§ 655. Notes and bonds of the corporation. 1. (a) Subject to the
provisions of section six hundred fifty-six of this article, the
corporation shall have power and is hereby authorized to issue from time
to time its negotiable notes and bonds in conformity with applicable
provisions of the uniform commercial code in such principal amount as
the corporation shall determine to be necessary to provide sufficient
funds for achieving its corporate purposes, including the making of
mortgage loans, the payment of interest on notes and bonds of the
corporation, the establishment of reserves to secure such notes and
bonds, and the payment of all operating expenses of the corporation
incident to or necessary or convenient to carry out its corporate
purposes and powers.

(b) The corporation shall have the power, from time to time, to issue
(i) notes to renew notes and (ii) bonds to pay notes, including the
interest thereon and, whenever it deems refunding expedient, to refund
any bonds by the issuance of new bonds, whether the bonds to be refunded
have or have not matured, and to issue bonds partly to refund bonds then
outstanding and partly for any of its corporate purposes. The refunding
bonds may be exchanged for the bonds to be refunded or sold and the
proceeds applied to the purchase, redemption or payment of such bonds.

(c) Except as may otherwise be expressly provided by the corporation,
every issue of its notes and bonds shall be general obligations of the
corporation payable out of any revenues of the corporation, subject only
to any agreements with the holders of particular notes or bonds pledging
any particular revenues.

2. The notes and bonds shall be authorized by resolution or
resolutions of the corporation, shall bear such date or dates and shall
mature at such time or times as such resolution or resolutions may
provide, except that no note or any renewal thereof shall mature more
than five years, and in the case of any note or any renewal thereof
issued for the purposes of making mortgage loans shall mature more than
nine years, after the date of issue of the original note and no bond
shall mature more than fifty years from the date of its issue. The
bonds may be issued as serial bonds payable in annual installments or as
term bonds or as a combination thereof. The notes and bonds shall bear
interest at such rate or rates, be in such denominations, be in such
form, either coupon or registered, carry such registration privileges,
be executed in such manner, be payable in such medium of payment, at
such place or places, and be subject to such terms of redemption as such
resolution or resolutions may provide. The notes and bonds may be sold
by the corporation at public or private sale, at such price or prices as
the corporation shall determine; provided, however, that the corporation
shall consult with the comptroller as to the timing of any sale; and
provided further that no notes or bonds of the corporation may be sold
at a private sale unless such sale and the terms thereof have been
approved in writing by (a) the comptroller, where such sale is not to
the comptroller, or (b) the director of the budget, where such sale is
to the comptroller.

3. Any resolution or resolutions authorizing any notes or bonds or any
issue thereof may contain provisions, which shall be a part of the
contract or contracts with the holders thereof, as to:

(a) pledging all or any part of the revenues to secure the payment of
the notes or bonds or of any issue thereof, subject to such agreements
with noteholders or bondholders as may then exist;

(b) pledging all or any part of the assets of the corporation,
including mortgages and obligations securing the same, to secure the
payment of the notes or bonds or of any issue of notes or bonds, subject
to such agreements with noteholders or bondholders as may then exist;

(c) the use and disposition of the gross income from mortgages owned
by the corporation and payment of principal of mortgages owned by the
corporation;

(d) the setting aside of reserves or sinking funds and the regulation
and disposition thereof;

(e) limitations on the purpose to which the proceeds of sale of notes
or bonds may be applied and pledging such proceeds to secure the payment
of the notes or bonds or of any issue thereof;

(f) limitations on the issuance of additional notes or bonds; the
terms upon which additional notes or bonds may be issued and secured;
and the refunding of outstanding or other notes or bonds;

(g) the procedure, if any, by which the terms of any contract with
noteholders or bondholders may be amended or abrogated, the amount of
notes or bonds the holders of which must consent thereto, and the manner
in which such consent may be given;

(h) limitations on the amount of moneys to be expended by the
corporation for operating expenses of the corporation;

(i) vesting in a trustee or trustees such property, rights, powers and
duties in trust as the corporation may determine, which may include any
or all of the rights, powers and duties of the trustee appointed by the
bondholders pursuant to this article, and limiting or abrogating the
right of the bondholders to appoint a trustee under this article or
limiting the rights, powers and duties of such trustee;

(j) the acts or omissions to act which shall constitute a default in
the obligations and duties of the corporation to the holders of the
notes or bonds and providing for the rights and remedies of the holders
of the notes or bonds in the event of such default, including the right
to appointment of a receiver; providing, however, that such rights and
remedies shall not be inconsistent with the general laws of the state
and the other provisions of this article;

(k) any other matters, of like or different character, which in any
way affect the security or protection of the holders of the notes or
bonds.

3-a. Any resolution or resolutions authorizing any notes or bonds or
any issue thereof shall contain provisions, which shall be a part of the
contract or contracts with the holders thereof, ensuring that no
mortgage loan shall be made by the corporation from the proceeds of such
notes or bonds or issue thereof unless the estimated revenues from the
mortgaged property, including any subsidies, shall be sufficient in
amount to secure repayment of the loan and the interest thereon and to
pay all other necessary expenses of the mortgagor relating to such
property.

4. Any pledge made by the corporation shall be valid and binding from
the time when the pledge is made; the revenues or property so pledged
and thereafter received by the corporation shall immediately be subject
to the lien of such pledge without any physical delivery thereof or
further act, and 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 corporation, irrespective of whether such parties
have notice thereof. Neither the resolution nor any other instrument by
which a pledge is created need be recorded.

5. Neither the members of the corporation nor any other person
executing such notes or bonds shall be subject to any personal liability
or accountability by reason of the issuance thereof.

6. The corporation, subject to such agreements with noteholders or
bondholders as may then exist, shall have power out of any funds
available therefor, to purchase notes or bonds of the corporation, which
shall thereupon be cancelled, at a price not exceeding

(a) if the notes or bonds are then redeemable, the redemption price
then applicable plus accrued interest to the next interest payment date
thereon, or

(b) if the notes or bonds are not then redeemable, the redemption
price applicable on the first date after such purchase upon which the
notes or bonds become subject to redemption plus accrued interest to
such date.

7. In the discretion of the corporation, the bonds may be secured by a
trust indenture by and between the corporation and a corporate trustee,
which may be any trust company or bank having the powers of a trust
company in the state. Such trust indenture may contain such provisions
for protecting and enforcing the rights and remedies of the bondholders
as may be reasonable and proper and not in violation of law, including
covenants setting forth the duties of the corporation in relation to the
exercise of its corporate powers and the custody, safeguarding and
application of all moneys. The corporation may provide by such trust
indenture for the payment of the proceeds of the bonds and the revenues
to the trustee under such trust indenture or other depository, and for
the method of disbursement thereof, with such safeguards and
restrictions as it may determine. All expenses incurred in carrying out
such trust indenture may be treated as a part of the operating expenses
of the corporation. If the bonds shall be secured by a trust indenture,
the bondholders shall have no authority to appoint a separate trustee to
represent them.

8. Whether or not the notes and bonds are of such form and character
as to be negotiable instruments under the terms of the uniform
commercial code, the notes and bonds 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 notes and
bonds for registration.