§ 177-c. Investment in mortgage pass-through certificates.
Notwithstanding the provisions of section one hundred seventy-seven, or
of section one hundred seventy-eight of this article, the trustees of
any fund may invest in mortgage pass-through certificates. As used in
this section, the term "mortgage pass-through certificates" shall mean
certificates evidencing ownership of undivided interests in pools of
mortgage loans secured by first mortgages on real property located in
this state improved by one-to-four family residential dwellings,
provided, however, that (i) such mortgage loans are originated on or
after January first, nineteen hundred eighty by any bank, trust company,
national banking association, savings bank, federal mutual savings bank,
savings and loan association, federal savings and loan association,
credit union, or federal credit union authorized to do business in this
state or by any lender approved by the secretary of housing and urban
development for participation in any mortgage insurance program under
the National Housing Act, (ii) such mortgage loans are assigned to a
bank, trust company, federal mutual savings bank or federal savings and
loan association as trustee for the benefit of the holders of such
certificates and, (iii) such certificates are rated within the three
highest grades by an independent rating service designated by the
superintendent of financial services. In no event shall the aggregate
unpaid principal on conventional mortgages securing mortgage
pass-through certificates exceed ten percent of the assets of such fund
nor shall the total unpaid principal on any single pool of conventional
mortgages securing mortgage pass-through certificates exceed one percent
of the assets of a fund. Mortgage loans secured by first mortgages on a
condominium unit designed for residential use, together with its common
interest, may be included in pools of mortgage loans provided for above.