepayment,  insurance,  repairs,
  alterations,  payment  of  taxes,  special assessments, service charges,
  default  reserves,   delinquency   charges,   foreclosure   proceedings,
  additional and secondary liens, and such other matters as the subsidiary
  corporation  may  in  its  discretion  prescribe; (iv) be accompanied by
  certificates, issued by such  officers  of  the  mortgagee,  independent
  appraisers  or  other persons as the subsidiary corporation may require,
  certifying that: (A) where appropriate, the annual income to be  derived
  from  the  property  equals not less than one hundred five per centum of
  the annual charges  and  expenses,  including  provision  for  reserves,

  satisfactory  to  the  subsidiary  corporation,  for the amortization of
  subordinate mortgage loans over the remaining  terms  of  such  mortgage
  loans regardless of whether the terms of such subordinate mortgage loans
  include  scheduled  amortization  of principal; (B) the remaining useful
  life of the property is greater than the term of the mortgage;  and  (C)
  the  housing  accommodation  or other real property does not contain any
  substantial violations of the housing maintenance code or  the  multiple
  dwelling  law,  except  that  in the case of a mortgage loan made to the
  owner of a housing accommodation or other real property  containing  any
  such  violations,  the  subsidiary  corporation  may insure or commit to
  insure such mortgage loan if the mortgagee and the owner have  submitted
  a  plan,  satisfactory  to  the subsidiary corporation to eliminate such
  violations; and (v) satisfy such additional terms and conditions as  the
  subsidiary corporation may prescribe.
    (h)  In addition to the conditions set forth in paragraphs (d) through
  (g) in this subdivision, the subsidiary corporation shall not insure nor
  issue a commitment to insure any rehabilitation  loan  unless  it  shall
  find  (i) that rehabilitation is necessary to upgrade the property, (ii)
  that rehabilitation will not necessitate more than a minimum  amount  of
  relocation  of the residents of any housing accommodation and (iii) that
  the rehabilitation undertaken with the proceeds  of  the  rehabilitation
  loan has been completed.
    (i)   A   financial  institution  may  request  insurance  by  written
  application to the subsidiary  corporation  in  such  form  and  manner,
  together   with  such  information  and  documents,  as  the  subsidiary
  corporation may prescribe. No application shall be complete  unless  and
  until  the financial institution has paid such processing fees and other
  charges  as  the  subsidiary  corporation  may  impose   in   connection
  therewith.  The  subsidiary  corporation shall signify its acceptance of
  such application for insurance by issuance of a commitment to insure  or
  a contract of insurance.
    (j)  The subsidiary corporation shall not issue a commitment to insure
  a mortgage loan extended by the corporation unless  such  commitment  to
  insure  is  approved  by at least two members of a committee composed of
  the chairperson of the subsidiary corporation and  the  members  of  the
  subsidiary corporation who are not members of the corporation.
    11.  Payment  of insurance. The subsidiary corporation shall establish
  procedures to be followed by a mortgagee in the event of a default under
  the terms  of  any  mortgage  insured  by  the  subsidiary  corporation,
  provided,  however,  any  modification to such procedures (other than to
  cure any ambiguity, defect or omission) shall apply  only  to  mortgages
  for  which commitments have been issued after the effective date of such
  modification. The subsidiary corporation may establish prerequisites for
  payment of an insurance claim, including, but not limited to,  requiring
  the mortgagee to take such actions with respect to the property securing
  the defaulted mortgage as may be specified by the subsidiary corporation
  to  be  satisfactory evidence of a continuing default, including but not
  limited to the following actions: (i) becoming lawfully the mortgagee in
  possession thereof; (ii) causing a receiver  to  be  appointed  of  such
  property;  (iii) obtaining voluntary conveyance of the mortgagor's right
  and title to such property; or (iv) obtaining by foreclosure  clear  and
  unencumbered  title  to  such  property,  all  in  such  manner  as  the
  subsidiary corporation may require.  Following  submission  of  a  valid
  claim,  the  subsidiary  corporation shall pay an amount which shall not
  exceed the lesser of: (A) the then outstanding principal amount  of  the
  mortgage multiplied by the per centum of such outstanding amount insured
  by  the  subsidiary  corporation plus that per centum of the mortgagee's
