§ 23-a. Mortgage modifications, evidence of pre-existing indebtedness. 1. Notwithstanding the provision of any law, general or special, the supervising agency shall have the power to: (i) assign or pledge or contract to assign or pledge any mortgage securing a loan, including any loan to finance the construction of a project, and any note or bond evidencing indebtedness thereon, made by the municipality in accordance with the provisions of this article, and any contract or arrangement, including any subsidy contract or arrangement, relating to such mortgage, and the receipts to be derived from any of the foregoing, and may reacquire or accept and contract to reacquire or accept any such mortgage, note, bond, contract or arrangement, including any mortgage, note, bond, contract or arrangement made in substitution thereof, and the receipts to be derived therefrom, or (ii) consent to and contract for the modification of any of the terms of a mortgage, and note or bond secured thereby, made pursuant to section twenty-three of this chapter for the purpose of obtaining insurance of such mortgage loan by the federal government in order to refinance all or any part of the indebtedness evidenced by such mortgage and note or bond, or (iii) satisfy such mortgage in order to enable the company to obtain insurance by the federal government of a mortgage loan made for the purpose of refinancing all or any part of the indebtedness evidenced by such mortgage and note or bond. 2. In the event that the existing mortgage loan is satisfied pursuant to this section, the supervising agency may in consideration of the issuance of such satisfaction accept a new mortgage and note or bond insured by the federal government in an amount equal to the maximum principal amount of a mortgage loan the federal government will insure or accept the proceeds available to the housing company as a result of the refinancing. 3. In the event that there is residual indebtedness, the housing company shall make and the supervising agency shall accept such instruments evidencing such indebtedness as may be required by the supervising agency as are consistent with the provisions of subdivision fifteen of section twelve of this chapter, in such form and upon such terms as the supervising agency may approve. In the event that there are residual receipts obligations, the housing company may make and the supervising agency may accept instruments evidencing such obligations in accordance with the provisions of subdivision sixteen of section twelve of this chapter. 4. Notwithstanding any other provisions of this article or any general, special or local law, where the supervising agency has made the findings required in subdivision one of section twenty-six or section twenty-six-a and where a project has been approved pursuant to subdivision five of section twenty-six of this chapter, the supervising agency may make or contract to make a mortgage loan or exercise other related powers pursuant to this section or section twenty-three-b or subdivision twenty-two-a of section six hundred fifty-four of this chapter without further findings by the supervising agency or further approval by the local legislative body. 4-a. Notwithstanding the provisions of this article or any general, special or local law to the contrary, where an existing mortgage loan is modified or satisfied pursuant to this section and the supervising agency has approved a new or modified mortgage or mortgages, including a mortgage and note or bond insured by the federal government and a mortgage to secure residual indebtedness, the supervising agency may sell, assign, or otherwise dispose of, at public or private sale, onsuch terms and conditions as shall be deemed appropriate by the supervising agency subject to the approval of the comptroller or chief fiscal officer of the municipality wherein such agency is located, such new or modified mortgage or mortgages and related instruments. 4-b. Notwithstanding the provisions of this article or any general, special or local law to the contrary, where an existing mortgage loan is modified or satisfied pursuant to this section, the supervising agency may pay or incur fees, costs, expenses and other amounts, whether or not any amounts have been appropriated therefor in order to (1) meet a municipality's obligations under an agreement with the federal government on account of mortgage insurance, provided that a municipality's share of any mortgage insurance claim paid by the federal government shall not exceed fifty percent of the insurance benefits paid by the federal government, and further provided that a municipality's share of such claims under any contract or contracts entered into between a municipality and the federal government shall not exceed five percent of the outstanding principal amount of all mortgages of the municipality at any time insured by the federal government and included within such contract, (2) make loans for, or establish escrow accounts for the issuance of mortgage insurance, (3) absorb discounts associated with any sale, assignment or other disposition of a mortgage note or bond insured by the federal government, (4) pay fees required by the federal government as a condition for the issuance of mortgage insurance, (5) install such life safety devices and satisfy such minimum property standards, as may be required by the federal government which devices or standards are in addition to any requirement imposed by the municipality as mortgagee and to make loans for such purposes, (6) pay closing and other costs related to obtaining