§ 15. Participation by certain corporations and individuals. 1. (a)
One or more banking organizations, foundations, labor unions, employers'
associations, veterans' organizations, colleges, universities,
educational institutions, child care institutions, hospitals, medical
research institutes, insurance companies, trustees, fiduciaries or any
combination of the foregoing, shall have the power to organize a company
pursuant to the provisions of this article, and to purchase for cash or
to receive and hold in exchange for property, and to own the bonds of a
company and to invest, singly or jointly, or with the state or a
municipality or the New York state housing finance agency or the New
York city housing development corporation in a bond or note and single
participating mortgage, or in separate bonds or notes and mortgages, in
an amount not 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, child care institution, or hospital 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 persons of low income or in the case of a
low income non-profit housing company such investment shall not be
greater than the total project cost. Where one or more banking
organizations, foundations, labor unions, employers' associations,
veterans' organizations, colleges, universities, educational
institutions, child care institutions, hospitals, medical research
institutes, insurance companies, trustees, fiduciaries, or the state or
a municipality or the New York state housing finance agency or the New
York city housing development corporation, shall participate in a loan
to a company secured by a single participating mortgage or by separate
mortgages, 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. Banking
organizations, foundations, labor unions, employers' associations,
veterans' organizations, colleges, universities, educational
institutions, child care institutions, hospitals, medical research
institutes, insurance companies, trustees, fiduciaries or groups
thereof, may exercise any such power on such conditions, however, as to
banking organizations and as to insurance companies only to the extent
and upon such conditions as may be authorized by the state
superintendent of financial services. As used in this subdivision, the
terms "trustees" and "fiduciaries" shall include any fiduciary or
fiduciaries holding funds for investment, and the term "banking
organizations" shall have the same meaning as in subdivision eleven of
section two of the banking law.

(b) Notwithstanding the provisions of paragraph (a) of this
subdivision or of any general, special or local law, for the purpose of
completing the financing of project cost, in the event that a
municipality has made or contracted to make a loan to a company or to a
public benefit corporation to provide moneys to finance the project cost
of a project (1) the construction of which commenced prior to December
first, nineteen hundred seventy-five, (2) for which a temporary or
permanent certificate of occupancy was not issued prior to January
first, nineteen hundred seventy-three, and (3) which is assisted by a
contract with the secretary of housing and urban development of the
United States pursuant to section two hundred thirty-six of the national
housing act, as amended, covering all dwelling units therein, one or
more banking organizations as defined in paragraph (a) of this
subdivision, foundations, labor unions, credit unions, employers'
associations, veterans' organizations, colleges, universities,
educational institutions, child care institutions, hospitals, medical
research institutes, insurance companies, trustees or fiduciaries as
defined in paragraph (a) of this subdivision, trustees of pension and
retirement funds and systems, corporations, partnerships, individuals,
or other entities or any combination of the foregoing shall have the
power to participate in such loan or make or participate in a new loan
secured by a bond or note and a single participating mortgage, or by
separate bonds or notes and separate mortgages, or to invest, singly or
jointly, with the municipality in a bond or note and single
participating mortgage or in separate bonds or notes and mortgages, upon
such terms and conditions as may be approved by the supervising agency,
including but not limited to provisions providing that (i) priority may
be given to the payment of the principal of and interest on that portion
of the mortgage indebtedness attributable to participation in a loan or
an investment made by one or more of such entities or organizations,
(ii) the interest of the municipality created as a result of making a
mortgage loan may be subordinated to the interest that one or more of
such organizations or entities may have upon such participation or
investment, (iii) the interest of each upon such participation or
investment need not be of equal priority as to lien, nor be equal as to
interest rate, time or rate of amortization of principal or time of
payment of interest, or otherwise, provided, however, that the aggregate
amount of the loan or loans or investment made by one or more of such
organizations or entities shall not exceed thirty per centum of total
project cost and, further provided that the aggregate amount of the loan
or loans to a company does not exceed such amount as is authorized
pursuant to paragraph (a) of this subdivision. All or part of the
proceeds of such participation or investment pursuant to this paragraph
(b) may be applied to reduce or prepay the loan made by the
municipality. The provisions of subdivisions one and five of section
twenty-six of this article shall not apply to such participation in a
loan or investment pursuant to this paragraph (b) if undertaken in
connection with a project theretofore approved pursuant to said section
twenty-six.

