§ 2406. Bonds and notes of the agency. (1) Subject to the approval of
the New York public authorities control board in accordance with the
provisions of chapter thirty-nine of the laws of nineteen hundred
seventy-six, as amended and subject to the provisions of section two
thousand four hundred seven of this title, the agency shall have the
power and is hereby authorized from time to time to issue its negotiable
bonds and notes in conformity with applicable provisions of the uniform
commercial code in such principal amounts as, in the opinion of the
agency, shall be necessary to provide sufficient funds for achieving the
corporate purposes thereof, including the purchase of mortgages from
banks, the payment of interest on bonds and notes of the agency,
establishment of reserves to secure such bonds and notes, the transfer
of money to the state as described in subdivision twenty-seven of
section twenty-four hundred four of this chapter, and all other
expenditures of the agency incident to and necessary or convenient to
carry out its corporate purposes and powers, except the operating
expenses of the agency.

(2) Except as may otherwise be expressly provided by the agency, all
bonds and notes issued by the agency shall be general obligations of the
agency, secured by the full faith and credit of the agency and payable
out of any moneys, assets, or revenues of the agency, subject only to
any agreement with bondholders or noteholders pledging any particular
moneys, assets or revenues.

(3) Bonds and notes shall be authorized by a resolution or resolutions
of the agency adopted as provided by this title; provided, however, that
any such resolution authorizing the issuance of bonds or notes may
delegate to an officer of the agency the power to issue such bonds or
notes from time to time and to fix the details of any such issues of
bonds or notes by an appropriate certificate of such authorized officer.

(4) Such bonds or notes shall bear such date or dates, shall mature at
such time or times, shall bear interest at such rate or rates, shall be
of such denominations, shall be in such form, carry such registration
privileges, be executed in such manner, be payable in lawful money of
the United States of America at such place or places within or without
the state, be subject to such terms of redemption prior to maturity as
may be provided by such resolution or resolutions or such certificate
with respect to such bonds or notes, as the case may be; provided,
however, that the maximum maturity of bonds shall not exceed forty years
from the date thereof and the maximum maturity of notes or any renewals
thereof shall not exceed seven years from the date of the original issue
of such notes.

(5) Any bonds or notes of the agency may be sold at such price or
prices, at public or private sale, in such manner and from time to time
as may be determined by the agency, and the agency may pay all expenses,
premiums and commissions which it may deem necessary or advantageous in
connection with the issuance and sale thereof. No bonds or notes of the
agency may be sold at private sale, however, unless such sale and the
terms thereof have been approved in writing by (a) the comptroller if
such sale is not to the comptroller and the comptroller is not then
serving as a director of the agency, or (b) the state director of the
budget, if such sale is to the comptroller or the comptroller is then
serving as a director of the agency.

(6) The agency is authorized to provide for the issuance of its bonds
or notes (including bonds, notes or other obligations the interest on
which is includable under the United States Internal Revenue Code of
nineteen hundred eighty-six, as amended, or any subsequent corresponding
internal revenue law of the United States, in the gross income of the
holders of the bonds to the same extent and in the same manner that the
interest on bills, bonds, notes or other obligations of the United
States is includable in the gross income of the holders thereof under
said Internal Revenue Code or any such subsequent law) for the purpose
of refunding any bonds or notes of the agency then outstanding,
including the payment of any redemption premiums thereon and any
interest accrued or to accrue to the redemption date next succeeding the
date of delivery of such refunding bonds or notes. The proceeds of any
such bonds or notes issued for the purpose of so refunding outstanding
bonds or notes shall be forthwith applied to the purchase or retirement
of such outstanding bonds or notes or the redemption of such outstanding
bonds or notes on the redemption date next succeeding the date of
delivery of such refunding bonds or notes and may, pending such
application, be placed in escrow to be applied to such purchase or
retirement or redemption on such date. Any such escrowed proceeds,
pending such use, may be invested and reinvested in obligations of or
guaranteed by the state or the United States of America, or in
certificates of deposit or time deposits secured in such manner as the
agency shall determine, or in obligations of any agency of the state or
the United States of America which may from time to time be legally
purchased by savings banks within the state as an investment of funds
belonging to them or in their control, or in obligations of the Federal
National Mortgage Association, maturing at such time or times as shall
be appropriate to assure the prompt payment, as to principal, interest
and redemption premium, if any, on the outstanding bonds or notes to be
so refunded by purchase, retirement or redemption, as the case may be.
The interest, income and profits, if any, earned or realized on any such
investment may also be applied to the payment of the outstanding bonds
or notes to be so refunded by purchase, retirement or redemption, as the
case may be. After the terms of the escrow have been fully satisfied and
carried out, any balance of such proceeds and interest, if any, earned
or realized on the investments thereof may be returned to the agency for
use by it in any lawful manner. All such bonds or notes shall be issued
and secured and shall be subject to the provisions of this title in the
same manner and to the same extent as any other bonds or notes issued
pursuant to this title.

