N.Y. Private Housing Finance Law § 78: Consideration for capital and bonds

§ 78. Consideration for capital and bonds. No housing company which is

a corporation shall issue shares, nor shall a housing company which is a

partnership credit sums to the partners on capital account, nor shall a

housing company which is a trust subject amounts to the trust, and no

housing company shall issue bonds or income debentures, except for money

or property actually received for the use and lawful purposes of the

housing company, provided, however, that a mutual housing company may

issue shares for home owners purchase notes if the purchase transaction

has received the written endorsement of the commissioner in accordance

with supplementary rules and regulations of the commissioner made

therefor and if at least two hundred dollars in money or property is

received by such mutual housing company toward the issuance of such

shares. The consideration for all capital, bonds or income debentures

based upon property received shall equal a valuation approved by the

commissioner and such valuation shall be used in computing actual or

estimated cost.

In no event shall the capital of, and income debentures issued by, the

housing company be less than the total of twenty per centum of the

actual cost, as defined in this article, of any project or projects

undertaken pursuant to this article.

The commissioner may permit capital to be increased, or income

debentures to be issued, to an amount not exceeding three per centum of

the estimated total cost, or three per centum of the actual cost, if

actual cost should exceed estimated cost, of a project for working

capital to be used in connection with such project.