mortgage insurance from the federal government, (7) permit the municipality to issue obligations secured by such mortgage or mortgages, (8) meet such other costs as the federal government may from time to time impose, (9) pay any amounts not previously advanced under a mortgage or mortgages modified or satisfied pursuant to this section, and (10) hold an amount not to exceed twenty million dollars at any one time in a revolving account for a period not to exceed eighteen months from the time of the first deposit therein, to pay fees, costs, expenses and other amounts attributable to making and insuring mortgages pursuant to this section or attributable to issuing obligations secured by such mortgages. If the municipality sells any such mortgages insured by the federal government for an amount in excess of the principal amount thereof at the time of such sale, or if the municipality issues obligations secured by any such mortgages and the yield on such mortgages is greater than the yield on such obligations (the yield on such mortgages and obligations having been calculated in accordance with section one hundred three of the internal revenue code of the United States and regulations thereunder), then any such premium and any such differential may be used by the municipality for any lawful purpose, provided, however, that an amount equal to the annual sum of such premium and such differential, to the extent such differential is not paid to or for the benefit of the holders of such obligations, shall be credited annually by the municipality, at such times as determined by the supervising agency, as a payment by all municipally-aided projects then having residual indebtedness, of the then accrued and unpaid interest on such residual indebtedness. To the extent that any such credit otherwise allocable to a project in any year exceeds unpaid interest on the residual indebtedness of such project in that year, such excess credit shall be allocated among all other eligible projects having accrued and unpaid interest on residual indebtedness in that year. Notwithstanding the provisions of the foregoing sentence of thissubdivision, if an eligible project has made cash payments in any year for the sum of (i) interest on and principal of a federally insured mortgage and (ii) interest on and principal of residual indebtedness and (iii) all other payments on account of such insured mortgage, including mortgage insurance premium and reserves, at least equal to the sum of (i) interest and principal which would have been due annually on the original mortgage loan for the project, at the interest rate in effect at the time the project is refinanced, and (ii) all other required annual payments on account of such original mortgage loan, such as reserve requirements, then any excess credit allocable to such eligible project shall be credited in the next succeeding year as a payment of interest on residual indebtedness of such project before any cash payment is required to be made for such interest. Subject to the provisions of the preceding sentence of this subdivision, if the total of such credit in any year available for all eligible projects exceeds the total of all accrued and unpaid interest in that year on residual indebtedness of all eligible projects then having residual indebtedness, an amount equal to such excess credit shall be carried forward and credited in future years as a payment of accrued and unpaid interest on residual indebtedness of eligible projects in future years until such time as no further interest remains unpaid with respect to any residual indebtedness of eligible projects. The supervising agency shall divide such credit among eligible projects on the basis of the respective original principal amounts of the federally insured mortgages on eligible projects; provided, however, that such credit shall be allocated to projects which receive federal subsidies only to the extent that such subsidies are not thereby reduced. When there is a participation, new loan or investment pursuant to section twenty-three-b of this article for which the consent of a company is required and which will be substantially equivalent to a refinancing pursuant to section twenty-three-a or subdivision twenty-two-a of section six hundred fifty-four of this article, then for purposes of this subdivision the interest of the municipality after such participation, new loan or investment which is secured by a mortgage shall be deemed to be the equivalent of residual indebtedness and the interest of entities or organizations other than the municipality in such participation, new loan or investment shall be deemed to be the equivalent of a federally insured mortgage. 5. No company shall accept a mortgage loan to be insured by the federal government made for the purpose of refinancing the existing mortgage loan of a company which shall exceed the amount which can be supported by the income derived from the operation of the project at the rental rate determined by the supervising agency that would be necessary to meet all necessary payments to be made by the company, of all expenses including fixed charges, sinking funds, reserves and dividends on outstanding stock, as authorized by the supervising agency, if the principal amount of the original mortgage loan of the company were to be fully repaid over the term of such mortgage loan by constant and equal payments of principal and interest and if the interest rate on the company's original mortgage loan was eight and one-half percent per annum or, where the original mortgage loan provides for the payment of interest at a maximum rate of less than eight and one-half percent per annum, such maximum amount. 