(a) To issue and sell for cash capital stock of the corporation.
(b) To issue and sell its debentures bearing such interest rates and
having such maturities and other terms and provisions as may be
determined by the board of directors of the corporation.
(c) To invest in bonds and mortgages or notes and mortgages upon
improved and unencumbered real property in areas in this state
designated by the board of directors of the corporation as blighted,
over-crowded, or deteriorating areas, subject to the following
conditions:
(i) The board of directors shall be satisfied with respect to each
loan that it is economically sound.
(ii) No such loan shall be in an amount in excess of eighty per centum
of the corporation's appraised value of such real property, except that
such loan may exceed eighty per centum when guaranteed or insured by the
federal government or any agency thereof.
(iii) Any appraisal of such property shall be based on its long-term
economic value with due consideration being given, among other factors,
to its physical maintenance and, in the case of income-producing
properties, to its stabilized rental value after adequate vacancy
allowances. Except in cases of new construction no appraisal of an
income-producing property shall be undertaken by the corporation unless
it has first been supplied by the loan applicant with a current rent
roll and statement of income and expense for the twelve-month period
preceding the date of the loan application, certified by such loan
applicant and in form and substance satisfactory to the corporation.
(iv) No loan shall be made on any existing housing accommodation
unless (a) such housing accommodation is in physical condition
satisfactory to the corporation or (b) the loan applicant is committed
to restore such housing accommodation to satisfactory condition prior to
the loan closing, or, at the discretion of the corporation, within a
specified period after closing, out of the proceeds of the loan.
(v) No loan shall be made on a housing accommodation unless (a) such
housing accommodation has a suitable heating system satisfactory to the
corporation, or (b) the loan applicant is committed to install suitable
heating facilities out of the proceeds of such loan.
(vi) Any such loan shall be for one or more of the following purposes
only:
A. To finance the improvement or rehabilitation of an existing housing
accommodation.
B. To consolidate, refinance or liquidate existing mortgage
indebtedness on a housing accommodation.
C. To finance the bona fide purchase of a housing accommodation,
provided that except in cases of loans insured or guaranteed by the
federal government or any agency thereof, the purchaser of the real
property which is to constitute the security for the proposed loan has
paid to the seller in cash an amount equal to at least twenty per centum
of the purchase price of such real property.
D. To finance the construction of new housing accommodations.
(vii) The board of directors of the corporation shall cause to be
included in each mortgage the following protective provisions and
restrictions (in addition to those contained in the statutory form M
mortgage with lien covenant as contained in section two hundred
fifty-eight of the real property law), provided that any and all of the
said provisions and restrictions may be waived by the corporation where
the corporation is purchasing or otherwise acquiring an already existing
mortgage:
A. A provision requiring the mortgagor to obtain the prior written
consent of the holder of the first mortgage to the creation of any
junior liens, charges or encumbrances affecting the real property. In
its sole and absolute discretion the corporation may modify or waive the
inclusion of this provision in any mortgage.
B. A provision requiring the mortgagor to accumulate and maintain with
the holder of the first mortgage, so long as the mortgage is held by it,
a fund for the proper repair and maintenance of the mortgaged premises.
The amount and type of such fund and conditions under which it shall be
accumulated, applied and replenished shall be specified in the mortgage.
Such fund may be applied from time to time to the repair or maintenance
of the property by the mortgagor with the written consent of the holder
of the first mortgage. Such fund shall be applied by the mortgagor at
the direction of such holder, when such application is deemed necessary
by such holder for the reasonable protection of the property. In its
sole and absolute discretion the corporation may waive the inclusion of
this provision in any mortgage.
C. A provision permitting the mortgagor to repay the principal amount
of the loan or any part thereof at any time without penalty, except that
the mortgage may, in the discretion of the board of directors, contain a
provision for a prepayment penalty not exceeding two per centum of any
amount repaid within three years after the closing of the loan in
addition to such regular repayments without penalty as may be provided
in the mortgage.
(viii) No loan shall be made by the corporation unless the real
property which is to secure such loan is, or upon application of the
loan proceeds will be, unencumbered, and the corporation shall have been
furnished with satisfactory evidence that such real property is or upon
application of the loan proceeds will be in compliance with all
applicable laws, ordinances and regulations of governments, whether
federal, state, county or municipal, or agencies or instrumentalities
thereof, having jurisdiction.
(ix) Such other and further conditions as the board of directors in
its sole and absolute discretion may deem advisable in the interest of
conducting the affairs of the corporation in accordance with sound
economic and mortgage lending principles.
(x) The mortgage shall provide that violation of any of the foregoing
conditions by the mortgagor shall constitute an event of default,
entitling the holder of the first mortgage to accelerate maturity of the
mortgage obligation.
(xi) The mortgage shall provide for maturity of the loan and
amortization thereof at such rate as shall be deemed appropriate by the
board of directors in accordance with sound mortgage lending practice,
provided that except in cases of loans insured or guaranteed by the
federal government or any agency thereof, no mortgage shall have a
maturity in excess of twenty years from the date of closing.
(xii) The enumeration herein, or in any lending rules or regulations
promulgated by the corporation, of conditions or criteria relating to
the granting of any mortgage loan shall impose no obligation on the
corporation to grant any application for a loan which fulfills such
conditions or criteria. The authority of the corporation to decline any
loan application for any reason whatsoever shall be absolute and
unconditional.
(xiii) Nothing contained in this article shall be construed as
signifying a legislative intent to define what constitutes prudent
lending practice for banking, insurance or other organizations.
(d) To sell without recourse bonds and mortgages or notes and
mortgages acquired pursuant to subdivision three (c) of this section, at
such prices and upon such terms and conditions as the board of directors
of the corporation shall determine; to service or continue to service
such bonds and mortgages and to manage such properties for any of its
members, provided that if the purchaser be a member, the said bond and
mortgage or note and mortgage is in all respects eligible for investment
by the particular member purchasing the same.
(e) To acquire, subscribe for, own, hold, sell, assign, transfer,
pledge or otherwise dispose of obligations of the United States with
maturities not in excess of three years.
(f) For the purpose of protecting its interests, to release any
obligation to pay or guarantee the payment of principal or interest, or
otherwise to waive or modify any of the terms and conditions of any bond
and mortgage, and of any note and mortgage, and to extend or re-extend
any bond and mortgage, and any note and mortgage, and to accept a sum
less than the principal amount thereof in the full payment and
satisfaction of the same.
(g) In addition to interest rates within legal limits the corporation
may impose a service charge upon the mortgagor or owner which shall not
exceed two per centum of the total amount of the loan.
(h) To apply for status as an approved mortgagee under the national
housing act and to act as a mortgagee under said act.
4. The corporation shall have the power to purchase, receive, hold,
lease or otherwise acquire, and to sell, convey, mortgage, lease, pledge
or otherwise dispose of, upon such terms and conditions as its board of
directors may deem advisable, real and personal property, together with
such rights and privileges as may be incidental and appurtenant thereto
and the use thereof, including, but not restricted to, any real or
personal property acquired by such corporation, from time to time in the
satisfaction of debts or enforcement of obligations, provided that the
corporation may purchase or acquire only the following real estate:
(a) Plots whereon there are or may be erected buildings suitable for
the convenient transaction of the business of the corporation.
(b) Such real property as shall be conveyed to it in satisfaction of
debts previously contracted in the course of its business.
(c) Such real estate as it shall purchase at sales under judgments,
decrees or mortgages held by it.
(d) In lieu of instituting an action to foreclose a mortgage lien, the
corporation may purchase a deed to the underlying real property.