Section 81. Mortgages and mortgage bonds

1. (a) Any housing company formed
  under this article may, subject to the  approval  of  the  commissioner,
  borrow  funds  and  secure  the  repayment  thereof  by bond or note and
  mortgage or by an issue of bonds under trust indenture. Each mortgage or
  issue of bonds by a housing company formed hereunder shall  relate  only
  to  a  single  specified  project  and  no other and said bonds shall be
  secured by mortgage upon all of the real property of which said  project
  consists.
    (b)  First lien bonds or notes of such housing company when secured by
  a mortgage not exceeding four-fifths of the estimated cost prior to  the
  completion  of  the  project,  or  four-fifths of the appraised value or
  actual  cost,  whichever  shall  be  less,  after  such  completion,  as
  certified  by  the commissioner, are hereby declared securities in which
  all public officers and  bodies  of  the  state  and  of  the  municipal
  subdivisions,  all insurance companies and associations, and all savings
  banks and savings institutions, including savings and loan associations,
  in the state may properly and legally  invest  the  funds  within  their
  control.
    2. The bonds and notes so issued and secured and the mortgage or trust
  indentures  relating  thereto,  may  create a first or senior lien and a
  second or junior lien upon the real property embraced  in  any  project;
  provided, however, that the total mortgage liens shall not exceed eighty
  per centum of the estimated cost prior to the completion of the project,
  or  eighty  per  centum of the appraised value or actual cost, whichever
  shall be less, as certified by the commissioner after  such  completion.
  Where  there  is  a  first  and a second mortgage lien upon the property
  embraced in a project, only the first or senior lien  thereon  shall  be
  deemed  a  security  in  which  such  officers, bodies, corporations and
  associations may invest the funds within their control. Such  bonds  and
  mortgages,  notes  and  mortgages  or  trust indentures may contain such
  other clauses and provisions as shall be approved by  the  commissioner,
  including  the right to assignment of rents and entry into possession in
  case of default and including in the case of a housing 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 the regulations of the commissioner
  under this article.  Provisions  for  the  amortization  of  the  bonded
  indebtedness  or  notes  of  indebtedness of companies formed under this
  article shall be subject to the approval of the commissioner.
    3. (a) So long as funds made available by the  federal  government  or
  any  instrumentality  thereof  or  any mortgage, mortgage bonds or notes
  guaranteed or insured by the federal government or  any  instrumentality
  thereof,  or  any  mortgage  or  mortgage  bonds  or  notes  secured  by
  obligations so guaranteed or insured, or tax exempt  obligations  issued
  pursuant  to section eleven of the United States housing act of nineteen
  hundred thirty-seven, are used in financing, in whole or  in  part,  any
  project  under  this article, the capital structure of a housing company
  undertaking such project and the proportionate amount of the cost of the
  lands and improvements to be represented by mortgages,  bonds  or  notes
  shall  be  entirely  in  the  discretion  of  the  commissioner; and all
  restrictions as to the amounts to be represented by mortgages,  mortgage
  bonds, mortgage notes, income debentures or shares shall be inapplicable
  to  such  projects  or  to  housing companies undertaking such projects,
  except that the bonds, notes, mortgages, debentures and shares  covering
  any  project  shall not exceed the actual final cost of such project, as
  defined in this article.

    (b) Notwithstanding anything contained in paragraph (b) of subdivision
  one of this section, first lien bonds or other  obligations  of  housing
  companies,  secured by a first mortgage upon all of the real property of
  a project and not exceeding the estimated cost prior to  the  completion
  of  the  project, or the appraised value or actual cost, whichever shall
  be less, after such completion, as certified by  the  commissioner,  are
  hereby  declared  securities  in which all public officers and bodies of
  the state and of the municipal subdivisions, all insurance companies and
  associations, and all savings banks and savings institutions,  including
  savings  and  loan  associations,  in the state may properly and legally
  invest the funds within their control, provided that
    (1) the federal housing  commissioner  has  insured,  or  has  made  a
  commitment to insure, such mortgage; or
    (2)  such  bonds  or other obligations are guaranteed or insured to at
  least forty per centum of the principal amount thereof under title three
  of an act of congress of the United States  entitled  the  "Servicemen's
  Readjustment  Act  of 1944," or are secured by obligations so guaranteed
  or insured; or
    (3) such bonds or other obligations evidence a loan for the purpose of
  financing construction and are to be guaranteed or  insured  under  said
  title   three,   as   hereinabove  provided,  upon  completion  of  such
  construction, and all funds advanced on  such  loan  are  guaranteed  or
  insured  under  said  title  three  to the extent of at least thirty per
  centum of such advance, or are secured by obligations so  guaranteed  or
  insured.
    *  4.  So  long  as  funds  made available by the New York state urban
  development  corporation,  pursuant  to  the  New   York   state   urban
  development corporation act, are used in financing, in whole or in part,
  any project under this article, all restrictions as to the amounts to be
  represented   by  mortgages,  mortgage  bonds,  mortgage  notes,  income
  debentures or capital shall be  inapplicable  to  such  projects  or  to
  housing  companies  undertaking such projects, provided however that any
  mortgage loan from the New York state urban development  corporation  to
  housing companies undertaking such projects shall not exceed ninety-five
  per centum of project cost, as certified by the commissioner.
  * NB (Effective until ruling by Internal Revenue Service)
    *  4.  So  long  as  funds  made available by the New York state urban
  development corporation or the New York state  housing  finance  agency,
  pursuant  to the New York state urban development corporation act or the
  New York state housing finance agency act, as the case may be, are  used
  in  financing,  in whole or in part, any project under this article, all
  restrictions as to the amounts to be represented by mortgages,  mortgage
  bonds,   mortgage   notes,   income   debentures  or  capital  shall  be
  inapplicable to such projects or to housing companies  undertaking  such
  projects,  provided  however  that  any  mortgage loan from the New York
  state urban development  corporation  or  the  New  York  state  housing
  finance  agency,  as  the  case may be, to housing companies undertaking
  such projects shall not exceed ninety-five per centum of  project  cost,
  as certified by the commissioner.
  * NB (Effective pending ruling by Internal Revenue Service)
    5. The capital structure of a housing company acquiring a project from
  a  company  organized  pursuant to article eleven of this chapter may be
  fixed by the  commissioner,  notwithstanding  any  limitations  in  this
  article  as  to the amount to be represented by mortgages, debentures or
  capital.