6. A company shall not accept a mortgage to be insured by the federal government for the purpose of refinancing an existing mortgage loan of a municipally-aided project unless the sum of interest and principal payable in respect of such mortgage to be insured by the federal government and in respect of any residual indebtedness, over the term ofsuch mortgage and residual indebtedness, shall be no more than the sum of interest and principal that would be payable in respect of the existing mortgage loan, over the term of such existing mortgage loan, at an interest rate of eight and one-half percent per annum or where the existing mortgage loan provides for a maximum interest rate of less than eight and one-half percent, at such maximum interest rate. 7. The terms of any mortgage securing residual indebtedness of a municipally-aided project shall include a provision to the effect that so long as the project is subject to a mortgage insured or held by the federal government (a) interest on and principal of such mortgage securing residual indebtedness shall be payable only if and to the extent to which surplus cash, as defined in a regulatory agreement excecuted by the housing company and the federal government, is available, and (b) the failure to pay interest and principal on such mortgage securing residual indebtedness shall not constitute an event of default unless surplus cash is available and not applied to such payments of interest and principal. 8. Ten days before an initial application is filed with the federal government to obtain insurance by the federal government of a mortgage for the purpose of refinancing all or any part of a mortgage loan for a municipally-aided project pursuant to section twenty-three-a or subdivision twenty-two-a of section six hundred fifty-four of this chapter, the supervising agency shall (a) mail to the president or other representative of the tenants' association or cooperators' advisory council, recognized by the supervising agency for such municipally-aided project, written notice of the proposed refinancing, including a copy of such initial application, and (b) make a copy of such initial application available at its offices during business hours, for inspection and copying by the residents of such municipally-aided project. Ten days before the closing of a proposed participation, new loan or investment with respect to a municipally-aided project pursuant to section twenty-three-b of this article, the supervising agency shall (a) mail to the president or other representative of the tenants' association or cooperators' advisory council, recognized by the supervising agency for such municipally-aided project, written notice of such proposed participation, new loan or investment, including a summary of the principal terms and conditions thereof, and (b) make a copy of such summary available at its offices during business hours, for inspection and copying by the residents of such municipally-aided project. The unintentional failure of the supervising agency to comply with the foregoing provisions of this subdivision shall not invalidate or otherwise affect any such refinancing of a mortgage loan or any such participation, new loan or investment.
§ 23-a. Mortgage modifications, evidence of pre-existing indebtedness. 1. Notwithstanding the provision of any law, general or special, the supervising agency shall have the power to: (i) assign or pledge or contract to assign or pledge any mortgage securing a loan, including any loan to finance the construction of a project, and any note or bond evidencing indebtedness thereon, made by the municipality in accordance with the provisions of this article, and any contract or arrangement, including any subsidy contract or arrangement, relating to such mortgage, and the receipts to be derived from any of the foregoing, and may reacquire or accept and contract to reacquire or accept any such mortgage, note, bond, contract or arrangement, including any mortgage, note, bond, contract or arrangement made in substitution thereof, and the receipts to be derived therefrom, or (ii) consent to and contract for the modification of any of the terms of a mortgage, and note or bond secured thereby, made pursuant to section twenty-three of this chapter for the purpose of obtaining insurance of such mortgage loan by the federal government in order to refinance all or any part of the indebtedness evidenced by such mortgage and note or bond, or (iii) satisfy such mortgage in order to enable the company to obtain insurance by the federal government of a mortgage loan made for the purpose of refinancing all or any part of the indebtedness evidenced by such mortgage and note or bond. 2. In the event that the existing mortgage loan is satisfied pursuant to this section, the supervising agency may in consideration of the issuance of such satisfaction accept a new mortgage and note or bond insured by the federal government in an amount equal to the maximum principal amount of a mortgage loan the federal government will insure or accept the proceeds available to the housing company as a result of the refinancing. 3. In the event that there is residual indebtedness, the housing company shall make and the supervising agency shall accept such instruments evidencing such indebtedness as may be required by the supervising agency as are consistent with the provisions of subdivision fifteen of section twelve of this chapter, in such form and upon such terms as the supervising agency may approve. In the event that there are residual receipts obligations, the housing company may make and the supervising agency may accept instruments evidencing such obligations in accordance with the provisions of subdivision sixteen of section twelve of this chapter. 