Notwithstanding the provisions of this article or of any general,
special or local law, in the event that a municipality has made a loan
pursuant to this article prior to any participation pursuant to this
paragraph, the supervising agency shall have the power, upon the
mortgagor's consent, to modify the terms and conditions of the original
bond or bonds or note or notes and mortgage and any other documents
executed in connection with such initial loan, as the supervising agency
may deem necessary or desirable, to provide for such participation,
including but not limited to modification of the rate and time of
payment of the interest on the initial loan or rate of amortization of
principal thereof, and provision for the additional borrowing cost, if
any, with respect to that portion of the mortgage indebtedness
attributable to such participation, provided, that except to the extent
of any increase in the maximum principal amount of the original mortgage
loan, with regard to a company that has obtained a temporary or
permanent certificate of occupancy for part or all of a project financed
by a loan pursuant to this article before such participation in a loan
or investment is made, the sum of the payments of interest and principal
on the mortgage loan or loans which the company is obligated to make in
any year as a result of such modification and participation in a loan or
investment made pursuant to this paragraph, shall not exceed the sum of
the payments of interest and principal that such company would have been
obligated to make in such year under the original mortgage loan
agreement if the project had been fully financed under the original
mortgage loan agreement by the municipality at an interest rate equal to
the maximum rate per annum prescribed by the superintendent of financial
services pursuant to section fourteen-a of the banking law as of
December nineteenth, nineteen hundred seventy-five, or such higher rate
of interest as the secretary of housing and urban development of the
United States shall approve pursuant to an agreement to make interest
reduction payments pursuant to section two hundred thirty-six of the
national housing act, as amended, with respect to such project and that
the rental or carrying charges in such projects shall not be increased
as a result of such participation in a loan or investment and further
provided, that the company shall not seek or accept from the
municipality any subsidy, direct or indirect, excluding existing tax
exemption, to offset any increased borrowing costs, if any.

(c) Where the state or a municipality shall join with one or more
organizations of the kind hereinabove mentioned, in making a loan
secured by a single participating mortgage or by separate mortgages, the
state or a municipality is authorized, through the commissioner of
housing, or the supervising agency, as the case may be, to make
provision, either in the mortgage or mortgages or by separate agreement,
for the performance of such services as are generally performed by a
banking institution or insurance company which itself owns and holds a
mortgage or by a trustee under a trust mortgage. The commissioner and
the supervising agency are hereby authorized to act as trustee or to
consent to the appointment of a banking institution to act in such
capacity. Any agreement made by the commissioner under this provision
shall be subject to the approval by the state comptroller and the
attorney general as to form.

(d) In connection with any participation in a loan or investment
pursuant to paragraph (b) of this subdivision the municipality shall
have the power to assign or pledge, in whole or in part, to one or more
of the organizations or entities participating in such loan its right,
title and interest in and to any mortgage held pursuant to this article
and any contract or arrangement for the payment of subsidy with respect
to such loan and the right to receive and apply to repayment of such
loan and the interest thereon any payments made under such mortgage or
under such contract or arrangement.

2. Notwithstanding any other provision of law, any banking institution
or insurance company or a group thereof operating a company, or owning
all of the bonds of a company may exercise all the powers conferred by
this section and may enter into contracts contemplated by this article
and agree with the commissioner not to sell, assign, or otherwise
transfer such project or bonds or bond and mortgage or interest therein
of such company provided for pursuant to this article without the
consent of the commissioner.