§ 2874. Loans. 1. Any eligible borrower may, subject to the approval
of the commissioner, borrow funds from the agency and the repayment
thereof may be secured by bond or note and mortgage or other agreement
which shall contain such terms and conditions as may be deemed necessary
or desirable by the agency or required by any agreement between the
agency and the holders of its notes and bonds, including the right to
assignment of rates and charges and entry into possession in case of
default, but the operation of such project, in the event of such entry,
shall be subject to regulations promulgated by the commissioner.

2. The agency may make contracts to make loans to an eligible borrower
in an amount not to exceed the total project cost. Any such loan which
constitutes a mortgage loan as defined in the New York state medical
care facilities finance agency act shall be secured by a first mortgage
lien upon all the real property and improvements of which the project
consists and upon all personal property attached to or used in
connection with the operation of the project. In the case of a mortgage
loan in an amount greater than ninety 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 bond or note and mortgage of the eligible borrower. Any
mortgage loan may be further secured by such a lien upon other real
property owned by the eligible borrower. Notwithstanding the foregoing
provisions of this subdivision or any other provision of this article to
the contrary, any personal property may be excluded from the lien of the
mortgage securing such a mortgage loan, provided (a) the commissioner
finds that such property is not essential for the rendition of required
hospital services as such term is defined in article twenty-eight of
this chapter, and (b) the agency consents to such exclusion.

3. In connection with assistance grants which are made by the state,
federal government or a municipality to reimburse the eligible borrower
for project costs which have been paid for by such eligible borrower
from the proceeds of a loan or such other funds which are legally made
available to the eligible borrower, the eligible borrower shall hold and
apply such assistance grants in accordance with the requirements of the
commissioner and the agency.

4. Any inconsistent provision of law to the contrary notwithstanding,
mortgages of an eligible borrower shall be exempt from the mortgage
recording taxes imposed by article eleven of the tax law.

5. The dormitory authority of the state of New York and the New York
state urban development corporation are each hereby authorized to issue
bonds in one or more series pursuant to article 5-C or article 5-F of
the state finance law for the purpose of refunding outstanding secured
hospital project bonds, as defined in subdivision three-a of section
twenty-eight hundred seventy-two of this article, and to finance one or
more related debt service reserve funds and to pay costs of issuance
attributable to such refunding bonds.