4. Notwithstanding any other provisions of this article or any general, special or local law, where the supervising agency has made the findings required in subdivision one of section twenty-six or section twenty-six-a and where a project has been approved pursuant to subdivision five of section twenty-six of this chapter, the supervising agency may make or contract to make a mortgage loan or exercise other related powers pursuant to this section or section twenty-three-b or subdivision twenty-two-a of section six hundred fifty-four of this chapter without further findings by the supervising agency or further approval by the local legislative body. 4-a. Notwithstanding the provisions of this article or any general, special or local law to the contrary, where an existing mortgage loan is modified or satisfied pursuant to this section and the supervising agency has approved a new or modified mortgage or mortgages, including a mortgage and note or bond insured by the federal government and a mortgage to secure residual indebtedness, the supervising agency may sell, assign, or otherwise dispose of, at public or private sale, onsuch terms and conditions as shall be deemed appropriate by the supervising agency subject to the approval of the comptroller or chief fiscal officer of the municipality wherein such agency is located, such new or modified mortgage or mortgages and related instruments. 4-b. Notwithstanding the provisions of this article or any general, special or local law to the contrary, where an existing mortgage loan is modified or satisfied pursuant to this section, the supervising agency may pay or incur fees, costs, expenses and other amounts, whether or not any amounts have been appropriated therefor in order to (1) meet a municipality's obligations under an agreement with the federal government on account of mortgage insurance, provided that a municipality's share of any mortgage insurance claim paid by the federal government shall not exceed fifty percent of the insurance benefits paid by the federal government, and further provided that a municipality's share of such claims under any contract or contracts entered into between a municipality and the federal government shall not exceed five percent of the outstanding principal amount of all mortgages of the municipality at any time insured by the federal government and included within such contract, (2) make loans for, or establish escrow accounts for the issuance of mortgage insurance, (3) absorb discounts associated with any sale, assignment or other disposition of a mortgage note or bond insured by the federal government, (4) pay fees required by the federal government as a condition for the issuance of mortgage insurance, (5) install such life safety devices and satisfy such minimum property standards, as may be required by the federal government which devices or standards are in addition to any requirement imposed by the municipality as mortgagee and to make loans for such purposes, (6) pay closing and other costs related to obtaining mortgage insurance from the federal government, (7) permit the municipality to issue obligations secured by such mortgage or mortgages, (8) meet such other costs as the federal government may from time to time impose, (9) pay any amounts not previously advanced under a mortgage or mortgages modified or satisfied pursuant to this section, and (10) hold an amount not to exceed twenty million dollars at any one time in a revolving account for a period not to exceed eighteen months from the time of the first deposit therein, to pay fees, costs, expenses and other amounts attributable to making and insuring mortgages pursuant to this section or attributable to issuing obligations secured by such mortgages. If the municipality sells any such mortgages insured by the federal government for an amount in excess of the principal amount thereof at the time of such sale, or if the municipality issues obligations secured by any such mortgages and the yield on such mortgages is greater than the yield on such obligations (the yield on such mortgages and obligations having been calculated in accordance with section one hundred three of the internal revenue code of the United States and regulations thereunder), then any such premium and any such differential may be used by the municipality for any lawful purpose, provided, however, that an amount equal to the annual sum of such premium and such differential, to the extent such differential is not paid to or for the benefit of the holders of such obligations, shall be credited annually by the municipality, at such times as determined by the supervising agency, as a payment by all municipally-aided projects then having residual indebtedness, of the then accrued and unpaid interest on such residual indebtedness. To the extent that any such credit otherwise allocable to a project in any year exceeds unpaid interest on the residual indebtedness of such project in that year, such excess credit shall be allocated among all other eligible projects having accrued and unpaid interest on residual indebtedness in that year. Notwithstanding the provisions of the foregoing sentence of thissubdivision, if an eligible project has made cash payments in any year for the sum of (i) interest on and principal of a