§ 111. Mortgages and mortgage bonds. Any redevelopment company,
subject to the approval of the supervising agency, may borrow funds and
secure the repayment thereof by bond and mortgage or by an issue of
bonds under a trust indenture. Each mortgage or issue of bonds of a
redevelopment company shall relate only to a single specified project
and to no other and such bonds shall be secured by mortgage upon all of
the real property of which such project consists.

First lien bonds of such redevelopment company when secured by a
mortgage not exceeding ninety per centum of the estimated cost prior to
the completion of the project, and in no event exceeding ninety per
centum of the actual cost upon such completion, as certified by the
supervising agency, or, in the case of a completed project, not
exceeding ninety per centum of the appraised value or such previously
certified actual cost, whichever is less, are hereby declared securities
in which all public officers and bodies of the state and of its
municipal subdivisions, all insurance companies and associations, all
savings banks and savings institutions, including savings and loan
associations, executors, administrators, guardians, trustees and all
other fiduciaries in the state may properly and legally invest the funds
within their control.

First lien bonds of such a redevelopment company issued under a trust
indenture and pursuant to a building loan contract, or a building loan
bond and building loan mortgage under which advances are made pursuant
to a building loan contract, where the aggregate principal amount to be
issued or advanced does not exceed ninety per centum of the estimated
cost prior to the completion of the project, and in any event does not
exceed ninety per centum of the actual cost upon such completion, as
certified by the supervising agency, are hereby declared securities in
which all banks, savings banks, savings institutions and trust companies
in addition to all such officers, bodies, companies, associations,
institutions and fiduciaries may properly and legally invest the funds
within their control; provided, however, that such investment is made as
a construction loan with a maturity of not to exceed two years. The
maturity of any such construction loan may be extended from time to time
with the approval of the board of directors or trustees of the bank,
savings banks, savings institutions or trust company holding such loan
but no one such extension shall be for a period of time exceeding six
months.

The bonds so issued and secured and the mortgage or trust indenture
relating thereto, may create a first or senior lien and a secondary or
junior liens upon the real property embraced in any project; provided,
however, that the total mortgage liens shall not exceed ninety per
centum of the estimated cost prior to the completion of the project, and
shall not in any event exceed ninety per centum of the actual cost upon
such completion, or, in the case of a completed project, not exceeding
ninety per centum of the appraised value or such previously certified
actual cost, whichever is less. Such bonds and mortgages or trust
indentures may contain such other clauses and provisions as shall be
approved by the supervising agency, including the right to assignment of
rents and entry into possession in case of default and including in the
case of a redevelopment company which is a partnership or trust the
right of the partners or trustees, as the case may be, to be free of any
personal liability thereunder; but the operation of the housing project
in the event of such entry by mortgagee or receiver shall be subject to
regulations promulgated by the supervising agency. Provisions for the
amortization of the bonded indebtedness of companies formed under this
article shall be subject to the approval of the supervising agency. So
long as funds made available by the federal government or any
instrumentality thereof or any mortgage or mortgage bonds, insured by
the federal housing administrator or any other instrumentality of the
federal government are used in financing, in whole or in part, any
project under this article, the capital structure of a redevelopment
company undertaking such project and the proportionate amount of the
cost of the lands and improvements to be represented by mortgages or
bonds shall be entirely in the discretion of the supervising agency; and
all restrictions as to the maturity of any construction loan and as to
the amounts to be represented by mortgages, mortgage bonds, income
debentures or capital shall be inapplicable to such projects or to
redevelopment companies undertaking such projects, except that the
bonds, mortgages, debentures and capital covering any project shall not
exceed the total actual final cost of such project as defined in
subdivision two of section one hundred twelve of this article.

Interest rates on mortgage indebtedness shall not exceed the greater
of

(a) six percentum per annum,

(b) the rate prescribed by the superintendent of financial services
pursuant to section fourteen-a of the banking law,

(c) the rates of mortgages or mortgage bonds insured by the federal
housing administration or any other instrumentality of the federal
government and

(d) such rate as may be approved by the supervising agency provided,
however, that the applicable rate for purposes of paragraphs (b), (c)
and (d), of this section one hundred eleven shall be the rate applicable
or approved at the time the redevelopment company incurs the mortgage
indebtedness.

As used in this section the term "bond" includes a note heretofore or
hereafter made.