N.Y. Retirement & Social Security Law § 177-c: Investment in mortgage pass-through certificates

§ 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.