federally insured mortgage and (ii) interest on and principal of residual indebtedness and (iii) all other payments on account of such insured mortgage, including mortgage insurance premium and reserves, at least equal to the sum of (i) interest and principal which would have been due annually on the original mortgage loan for the project, at the interest rate in effect at the time the project is refinanced, and (ii) all other required annual payments on account of such original mortgage loan, such as reserve requirements, then any excess credit allocable to such eligible project shall be credited in the next succeeding year as a payment of interest on residual indebtedness of such project before any cash payment is required to be made for such interest. Subject to the provisions of the preceding sentence of this subdivision, if the total of such credit in any year available for all eligible projects exceeds the total of all accrued and unpaid interest in that year on residual indebtedness of all eligible projects then having residual indebtedness, an amount equal to such excess credit shall be carried forward and credited in future years as a payment of accrued and unpaid interest on residual indebtedness of eligible projects in future years until such time as no further interest remains unpaid with respect to any residual indebtedness of eligible projects. The supervising agency shall divide such credit among eligible projects on the basis of the respective original principal amounts of the federally insured mortgages on eligible projects; provided, however, that such credit shall be allocated to projects which receive federal subsidies only to the extent that such subsidies are not thereby reduced. When there is a participation, new loan or investment pursuant to section twenty-three-b of this article for which the consent of a company is required and which will be substantially equivalent to a refinancing pursuant to section twenty-three-a or subdivision twenty-two-a of section six hundred fifty-four of this article, then for purposes of this subdivision the interest of the municipality after such participation, new loan or investment which is secured by a mortgage shall be deemed to be the equivalent of residual indebtedness and the interest of entities or organizations other than the municipality in such participation, new loan or investment shall be deemed to be the equivalent of a federally insured mortgage. 5. No company shall accept a mortgage loan to be insured by the federal government made for the purpose of refinancing the existing mortgage loan of a company which shall exceed the amount which can be supported by the income derived from the operation of the project at the rental rate determined by the supervising agency that would be necessary to meet all necessary payments to be made by the company, of all expenses including fixed charges, sinking funds, reserves and dividends on outstanding stock, as authorized by the supervising agency, if the principal amount of the original mortgage loan of the company were to be fully repaid over the term of such mortgage loan by constant and equal payments of principal and interest and if the interest rate on the company's original mortgage loan was eight and one-half percent per annum or, where the original mortgage loan provides for the payment of interest at a maximum rate of less than eight and one-half percent per annum, such maximum amount. 6. A company shall not accept a mortgage to be insured by the federal government for the purpose of refinancing an existing mortgage loan of a municipally-aided project unless the sum of interest and principal payable in respect of such mortgage to be insured by the federal government and in respect of any residual indebtedness, over the term ofsuch mortgage and residual indebtedness, shall be no more than the sum of interest and principal that would be payable in respect of the existing mortgage loan, over the term of such existing mortgage loan, at an interest rate of eight and one-half percent per annum or where the existing mortgage loan provides for a maximum interest rate of less than eight and one-half percent, at such maximum interest rate. 7. The terms of any mortgage securing residual indebtedness of a municipally-aided project shall include a provision to the effect that so long as the project is subject to a mortgage insured or held by the federal government (a) interest on and principal of such mortgage securing residual indebtedness shall be payable only if and to the extent to which surplus cash, as defined in a regulatory agreement excecuted by the housing company and the federal government, is available, and (b) the failure to pay interest and principal on such mortgage securing residual indebtedness shall not constitute an event of default unless surplus cash is available and not applied to such payments of interest and principal. 