[§201H-42]  Private development of projects. (a)  The corporation may enter into contracts with any eligible bidder toprovide for the construction of a housing project or projects.  Each contractshall provide that the housing project or projects shall be placed under thecontrol of the corporation as soon as the unit is available for occupancy. Each contract also shall provide that the capital stock of the mortgagor (wherethe mortgagor is a corporate entity) be transferred to the corporation when thehousing project or projects have been completed.  Each contract shall containterms and conditions that the corporation may determine to be necessary toprotect the interests of the State.  Each contract shall provide for thefurnishing by the contractor of a performance bond and a payment bond withsureties satisfactory to the corporation, and the furnishings of the bondsshall be deemed a sufficient compliance with the provisions of law and noadditional bonds shall be required.  Before the corporation shall enter intoany contract as authorized by this section for the construction of a housingproject or projects, it shall invite the submission of competitive bids aftergiving public notice in the manner prescribed by law.

(b)  Notwithstanding any other law to thecontrary, the corporation may:

(1)  Acquire the capital stock of mortgagors holdingproperty covered by a mortgage guarantee under this chapter and established bythis section; to exercise the rights as holder of the capital stock during thelife of the mortgage and, upon the termination of the mortgage, to dissolve themortgagor;

(2)  Guarantee the payment of notes or other legalinstruments of the mortgagors; and

(3)  Make payments thereon.

All housing projects placed under the control of thecorporation pursuant to this section shall be deemed to be housing projectsunder the jurisdiction of the State.

(c)  On request by the corporation, theattorney general shall furnish to the corporation an opinion as to thesufficiency of title to any property on which a housing project is proposed forconstruction, or on which housing projects have been constructed, under thissection.  If the opinion of the attorney general is that the title to theproperty is good and sufficient, the corporation is authorized to guarantee, orenter into a commitment to guarantee, the mortgagee against any losses that maythereafter arise from adverse claims to the title.  None of the proceeds of anymortgage loan hereafter insured shall be used for title search and title insurancecosts; provided that, if the corporation determines in the case of any housingproject that the financing of the construction of the project is impossibleunless title insurance is provided, the corporation may provide for the paymentof the reasonable costs necessary for obtaining title search and titleinsurance.  Any determination by the corporation under this subsection shall beset forth in writing, together with the reasons therefor.

(d)  The State shall be authorized to guaranteethe repayment of one hundred per cent of the principal and interest of loansfrom commercial lenders for the purposes of this section pursuant to rulesadopted by the corporation which shall conform as closely as is possible to thepractices of the Federal Housing Administration in insuring loans underSections 203 and 207 of the United States Housing Act of 1937, as amended;provided that at no time shall the State's liability, contingent or otherwise,on the guarantees exceed $10,000,000. [L 2006, c 180, pt of §3]