§ 22. State loans. 1. The commissioner may enter into contracts for
loans to a company. All such contracts shall be subject to approval by
the state comptroller and by the attorney general as to form.

2. Loans by the state under such a contract shall be secured by a
first mortgage lien, and no such loan shall be made in an amount greater
than ninety-five per centum of the total project cost in the case of a
mutual company, urban rental company or a non-profit company
incorporated pursuant to the provisions of the not-for-profit
corporation law and this article for the purpose of providing housing
for staff members, employees or students of a college, university,
hospital or child care institution and their immediate families and in
the case of a non-profit company incorporated pursuant to the
not-for-profit corporation law and this article for the purpose of
providing housing for aged or handicapped persons of low income or in
the case of a low income non-profit housing company such loans shall not
be made in an amount greater than the total project cost. In case of a
loan in an amount greater than ninety-five per centum of the total
project cost, the commissioner may in his discretion require
satisfactory independent guarantees that the loan will be repaid
according to the terms of the company's bond or note and mortgage.
Notwithstanding any other provisions of law, if the company proposes to
sell or convey any part or parts of the mortgaged premises prior to the
sale by the state of the definitive bonds providing the funds for the
state loan, the comptroller, upon the application of the company and
with the prior written consent of the commissioner, may release from the
first mortgage lien any part or parts of the mortgaged premises not
acquired through condemnation and not required for the project, provided
that any net proceeds from the sale or conveyance of the said property
will be held by the company for the sole purpose of reducing, in
accordance with the requirements of the commissioner and comptroller,
the principal amount of the state loan outstanding, and provided further
that the unpaid principal amount of the state loan then outstanding, as
it may be reduced by the net proceeds, if any, derived from the sale or
conveyance, would not be in an amount greater than ninety-five per
centum of the total project cost and in the case of a non-profit company
incorporated pursuant to the provisions of the not-for-profit
corporation law and this article for the purpose of providing housing
for aged or handicapped persons of low income or in the case of a low
income non-profit housing company such amount shall not be greater than
the total project cost. The comptroller shall execute such release in
the usual form, which, when acknowledged, shall be recorded by the
county clerk and a minute thereof made upon a margin of the mortgage. A
company may, with the prior written consent of the commissioner, and
subject to the approval of the state comptroller and to the provisions
of any contract with noteholders and bondholders, lease any property not
acquired through condemnation and not required for the project, and may
apply the income of such lease to any use authorized for any other
rental income. Such lease shall contain restrictions to protect and
preserve the project.

3. The commissioner may make temporary loans or advances to a company
in anticipation of any permanent loans and no such temporary loans or
advances shall be deemed to constitute part of such permanent loans
unless such temporary loans or advances have been made out of the
proceeds of definitive housing bonds sold by the state pursuant to
chapters four hundred seven of the laws of nineteen hundred fifty-five
and nine hundred fifty-six of the laws of nineteen hundred fifty-eight.

4. The state shall have the power to invest jointly with the New York
state housing finance agency in a bond or note and single participating
mortgage, or in separate bonds or notes and mortgages of a company
organized pursuant to the provisions of this article. The interest of
each shall have equal priority as to lien in proportion to the amount of
loan so secured, but need not be equal as to interest rate, time or rate
of amortization or otherwise. In such a case the state, through the
commissioner of housing, is authorized to make provision, either in the
mortgage or mortgages or by separate agreement, for the performance of
such services as are generally performed by the New York state housing
finance agency itself owning and holding a mortgage. Any agreement made
by the commissioner under this subdivision shall be subject to the
approval of the state comptroller and the attorney general as to form.