(7) Whether or not the bonds and notes are of such form and character
as to be negotiable instruments under the terms of the uniform
commercial code, the bonds and notes are hereby made negotiable
instruments within the meaning of and for all the purposes of the
uniform commercial code, subject only to the provisions of the bonds and
notes for registration.

(8) Subject only to the provisions of sections two thousand four
hundred seven and two thousand four hundred eight of this title, any
resolution or resolutions authorizing any bonds or notes of the agency
may contain provisions which may be a part of the contract with the
holders of such bonds or notes, as to: (a) pledging or creating a lien,
to the extent provided by such resolution or resolutions, on all or any
part of any monies or property of the agency or of any moneys held in
trust or otherwise by others for the payment of such bonds or notes; (b)
otherwise providing for the custody, collection, securing, investment
and payment of any moneys of the agency; (c) the setting aside of
reserves or sinking funds and the regulation or disposition thereof; (d)
limitations on the purpose to which the proceeds of sale of any issue of
such bonds or notes then or thereafter to be issued may be applied; (e)
limitations on the issuance of additional bonds or notes, the terms upon
which additional bonds or notes may be issued and secured, and upon the
refunding of outstanding or other bonds or notes; (f) the procedure, if
any, by which the terms of any contract with the holders of bonds or
notes may be amended or abrogated, the amount of bonds or notes the
holders of which must consent thereto and the manner in which such
consent may be given; (g) the creation of special funds into which any
moneys of the agency may be deposited; (h) vesting in a trustee or
trustees such properties, rights, powers and duties in trust as the
agency may determine, which may include any or all of the rights, powers
and duties of the trustee appointed pursuant to section two thousand
four hundred nine of this title, and limiting or abrogating the right of
the holders of bonds or notes to appoint a trustee under such section or
limiting the rights, duties and powers of such trustee; (i) defining the
acts or omissions to act which shall constitute a default in the
obligations and duties of the agency and providing for the rights and
remedies of the holders of bonds or notes in the event of such default,
providing, however, that such rights and remedies shall not be
inconsistent with the general laws of this state and other provisions of
this title; and (j) any other matters of like or different character,
which in any way affect the security and protection of the bonds or
notes and the rights of the holders thereof.

(9) Any resolution or resolutions or trust indenture or indentures
under which bonds or notes of the agency are authorized to be issued may
contain provisions for vesting in a trustee or trustees such properties,
rights, powers and duties in trust as the agency may determine which may
include any or all of the rights, powers and duties of the trustee
appointed by the holders of any issue of notes or bonds pursuant to
section two thousand four hundred nine of this title, in which event the
provisions of said section two thousand four hundred nine authorizing
the appointment of a trustee by such holders of bonds or notes shall not
apply.

(10) It is the intention of the legislature that any pledge of
mortgages, housing loans, property, earnings, revenues or other moneys
made by the agency shall be valid and binding from the time when the
pledge is made; that the mortgages, housing loans, property, earnings,
revenues or other moneys so pledged and thereafter received by the
agency or its agent, including a servicing bank shall immediately be
subject to the lien of such pledge without any physical delivery thereof
or further act, and that the lien of any such pledge shall be valid and
binding as against all parties having claims of any kind in tort,
contract or otherwise against the agency or its agent, including a
servicing bank irrespective of whether such parties have notice thereof.
Neither the resolution nor any other instrument by which a pledge is
created need be recorded.

(11) Neither the members of the agency nor any person executing the
bonds or other obligations shall be liable personally on the bonds or
other obligations or be subject to any personal liability or
accountability by reason of the issuance thereof.