  cost arising from the default, inclusive of public liens and  delinquent

  and  unpaid interest, all as the subsidiary corporation may from time to
  time allow, which per centum shall not exceed  the  per  centum  of  the
  outstanding principal indebtedness insured by the subsidiary corporation
  or  (B) the insured amount of the mortgage loan at the date of execution
  of the contract of insurance or its latest  amendment,  if  any,  except
  that the subsidiary corporation shall pay the greater of the two amounts
  on  claims  by  a  public  employee  pension fund or by a public benefit
  corporation from mortgage loans financed by the sale of notes  or  bonds
  issued  by  said corporation and such amount payable may, if so provided
  in the contract of insurance, include accrued interest to  the  date  of
  redemption  for  such  bonds  or notes and any cost associated with such
  redemption, provided that no more than the actual loss suffered by  such
  public  benefit  corporation  or  public  employee pension fund shall be
  paid. Such payment may be made by the subsidiary corporation in  a  lump
  sum,  or  in  partial  payments  made within such period of time, not in
  excess of two  years,  as  may  be  agreed  to  between  the  subsidiary
  corporation  and  the mortgagee, all in accordance with procedures to be
  established by the subsidiary corporation.  The  subsidiary  corporation
  shall  have  the power to bid for and purchase the property securing the
  defaulted mortgage at any foreclosure or other sale of such property, or
  to otherwise acquire or take possession of such property  in  accordance
  with  other  provisions  of  law.  In  the  event  of any such purchase,
  acquisition, or taking of possession, the subsidiary  corporation  shall
  have  the power to complete, administer, sell, dispose of, and otherwise
  deal with such property, in such manner as may be necessary or desirable
  to protect the interests of the subsidiary corporation.
    12. Mortgage insurance fund, housing insurance fund and remic  premium
  reserve  fund. (a) The subsidiary corporation shall create and establish
  a fund to be known as the "mortgage insurance fund" which shall be  used
  as a revolving fund for carrying out the provisions of this section with
  respect  to  mortgage  insurance contracts and shall, upon its creation,
  pay into such fund moneys made available to the  subsidiary  corporation
  from  the  corporation in an amount equal to the mortgage insurance fund
  requirement as of such date for the purpose  of  such  fund,  and  shall
  thereafter,  pay  into  such  fund,  upon  receipt,  (i) such portion of
  mortgage insurance contract premium payments in an amount equal  to  the
  amount  necessary  to  be  transferred to the mortgage insurance fund in
  order that the amount on  deposit  therein  be  equal  to  the  mortgage
  insurance  fund requirement (or such lesser amount as may be available);
  (ii) such portion of the proceeds received by the subsidiary corporation
  in connection with the exercise of such subsidiary corporation's  rights
  under  any  mortgage insurance contract in an amount equal to the amount
  necessary to be transferred to the mortgage insurance fund in order that
  the amount on deposit therein be equal to the  mortgage  insurance  fund
  requirement  (or  such  lesser  amount  as  may be available); (iii) any
  moneys appropriated, paid or otherwise made available by the city or the
  corporation for the purpose of such fund;  and  (iv)  any  other  moneys
  which  may  be  made  available  to  the  subsidiary corporation for the
  purpose of such fund from any other  source.  All  moneys  held  in  the
  mortgage  insurance fund, except as hereinafter provided, shall be used,
  as required, solely for the  payment  of  the  subsidiary  corporation's
  liabilities   arising   from  mortgage  insurance  contracts;  provided,
  however, that moneys in such fund shall not be  withdrawn  therefrom  at
  any  time in such amount as would reduce the amount of such fund to less
  than the mortgage insurance fund requirement, except for the purposes of
  paying such liabilities, as the same become due and for the  payment  of
  which  other moneys of the subsidiary corporation are not available. Any
  income or interest earned by, or increment to,  the  mortgage  insurance

  fund  due  to  the  investment  thereof  or  any amount in excess of the
  mortgage insurance  fund  requirement  shall  be  transferred  at  least
  annually by the subsidiary corporation to the remic premium reserve fund
  or,  at the written direction of the chairperson, to such other funds or
  accounts of the subsidiary corporation to the extent it does not  reduce
  the  amount  of the mortgage insurance fund below the mortgage insurance
  fund requirement.
