§ 5. Loans pursuant to the "Servicemen's Readjustment Act of 1944." 1.
Subject to such regulations and restrictions as the superintendent of
financial services finds to be necessary and proper, (i) any loan at
least twenty per centum of which is guaranteed under title three of an
act of congress entitled the "Servicemen's Readjustment Act of 1944,"
may be made or invested in by any banking organization having the power
to make loans, and the savings and loan bank of the state of New York,
and (ii) any bank or trust company may make any loan made on the
security of a loan or loans eligible under the preceding subparagraph
(i), without regard to the limitations and restrictions of this chapter;
provided however, that

(a) No such loan upon the security of real estate shall be made or
invested in if the amount of such loan exceeds the appraised value of
such real estate, as improved or to be improved by the application of
the proceeds of such loan, or if the amount of such loan, when added to
the amount unpaid upon prior mortgages, liens and encumbrances upon such
real estate, exceeds such appraised value. Such appraised value shall be
determined by an appraiser appointed pursuant to policies established by
the board of directors or trustees of the corporation making or
investing in such loan, or, in the case of a private banker, shall be
determined by the private banker or by an appraiser appointed pursuant
to policies established by such private banker;

(b) Each such loan, if secured by real property, shall be subject to
the provisions of this chapter relating to the recording of mortgages
and assignments of mortgages upon real property;

(bb) The requirements of the foregoing paragraphs (a) and (b) shall
not apply when not less than ten such mortgages are assigned as security
for a loan made under paragraph (ii), providing the term of such loan
does not exceed twelve months;

(c) Each such loan shall be subject to the provisions of this chapter
prescribing the maximum limits, in amount, of (1) loans in the aggregate
to, or upon the net liability of, any one individual and (2) loans in
the aggregate secured by real property;

(d) Each such loan made or invested in by a savings bank, a savings
and loan association, or the savings and loan bank of the state of New
York shall be subject to the following additional provisions: (1) a loan
pursuant to section five hundred one, five hundred two or five hundred
three of the "Servicemen's Readjustment Act of 1944," for the purpose of
repairing, altering or improving a building or buildings, and a loan
pursuant to section five hundred five (a) of such act, need not be
secured by a lien on real property, but all other loans pursuant to such
act must be secured by a first lien on such property; and (2) in the
case of each loan for the acquisition or benefit of, or secured by, real
property, such real property must, if located without the state of New
York, be located, in the case of a savings bank, within twenty-five
miles of the principal office of such savings bank; in the case of a
savings and loan association, within fifty miles of the principal office
of such association; and, in the case of the savings and loan bank of
the state of New York, within fifty miles of the principal office of
such bank or the principal office of one of its member savings and loan
associations; except that, if the amount of a loan secured by real
property, after deducting therefrom the amount thereof which is
guaranteed pursuant to such act, is in excess of two-thirds of the
appraised value of such real property, as determined in accordance with
paragraph (a) of this subdivision, such real property must be located
within the state of New York and, in the case of a savings bank or a
savings and loan association, within one hundred miles of the principal
office of any such corporation which makes, and any such corporation
which invests in, such loan; and except that, in the case of a loan
pursuant to section five hundred five (a) of such act, the real property
for the acquisition or benefit of which such loan is made may be located
within the applicable and prescribed limits of this chapter as to the
location of real property securing a loan insured by the federal housing
commissioner.

(e) The authority provided in this subdivision to invest in any loan
secured by real property guaranteed pursuant to the provisions of the
act of congress entitled the "Servicemen's Readjustment Act of 1944",
shall include authority to acquire title to real property in connection
with investing in an installment contract for the sale of real property,
so guaranteed, where the purchaser under such contract is in possession
and control of the property, and title is acquired by the banking
organization solely as security for the obligations of the purchaser.

2. In complying with the provisions of this chapter which prescribe
the maximum limits, in amount, of loans in the aggregate to, or upon the
net liability of, any one individual, and loans in the aggregate secured
by real property, a banking organization or the savings and loan bank of
the state of New York may deduct from the total amount of each loan made
or invested in by it that portion of such loan which is guaranteed
pursuant to the "Servicemen's Readjustment Act of 1944", and, in the
case of each loan made or invested in by it which is secured by a loan
which is guaranteed pursuant to said act, may deduct that portion which
is equal to the portion of such security which is so guaranteed.

3. The foregoing provisions of this section shall not apply to loans
insured pursuant to section five hundred eight of the "Servicemen's
Readjustment Act of 1944," but the superintendent of financial services
shall have power to authorize banking organizations and the savings and
loan bank of the state of New York to make and invest in such loans upon
such terms and conditions as it shall prescribe. Nothing contained in
this section shall prevent loans guaranteed or insured pursuant to the
"Servicemen's Readjustment Act of 1944" from being made or invested in
under, and subject to the limitations and restrictions of, other
provisions of this chapter.