N.Y. Real Property Law § 339-ff: Mortgage investments on units by state agencies, insurers, banking organizations and fiduciaries; limitation to first mortgages

§ 339-ff. Mortgage investments on units by state agencies, insurers,

banking organizations and fiduciaries; limitation to first mortgages.

(a) The following persons: (1) public officers, bodies of the state,

municipalities, and municipal subdivisions, (2) persons doing an

insurance business (as defined by section one thousand one hundred one

of the insurance law), (3) banking organizations (as defined by section

two of the banking law), and (4) executors, administrators, trustees,

guardians and other fiduciaries, are authorized to invest in bonds,

notes and evidences of indebtedness which are secured by first mortgages

or deeds of trust upon units and the appurtenant common interests,

wherever such persons may invest, and subject to all of the rules and

limitations applicable to such investment, in bonds, notes and evidences

of indebtedness which are secured by first mortgages or deeds of trust

upon real estate. Where the applicable limitations are dependent upon

the type of use of the real estate, only the type of use of the

particular unit or units which constitute the security for such

investment shall be taken into consideration for the purpose of such

limitations. The existence of any prior lien for taxes, assessments or

other similar charges not yet delinquent shall be disregarded in

determining whether a mortgage or deed of trust is a first mortgage or

deed of trust.

(b) No person enumerated in subdivision (a) of this section may invest

in bonds, notes or evidences of indebtedness secured by mortgages or

deeds of trust upon units and the appurtenant common interests, which

are other than first mortgages or deeds of trust thereupon,

notwithstanding any other provision of law (including section three

hundred thirty-nine-g of this chapter).

(c) Notwithstanding subdivisions (a) and (b), banking organizations

are authorized, subject to the rules and limitations applicable thereto

contained in subdivision four-a of section one hundred three,

subdivision six-a of section two hundred thirty-five, subdivision four-a

of section three hundred eighty and subdivision eight of section four

hundred fifty-six of the banking law, and the New York job development

authority is authorized to invest in bonds, notes and evidences of

indebtedness which are secured by mortgages other than first mortgages

upon units and the appurtenant common interests, provided such mortgages

are in compliance with title eight of article eight of the public

authorities law.

(d) Notwithstanding subdivisions (a) and (b) of this section, the New

York state urban development corporation is authorized to invest in

bonds, notes and evidences of indebtedness which are secured by

mortgages other than first mortgages upon units and the appurtenant

common interests, provided that (i) such units are owned or are to be

acquired by a corporation as defined in subparagraph five of paragraph

(a) of section one hundred two of the not-for-profit corporation law and

are to be used for commercial purposes, and such corporation has

executed a loan authorization agreement with the New York state urban

development corporation on or before June thirtieth, nineteen hundred

eighty-eight or (ii) such units are developed as a part of a project of

the New York state urban development corporation that received specific

authorization in chapter eight hundred thirty-nine of the laws of

nineteen hundred eighty-seven; and further provided that such

investments and subordinate mortgages are in compliance with chapter one

hundred seventy-four of the laws of nineteen hundred sixty-eight, as

subsequently amended.

(e) Notwithstanding subdivisions (a) and (b) of this section, the New

York city housing development corporation and a city having a population

of one million or more are authorized to invest in bonds, notes, and

evidences of indebtedness which are secured by mortgages other than

first mortgages upon dwelling units and the appurtenant common interests

provided that such investment is made in connection with a project

undertaken pursuant to the private housing finance law or the general

municipal law.

(f) Notwithstanding subdivisions (a) and (b) of this section, the

division of housing and community renewal and the housing trust fund

corporation, their successors and assigns, are authorized to invest in

bonds, notes, and evidences of indebtedness which are secured by

mortgages other than first mortgages upon dwelling units and the

appurtenant common interests provided that such investment is made in

connection with a project undertaken pursuant to the private housing

finance law.