8. Ten days before an initial application is filed with the federal government to obtain insurance by the federal government of a mortgage for the purpose of refinancing all or any part of a mortgage loan for a municipally-aided project pursuant to section twenty-three-a or subdivision twenty-two-a of section six hundred fifty-four of this chapter, the supervising agency shall (a) mail to the president or other representative of the tenants' association or cooperators' advisory council, recognized by the supervising agency for such municipally-aided project, written notice of the proposed refinancing, including a copy of such initial application, and (b) make a copy of such initial application available at its offices during business hours, for inspection and copying by the residents of such municipally-aided project. Ten days before the closing of a proposed participation, new loan or investment with respect to a municipally-aided project pursuant to section twenty-three-b of this article, the supervising agency shall (a) mail to the president or other representative of the tenants' association or cooperators' advisory council, recognized by the supervising agency for such municipally-aided project, written notice of such proposed participation, new loan or investment, including a summary of the principal terms and conditions thereof, and (b) make a copy of such summary available at its offices during business hours, for inspection and copying by the residents of such municipally-aided project. The unintentional failure of the supervising agency to comply with the foregoing provisions of this subdivision shall not invalidate or otherwise affect any such refinancing of a mortgage loan or any such participation, new loan or investment.
§ 23-a. Mortgage modifications, evidence of pre-existing indebtedness. 1. Notwithstanding the provision of any law, general or special, the supervising agency shall have the power to: (i) assign or pledge or contract to assign or pledge any mortgage securing a loan, including any loan to finance the construction of a project, and any note or bond evidencing indebtedness thereon, made by the municipality in accordance with the provisions of this article, and any contract or arrangement, including any subsidy contract or arrangement, relating to such mortgage, and the receipts to be derived from any of the foregoing, and may reacquire or accept and contract to reacquire or accept any such mortgage, note, bond, contract or arrangement, including any mortgage, note, bond, contract or arrangement made in substitution thereof, and the receipts to be derived therefrom, or (ii) consent to and contract for the modification of any of the terms of a mortgage, and note or bond secured thereby, made pursuant to section twenty-three of this chapter for the purpose of obtaining insurance of such mortgage loan by the federal government in order to refinance all or any part of the indebtedness evidenced by such mortgage and note or bond, or (iii) satisfy such mortgage in order to enable the company to obtain insurance by the federal government of a mortgage loan made for the purpose of refinancing all or any part of the indebtedness evidenced by such mortgage and note or bond. 2. In the event that the existing mortgage loan is satisfied pursuant to this section, the supervising agency may in consideration of the issuance of such satisfaction accept a new mortgage and note or bond insured by the federal government in an amount equal to the maximum principal amount of a mortgage loan the federal government will insure or accept the proceeds available to the housing company as a result of the refinancing. 3. In the event that there is residual indebtedness, the housing company shall make and the supervising agency shall accept such instruments evidencing such indebtedness as may be required by the supervising agency as are consistent with the provisions of subdivision fifteen of section twelve of this chapter, in such form and upon such terms as the supervising agency may approve. In the event that there are residual receipts obligations, the housing company may make and the supervising agency may accept instruments evidencing such obligations in accordance with the provisions of subdivision sixteen of section twelve of this chapter. 4. Notwithstanding any other provisions of this article or any general, special or local law, where the supervising agency has made the findings required in subdivision one of section twenty-six or section twenty-six-a and where a project has been approved pursuant to subdivision five of section twenty-six of this chapter, the supervising agency may make or contract to make a mortgage loan or exercise other related powers pursuant to this section or section twenty-three-b or subdivision twenty-two-a of section six hundred fifty-four of this chapter without further findings by the supervising agency or further approval by the local legislative body. 4-a. Notwithstanding the provisions of this article or any general, special or local law to the contrary, where an existing mortgage loan is modified or satisfied pursuant to this section and the supervising agency has approved a new or modified mortgage or mortgages, including a mortgage and note or bond insured by the federal government and a mortgage to secure residual indebtedness, the supervising agency may sell, assign, or otherwise dispose of, at public or private sale, onsuch terms and conditions as shall be deemed appropriate by the supervising agency subject to the approval of the comptroller or chief fiscal officer of the municipality wherein such agency is located, such new or modified mortgage or mortgages and related instruments. 