Section 44-B. Mortgage modifications, evidence of pre-existing indebtedness

1.    Notwithstanding  the provision of any law, general or special, the
  agency shall have the power to:
    (i) consent to and contract for the modification of any of  the  terms
  of  a  mortgage, and note or bond secured thereby, made pursuant to this
  article for the purpose of obtaining insurance of such mortgage loan  by
  the  federal  government  in  order  to refinance all or any part of the
  indebtedness evidenced by such mortgage and note or bonds, or
    (ii) satisfy such mortgage loan in order  to  enable  the  company  to
  obtain  insurance  by the federal government of a mortgage loan made for
  the purpose of refinancing all or any part of the indebtedness evidenced
  by such mortgage and note or bond.
    Notwithstanding the provisions hereof, the agency  on  or  after  June
  fifteen,  nineteen  hundred  seventy-six,  shall not modify or satisfy a
  mortgage loan, pursuant to this subdivision  one,  where  the  principal
  amount  of  the  mortgage loan insured by the federal government is less
  than eighty-five per centum of the principal amount outstanding  on  the
  original  mortgage  loan  at  the  time  such  original mortgage loan is
  refinanced, unless such modification or satisfaction is  first  approved
  by  the New York state public authorities control board created pursuant
  to article one-A of the public authorities law.
    2. In the event that the existing mortgage loan is satisfied  pursuant
  to this section, the agency may in consideration of the issuance of such
  satisfaction  accept  a  new  mortgage  and  note or bond insured by the
  federal government in an amount equal to the maximum principal amount of
  a mortgage loan  the  federal  government  will  insure  or  accept  the
  proceeds   available   to  the  housing  company  as  a  result  of  the
  refinancing.
    3. In the event that  there  is  residual  indebtedness,  the  housing
  company  shall make and the agency shall accept an instrument evidencing
  such indebtedness in such form and upon such terms  as  the  agency  may
  approve,  provided that such terms are not inconsistent with subdivision
  two of section twenty of this chapter.
    4. Notwithstanding any other provisions  of  this  article  where  the
  commissioner  has  made  the  findings  required  in  subdivision one of
  section twenty-six and where a project has  been  approved  pursuant  to
  subdivision  five  of section twenty-six of this chapter, the agency may
  make or contract to make a mortgage loan pursuant to subdivision two  or
  three  of  this  section without further findings by the commissioner or
  further approval by the local legislative body.
    5. No company shall accept a  mortgage  loan  to  be  insured  by  the
  federal  government  made  for  the  purpose of refinancing the existing
  mortgage loan of a company which shall exceed the amount  which  can  be
  supported by the income derived from the operation of the project at the
  rental  rate  determined  by the commissioner that would be necessary to
  meet all necessary payments to be made by the company, of  all  expenses
  including  fixed  charges,  sinking  funds,  reserves  and  dividends on
  outstanding stock as authorized by the commissioner,  if  the  principal
  amount  of  the  original  mortgage loan of the company were to be fully
  repaid over the term  of  such  mortgage  loan  by  constant  and  equal
  payments  of  principal  and  interest  and  if the interest rate on the
  company's original mortgage loan was  eight  and  one-half  percent  per
  annum.