N.Y. Private Housing Finance Law § 27: Limitations

§ 27. Limitations. No company shall:

1. Acquire any real property or interest therein unless it shall first

have obtained from the commissioner or the supervising agency, as the

case may be, a certificate that such acquisition is necessary or

convenient for the public purpose defined in this article.

2. Pay interest upon its income debentures at a rate higher than six

per centum per annum except as otherwise provided in this article.

3. Issue its stock, income debentures and bonds covering any project

in an amount greater in the aggregate than the actual project cost.

4. Without first having obtained the written consent of the

commissioner or the supervising agency, as the case may be:

(a) Construct, reconstruct, rehabilitate, improve or alter any

project, or enter into any contract therefor.

(b) Sell, transfer or assign any real property, except that no such

consent shall be necessary in any sale in foreclosure as herein

provided.

(c) Except as otherwise provided in this article, encumber, lease or

rent all or any part of its real property.

(d) Enter into contracts for the operation of the project.

(e) Make a guaranty of payment.

(f) Voluntarily dissolve.

(g) Enter into contracts for the payment of salaries to officers or

employees.

5. Pay interest on its mortgage indebtedness at a rate higher than six

per centum per annum, or at such higher rates as may be approved by the

commissioner, or the supervising agency, as the case may be, but in no

event shall any such rate exceed the rate of interest prescribed by the

superintendent of financial services pursuant to section fourteen-a of

the banking law or, in the case of a mortgage loan insured or held by

the federal government, the rate approved by the federal government;

provided, however, that in the case of a company carrying out a state

urban development corporation project or in the case of an instrument or

instruments securing the residual indebtedness of a company, which

indebtedness is secured by a mortgage on the real property of a project,

such rate shall not exceed the rate of interest prescribed by the

superintendent of financial services pursuant to section fourteen-a of

the banking law or nine per centum per annum, whichever is the higher;

and further provided, however, that, in the case of a company that is a

mortgagor under a mortgage assigned to or acquired by the New York city

housing development corporation pursuant to subdivision twenty-one of

section six hundred fifty-four of this chapter and whose project is

aided by a subsidy from the federal government, such rate shall be the

rate of interest approved by the supervising agency. Notwithstanding the

foregoing provisions of this section, the rate of interest that a

company shall have the power to pay on that portion of its mortgage

indebtedness attributable to an investment or participation in a loan

made pursuant to subdivision one of section fifteen by an organization

or entity mentioned in such subdivision, shall be the rate of interest

approved by the commissioner or the supervising agency, as the case may

be.

6. Notwithstanding the provisions of subdivision five of this section

twenty-seven, a company, which has obtained a mortgage loan from the New

York city housing development corporation or the New York state housing

finance agency and where it is necessary for additional bonds or notes

to be issued by the New York city housing development corporation or the

New York state housing finance agency (i) in order to obtain funds to

fulfill the mortgage loan commitment to such company, as such commitment

may be amended or (ii) to refund or renew notes issued in fulfillment

thereof, for a project partially or temporarily financed by bonds or

notes issued, in the case of the New York city housing development

corporation, prior to the first day of August, nineteen hundred

seventy-five, and in the case of the New York state housing finance

agency, prior to the thirty-first day of December, nineteen hundred

seventy-five , may pay interest on that portion of its mortgage

indebtedness, the funds for which were obtained by the New York city

housing development corporation or the New York state housing finance

agency through the issuance of such additional or refunding bonds or

notes, at a rate not in excess of the cost of financing incurred by the

New York city housing development corporation or the New York state

housing finance agency, as the case may be, to issue such additional or

refunding bonds or notes, provided that, with respect to the New York

city housing development corporation, such corporation determines that

such cost of financing is reasonable and the commissioner or the

supervising agency, as the case may be, shall approve such cost of

financing.