    (b) The subsidiary corporation shall create and establish a fund to be
  known as the "housing insurance fund" which shall be used as a revolving
  fund for carrying out the provisions of this  section  with  respect  to
  housing  insurance contracts and shall, upon its creation, pay into such
  fund any moneys or cash equivalents made  available  to  the  subsidiary
  corporation from the corporation for the purpose of such fund, and shall
  thereafter,  pay  into  such  fund,  upon  receipt,  (i) such portion of
  housing insurance contract premium payments in an amount  equal  to  the
  amount  necessary  to  be  transferred  to the housing insurance fund in
  order that the amount  on  deposit  therein  be  equal  to  the  housing
  insurance  fund requirement (or such lesser amount as may be available);
  (ii) such portion of the proceeds received by the subsidiary corporation
  in connection with the exercise of such subsidiary corporation's  rights
  under  any  housing  insurance contract in an amount equal to the amount
  necessary to be transferred to the housing insurance fund in order  that
  the  amount  on  deposit  therein be equal to the housing insurance fund
  requirement (or such lesser amount  as  may  be  available);  (iii)  any
  moneys   or  cash  equivalents  appropriated,  paid  or  otherwise  made
  available by the city, the federal government or the corporation for the
  purpose of such fund; and (iv) any  other  moneys  or  cash  equivalents
  which  may  be  made  available  to  the  subsidiary corporation for the
  purpose of  such  fund  from  any  other  source.  All  moneys  or  cash
  equivalents  held  in  the housing insurance fund, except as hereinafter
  provided, shall be used, as required, solely  for  the  payment  of  the
  subsidiary  corporation's  liabilities  arising  from  housing insurance
  contracts; provided, however, that moneys or cash  equivalents  in  such
  fund  shall  not  be  withdrawn  therefrom at any time in such amount as
  would reduce the amount of such fund to less than the housing  insurance
  fund  requirement, except for the purpose of paying such liabilities, as
  the same become due and for the payment of which  other  moneys  of  the
  subsidiary  corporation are not available. Any income or interest earned
  by, or increment to, the housing insurance fund due  to  the  investment
  thereof   or  any  amount  in  excess  of  the  housing  insurance  fund
  requirement shall be transferred at least  annually  by  the  subsidiary
  corporation  to  the  remic  premium  reserve  fund  or  at  the written
  direction of the chairperson, to such other funds  or  accounts  of  the
  subsidiary  corporation  to  the extent it does not reduce the amount of
  the housing insurance fund below the housing insurance fund requirement.
    (c)  The  subsidiary  corporation  shall  create  and  establish  such
  accounts  within  the  housing  insurance  fund  as  may be necessary or
  desirable for its corporate purposes.
    (d) The subsidiary corporation shall create and establish a fund to be
  known as the "remic premium reserve fund" for the purpose  of  providing
  for payment of the subsidiary corporation's liabilities arising from its
  operations,  its  mortgage insurance contracts and its housing insurance
  contracts and shall, upon its creation, pay into  such  fund  moneys  or
  cash  equivalents  made available to the subsidiary corporation from the
  corporation for the purpose of such fund, and shall thereafter, pay into
  such fund, upon receipt, (i) the balance of  the  premium  payments,  if
  any,  received  by  the  subsidiary corporation with respect to mortgage
  insurance contracts and housing insurance  contracts  after  making  the

  deposits described in subparagraph (i) of paragraph (a) and subparagraph
  (i) of paragraph (b) respectively, of this subdivision; (ii) the balance
  of  any  proceeds  received  by the subsidiary corporation in connection
  with  the  exercise  of  such  subsidiary corporation's rights under any
  mortgage insurance contract or housing insurance contract  after  making
  the  deposits  described  in  subparagraph  (ii)  of  paragraph  (a) and
  subparagraph (ii) of paragraph (b)  respectively  of  this  subdivision;
  (iii)  any  moneys  or  cash equivalents appropriated, paid or otherwise
  made available by the city, the federal government  or  the  corporation
  for  the  purpose  of  such  fund;  and  (iv)  any  other moneys or cash
  equivalents which may be made available to  the  subsidiary  corporation
  for the purpose of such fund from any other source.
    (e)  The  subsidiary  corporation  shall  create  and  establish  such
  accounts within the remic premium reserve fund as may be  necessary  for
  its corporate purposes.
    (f)  Except as otherwise provided in this section, all moneys received
  by the subsidiary corporation shall be deposited in  the  remic  premium
  reserve fund.
