* § 2405-c. Purchase of new housing loans. (1) The agency is hereby
directed, to the extent it finds it practicable, to establish a program
whereby it purchases new housing loans from banks within the state
during periods when there is an inadequate supply of credit available
for new residential improvement loans or available for such loans at
carrying charges within the financial means of persons and families of
low or moderate income.

It is hereby found and declared that such activities by the agency
will alleviate a condition in this state which is contrary to the public
health, safety and general welfare and which has constituted in the past
and from time to time in the future can be expected to constitute a
public emergency. It is further found and declared that such purposes
are in all respects for the benefit of the people of the state of New
York and the agency shall be regarded as performing an essential
governmental function in carrying out its purposes and in exercising the
powers granted by this title.

(2) The agency shall purchase new housing loans from banks at such
prices and upon such terms and conditions as it shall determine;
provided, however, that each borrower receiving a housing loan purchased
by the agency shall be a person of low or moderate income and provided
further that the total purchase price, exclusive of any amounts
representing a refund of commitment or other fees paid by a bank to the
agency, for all housing loans which the agency commits to purchase from
a bank at any one time shall in no event be more than the total of the
unpaid principal balances thereof, plus accrued interest thereon.

(3) In conducting its program of purchasing new housing loans, the
agency shall not be governed or limited by the provisions of clause (i),
(ii) or (iii) of paragraph (b) of subdivision three of section
twenty-four hundred five of this title.

(4) The agency shall require as a condition of purchase of new housing
loans from banks that each such bank certify that each such new housing
loan is to an individual borrower and is in addition to the housing
loans such certifying bank otherwise would have made.

(5) Notwithstanding the maximum interest rate, if any, fixed by
section 5-501 of the general obligations law or any other law not
specifically amending or applicable to this section, the agency may set
the interest rate to be borne by new housing loans purchased by the
agency from banks at a rate or rates which the agency from time to time
shall determine to be at least sufficient, together with any other
available monies, to provide for the payment of its bonds and notes, and
new housing loans bearing such interest rate shall not be deemed to
violate any such law or to be unenforceable if originated by a bank in
good faith pursuant to an undertaking with the agency with respect to
the sale thereof notwithstanding any subsequent failure of the agency to
purchase the housing loan or any subsequent sale or disposition of the
housing loan by the agency to such bank or any other person.

(6) The agency shall require the submission to it by each bank from
which the agency has purchased new housing loans evidence satisfactory
to the agency of the making, and if applicable, the servicing, of such
new housing loans in conformity with such bank's undertaking with the
agency and in connection therewith may, through its employees or agents
or those of the department of financial services, inspect the books and
records of any such bank.

(7) Compliance by any bank with the terms of its agreement with or
undertaking to the agency with respect to the sale, and if applicable,
the servicing, of new housing loans may be enforced by decree of the
supreme court. The agency may require as a condition of purchase of new
housing loans from any national bank the consent of such bank to the
jurisdiction of the supreme court over any such proceeding. The agency
may also require agreement by any bank, as a condition of the agency's
purchase of new housing loans from such bank, to the payment of
penalties to the agency for violation by the bank of its undertakings to
the agency, and such penalties shall be recoverable at the suit of the
agency.

(8) The agency shall require as a condition of purchase of any new
housing loan from a bank that the bank represent and warrant to the
agency that:

(a) the unpaid principal balance of the housing loan and the interest
rate thereon have been accurately stated to the agency;

(b) the amount of the unpaid principal balance is justly due and
owing;

(c) the bank has no notice of the existence of any counterclaim,
offset or defense asserted by the mortgagor or any successor in
interest;

(d) the housing loan is evidenced and secured in the manner specified
in the bank's undertaking to the agency and all required loan documents
have been properly recorded with any appropriate public official;

(e) the housing loan is secured by the security described to the
agency subject only to liens, security interests and encumbrances
described to the agency;

(f) the borrower is not now in default in the payment of any
installment of principal or interest, escrow funds, real property taxes
or otherwise in the performance of his obligations under the loan
documents and has not to the knowledge of the bank been in default in
the performance of any such obligation for a period of longer than sixty
days during the life of the housing loan;

(g) the residential family dwelling unit improved, rehabilitated,
reconstructed or redeveloped with the proceeds of the housing loan is
covered by a valid and subsisting policy of insurance issued by a
company authorized by the superintendent of financial services to issue
such policies in the state of New York and providing fire and extended
coverage to the extent specified in the bank's undertaking to the
agency; and

(h) the housing loan is insured or guaranteed by the United States of
America or any agency thereof, or by a firm which is authorized by the
superintendent of financial services of the state of New York to issue
such policies in the state.

(9) Each bank shall be liable to the agency for any damages suffered
by the agency by reason of the untruth of any representation or the
breach of any warranty and, in the event that any representation shall
prove to be untrue when made or in the event of any breach of warranty,
the bank shall, at the option of the agency, repurchase the housing loan
for the original purchase price adjusted for amounts subsequently paid
thereon, as the agency shall determine.

(10) The agency need not require the recording or filing of an
assignment of any new housing loan purchased by it from a bank pursuant
to this section and shall not be required to notify the borrower of its
purchase of the housing loan. The agency shall not be required to
inspect or take possession of the loan documents if the bank from which
the new housing loan is purchased by the agency shall enter a contract
to service such housing loan and account to the agency therefor.

(11) Notwithstanding any other provision of law, the agency is
authorized to require, as a condition to the purchase from banks of new
housing loans, such restrictions upon assumability of the loan, default
provisions, rights to accelerate, and other terms applicable to new
housing loans made by banks pursuant to undertakings with the agency
with respect to the sale thereof as the agency may determine to be
necessary or desirable to assure the repayment of its bonds and notes
and the exemption from federal income taxes of the interest payable on
its bonds and notes. All such terms shall be enforceable by the
originating bank, the agency, and any successor holder of the housing
loan unless expressly waived in writing by or on behalf of the agency.

(12) In conducting its program of purchasing new housing loans, the
agency shall use its best efforts to work in conjunction with and
maximize the participation of programs operated by not-for-profit
corporations or charitable organizations for the improvement,
rehabilitation, reconstruction or redevelopment of one to four unit
residences.

* NB Repealed July 23, 2025