    (g)  If  the  remic premium reserve fund is funded in whole or in part
  with cash, the moneys in such fund shall be deposited  in  one  or  more
  banks  or  trust  companies  designated,  in  manner provided by law, as
  depositories of the funds of the subsidiary corporation. The  subsidiary
  corporation  may  invest  any  moneys in such fund in the same manner as
  moneys  of  the  corporation  may  be  invested,  provided   that   such
  obligations  shall  be  payable  within such time as the proceeds may be
  needed to meet expenditures estimated to be incurred by  the  subsidiary
  corporation.  Any  interest earned or capital gain realized on the money
  so deposited or invested shall accrue to and become part of  such  fund.
  The  separate  indentity  of  such  fund shall be maintained whether its
  assets consist of cash or investments or both.
    (h) The subsidiary corporation shall transfer from the  remic  premium
  reserve   fund  such  moneys  as  the  subsidiary  corporation,  by  its
  chairperson, shall certify are required for the  subsidiary  corporation
  to  pay  its operating expenses, to pay any liabilities arising from the
  subsidiary  corporation's  mortgage  insurance  contracts  and   housing
  insurance  contracts, and to restore the mortgage insurance fund and the
  housing insurance fund to the mortgage insurance  fund  requirement  and
  housing insurance fund requirement, respectively.
    (i)  The  subsidiary corporation shall keep a separate account for the
  remic premium reserve fund. Such account shall show  (i)  the  date  and
  amount  of  each sum paid into the fund, (ii) the interest earned by the
  fund, (iii) the capital gains or  losses  resulting  from  the  sale  of
  investments  of  the fund, (iv) the interest or capital gains which have
  accrued to the fund, (v) the amount and date of each withdrawal from the
  fund, and (vi) the assets  of  the  fund  indicating  the  cash  balance
  therein and a schedule of the amounts invested.
    (j)  In  computing  the  amount  of  the  mortgage insurance fund, the
  housing insurance fund and  the  remic  premium  reserve  fund  for  the
  purposes  of  this section, securities in which all or a portion of such
  funds shall be invested shall be valued at par, if purchased at par,  or
  if  purchased  at  other  than par, at amortized value. Amortized value,
  when used with respect to securities purchased at a premium above  or  a
  discount below par or if purchased at par, or if purchased at other than
  par,  shall mean the value as of any given date obtained by dividing the
  total premiums or discount at which such securities  were  purchased  by
  the number of interest payments remaining to maturity on such securities
  after  such  purchase and by multiplying the amount so calculated by the
  number of interest payment dates having passed since the  date  of  such

  purchase;  and  (i)  in the case of securities purchased at a premium by
  deducting the product thus obtained from the purchase price, and (ii) in
  the case of securities purchased at a discount  by  adding  the  product
  thus obtained to the purchase price.
    (k)  The  subsidiary corporation shall create and establish such other
  fund or funds as  may  be  necessary  or  desirable  for  its  corporate
  purposes.
    13.  Charges  and  fees.  (a)  The  subsidiary corporation shall fix a
  premium charge for its insurance of mortgages pursuant to  this  section
  which  shall  not  be  less  than  the  minimum amount nor more than the
  maximum amount that the state of New York mortgage agency  is  permitted
  to charge pursuant to applicable provisions of law.
    (b)  The  subsidiary  corporation  may  establish  and levy such other
  charges and fees in connection with applications for mortgage  insurance
  and insurance commitments as it may deem appropriate and necessary.
    (c)  Such  premium  charges  and other charges shall be payable by the
  mortgagor in cash in such manner as may be prescribed by the  subsidiary
  corporation.
    (d)  Such  premium  charges  and  other  charges and fees shall not be
  deemed to be interest for the purposes of section 5-501 of  the  general
  obligations law.
    14.   Assistance   by  the  corporation.  The  corporation  is  hereby
  authorized to perform such functions and services in connection with any
  lawful corporate purpose of  the  subsidiary  corporation  as  shall  be
  requested  by  the  subsidiary  corporation.  The subsidiary corporation
  shall  pay  to  the  corporation  from  any  moneys  of  the  subsidiary
  corporation available for such purposes such amounts as are necessary to
  pay  the  corporation  for  the  services  rendered  by  the corporation
  pursuant to this section.
    15.  Assistance  by  the  department  of  housing   preservation   and
  development.  The  commissioner  of housing preservation and development
  and the department of housing preservation and  development  are  hereby
  authorized to perform such functions and services in connection with any
  lawful  corporate  purpose  of  the  subsidiary  corporation as shall be
  requested by the  subsidiary  corporation.  The  subsidiary  corporation
  shall pay to the department of housing preservation and development from
  any  moneys  of  the  subsidiary corporation available for such purposes
  such amounts as are necessary to reimburse  the  department  of  housing
  preservation  and development for the services provided pursuant to this
  section.
    16. Annual report. The subsidiary  corporation  shall  submit  to  the
  mayor,  the  comptroller,  the director of management and budget and the
  corporation within ninety days after the  end  of  its  fiscal  year,  a
  complete  and  detailed  report  setting  forth:  (i) its operations and
  accomplishments; (ii) its receipts and expenditures during  such  fiscal
  year in accordance with the categories or classifications established by
  the   subsidiary  corporation  for  its  operating  and  capital  outlay
  purposes; and (iii) its assets and liabilities at the end of its  fiscal
  year,  including  a schedule of mortgages which have been insured during
  such year, the status of the mortgage insurance fund, housing  insurance
  fund  and  other  reserve or special funds established by the subsidiary
  corporation.
    17. Moneys of the  subsidiary  corporation.  (a)  All  moneys  of  the
  subsidiary  corporation,  except  as otherwise authorized or provided in
  this section, shall be deposited as soon as practicable  in  a  separate
  account or accounts in banks or trust companies organized under the laws
  of  the  state  or  national  banking  association,  in  each case doing
  business in the city. The moneys in such accounts shall be paid  out  on

  checks  signed by such officer or employee of the subsidiary corporation
  as the subsidiary corporation shall  authorize.  All  deposits  of  such
  moneys  shall,  if required by the subsidiary corporation, be secured by
  obligations  of  the  United  States or of the state or of the city of a
  market value equal at all times to the amount of  the  deposit  and  all
  banks  and trust companies are authorized to give such security for such
  deposits.
    (b) The subsidiary corporation shall prescribe a system of accounts.
    (c)  The  comptroller,  or  the   comptroller's   legally   authorized
  representative,  is hereby authorized and empowered from time to time to
  examine the books and accounts of the subsidiary  corporation  including
  its  receipts,  disbursements,  contracts, reserve funds, sinking funds,
  investments, and any other matters relating to its  financial  standing.
  Such  an examination shall be conducted by the comptroller at least once
  in every five years; the comptroller is authorized, however,  to  accept
  from  the  subsidiary  corporation,  in  lieu of such an examination, an
  external examination of its books and accounts made at  the  request  of
  the subsidiary corporation.
    (d)  The  subsidiary  corporation  shall  submit  to  the  mayor,  the
  comptroller and the  corporation  within  thirty  days  of  the  receipt
  thereof  by  the  subsidiary  corporation  a copy of the report of every
  external examination  of  the  books  and  accounts  of  the  subsidiary
  corporation  other  than copies of the reports of such examinations made
  by the comptroller.
    18. Rentals. Notwithstanding the  provisions  of,  or  any  regulation
  promulgated  pursuant  to,  the  emergency housing rent control law, the
  local emergency housing rent control act or local law  enacted  pursuant
  thereto, all dwelling units in a multiple dwelling the rehabilitation of
  which  commenced  after  July  first, nineteen hundred seventy-seven and
  which  is  financed  by  a  mortgage  loan  insured  by  the  subsidiary
  corporation  (including,  but  not  limited  to,  mortgage loans insured
  pursuant  to  mortgage  insurance  contracts   and   housing   insurance
  contracts), except for dwelling units occupied by reason of ownership of
  stock  in  a  cooperative  and except for dwelling units that constitute
  condominiums, shall be subject to the rent stabilization law of nineteen
  hundred  sixty-nine,  beginning  immediately  after  initial  rents,  as
  established  under  applicable  provisions of this chapter, section four
  hundred twenty-one-a of the real property tax law, section four  hundred
  eighty-nine  of  the  real  property  tax law and/or subparagraph (m) of
  paragraph one of subdivision g of section 26-405 of  the  administrative
  code of the city of New York for such dwelling units to become effective
  on  the  basis  of  such  rehabilitation,  provided that any occupant in
  possession of a dwelling unit that first becomes  subject  to  the  rent
  stabilization  law  of  nineteen  hundred  sixty-nine  pursuant  to this
  section shall be offered a two-year lease notwithstanding  any  contrary
  provisions   of,   or   regulations   adopted  pursuant  to,  such  rent
  stabilization law, at the initial rent  established  for  such  dwelling
  unit  and  provided  further  that such dwelling units, other than those
  dwelling units,  the  initial  rents  of  which  are  established  under
  subparagraph  (m) of paragraph one of subdivision g of section 26-405 of
  the administrative code of the city of New York, shall remain subject to
  the rent stabilization law in accordance with  the  provisions  of  this
  chapter,  section four hundred twenty-one-a of the real property tax law
  and/or section four hundred eighty-nine of the real property tax law  as
  the case may be. Except to the extent to which dwelling units, which are
  controlled  under  other  provisions  of law, become subject to the rent
  stabilization  law  of  nineteen  hundred  sixty-nine  pursuant  to  the
  preceding  sentence,  no  dwelling unit shall become subject to the rent

  stabilization law solely by reason of insurance of a  mortgage  loan  by
  the subsidiary corporation.
    19.  Employees  of the subsidiary corporation. (a) Notwithstanding any
  inconsistent provisions of this section, the appointment  and  promotion
  of  all employees of and for the subsidiary corporation shall be made in
  accordance with the provisions  of  the  civil  service  law  under  the
  jurisdiction  of  the city civil service commission and the compensation
  for such employees shall be fixed by the subsidiary corporation.
    (b) The city, the corporation and the  predecessor  corporation  shall
  have the power to provide for the transfer to the subsidiary corporation
  of  agents, employees and facilities of the city, the corporation or the
  predecessor corporation, as the case may be, to  enable  the  subsidiary
  corporation  to  fulfill  its corporate purposes. Employees of the city,
  the corporation or the predecessor corporation to be transferred to  the
  subsidiary  corporation  pursuant  to this section shall be eligible for
  such transfer and appointment to offices and positions of the subsidiary
  corporation without further examination, and all such employees who have
  been appointed to positions in  city  service  in  accordance  with  the
  provisions  of  the  civil service law under the rules of the city civil
  service commission shall have the same status with  respect  thereto  in
  the  service  of the subsidiary corporation as they had in city service.
  Employees who are members or beneficiaries of any  existing  pension  or
  retirement  system  shall  continue  to  have  such  rights, privileges,
  obligations or status with respect to such  system  or  systems  as  are
  prescribed  by  law  on the date this section takes effect, and all such
  employees who have been  appointed  to  positions  in  city  service  in
  accordance  with the provisions of the civil service law under the rules
  of the city civil service commission shall have  the  same  status  with
  respect  thereto  in  the service of the corporation as they had in city
  service.
    20. Subsidiaries; how  created.  (a)  The  subsidiary  corporation  by
  resolution  may  direct  any  of  its  members, officers or employees to
  organize a subsidiary of the subsidiary  corporation  whenever,  in  the
  sole  discretion  of the subsidiary corporation, it has become necessary
  to acquire one or more housing accommodations or other real property  in
  the  case  of sale under foreclosure or in lieu of foreclosure and it is
  beneficial to effectuate the purpose of this chapter for the  subsidiary
  of   the   subsidiary   corporation   to  hold  title  to  such  housing
  accommodations or other real property.
    (b) Each such subsidiary of the subsidiary corporation shall be wholly
  owned by the subsidiary corporation and shall be organized  pursuant  to
  the  business  corporation  law,  the  not-for-profit corporation law or
  article two or article eleven of this chapter.
    (c) The subsidiary corporation may transfer to any subsidiary  of  the
  subsidiary  corporation  any money, real and/or personal property or may
  convey to it any housing accommodation or other real property  in  order
  to  carry  out the purposes of this article. Each such subsidiary of the
  subsidiary corporation shall have all the  privileges,  immunities,  tax
  exemptions  and  other  exemptions  of the subsidiary corporation to the
  extent the same are  not  inconsistent  with  the  statute  or  statutes
  pursuant  to  which  such  subsidiary  of the subsidiary corporation was
  incorporated. Except as may be inconsistent with the provisions of  this
  article,  such  subsidiary,  if  organized  pursuant  to  article two or
  article eleven of this chapter, shall have all  the  rights  and  powers
  granted  to  housing  companies by this chapter and by any other statute
  pursuant to which such subsidiary  of  the  subsidiary  corporation  was
  organized.

    (d)  No  member or officer of the subsidiary corporation shall receive
  any additional compensation,  either  direct  or  indirect,  other  than
  reimbursement   for  actual  and  necessary  expenses  incurred  in  the
  performance of such person's duties, by reason of such person serving as
  a  member,  director,  trustee  or  officer  of  any  subsidiary  of the
  subsidiary corporation.