4-b. Notwithstanding the provisions of this article or any general, special or local law to the contrary, where an existing mortgage loan is modified or satisfied pursuant to this section, the supervising agency may pay or incur fees, costs, expenses and other amounts, whether or not any amounts have been appropriated therefor in order to (1) meet a municipality's obligations under an agreement with the federal government on account of mortgage insurance, provided that a municipality's share of any mortgage insurance claim paid by the federal government shall not exceed fifty percent of the insurance benefits paid by the federal government, and further provided that a municipality's share of such claims under any contract or contracts entered into between a municipality and the federal government shall not exceed five percent of the outstanding principal amount of all mortgages of the municipality at any time insured by the federal government and included within such contract, (2) make loans for, or establish escrow accounts for the issuance of mortgage insurance, (3) absorb discounts associated with any sale, assignment or other disposition of a mortgage note or bond insured by the federal government, (4) pay fees required by the federal government as a condition for the issuance of mortgage insurance, (5) install such life safety devices and satisfy such minimum property standards, as may be required by the federal government which devices or standards are in addition to any requirement imposed by the municipality as mortgagee and to make loans for such purposes, (6) pay closing and other costs related to obtaining mortgage insurance from the federal government, (7) permit the municipality to issue obligations secured by such mortgage or mortgages, (8) meet such other costs as the federal government may from time to time impose, (9) pay any amounts not previously advanced under a mortgage or mortgages modified or satisfied pursuant to this section, and (10) hold an amount not to exceed twenty million dollars at any one time in a revolving account for a period not to exceed eighteen months from the time of the first deposit therein, to pay fees, costs, expenses and other amounts attributable to making and insuring mortgages pursuant to this section or attributable to issuing obligations secured by such mortgages. If the municipality sells any such mortgages insured by the federal government for an amount in excess of the principal amount thereof at the time of such sale, or if the municipality issues obligations secured by any such mortgages and the yield on such mortgages is greater than the yield on such obligations (the yield on such mortgages and obligations having been calculated in accordance with section one hundred three of the internal revenue code of the United States and regulations thereunder), then any such premium and any such differential may be used by the municipality for any lawful purpose, provided, however, that an amount equal to the annual sum of such premium and such differential, to the extent such differential is not paid to or for the benefit of the holders of such obligations, shall be credited annually by the municipality, at such times as determined by the supervising agency, as a payment by all municipally-aided projects then having residual indebtedness, of the then accrued and unpaid interest on such residual indebtedness. To the extent that any such credit otherwise allocable to a project in any year exceeds unpaid interest on the residual indebtedness of such project in that year, such excess credit shall be allocated among all other eligible projects having accrued and unpaid interest on residual indebtedness in that year. Notwithstanding the provisions of the foregoing sentence of thissubdivision, if an eligible project has made cash payments in any year for the sum of (i) interest on and principal of a federally insured mortgage and (ii) interest on and principal of residual indebtedness and (iii) all other payments on account of such insured mortgage, including mortgage insurance premium and reserves, at least equal to the sum of (i) interest and principal which would have been due annually on the original mortgage loan for the project, at the interest rate in effect at the time the project is refinanced, and (ii) all other required annual payments on account of such original mortgage loan, such as reserve requirements, then any excess credit allocable to such eligible project shall be credited in the next succeeding year as a payment of interest on residual indebtedness of such project before any cash payment is required to be made for such interest. Subject to the provisions of the preceding sentence of this subdivision, if the total of such credit in any year available for all eligible projects exceeds the total of all accrued and unpaid interest in that year on residual indebtedness of all eligible projects then having residual indebtedness, an amount equal to such excess credit shall be carried forward and credited in future years as a payment of accrued and unpaid interest on residual indebtedness of eligible projects in future years until such time as no further interest remains unpaid with respect to any residual indebtedness of eligible projects. The supervising agency shall divide such credit among eligible projects on the basis of the respective original principal amounts of the federally insured mortgages on eligible projects; provided, however, that such credit shall be allocated to projects which receive federal subsidies only to the extent that such subsidies are not thereby reduced. When there is a participation, new loan or investment pursuant to section twenty-three-b of this article for which the consent of a company is required and which will be substantially equivalent to a refinancing pursuant to section twenty-three-a or subdivision twenty-two-a of section six hundred fifty-four of this article, then for purposes of this subdivision the interest of the municipality after such participation, new loan or investment which is secured by a mortgage shall be deemed to be the equivalent of residual indebtedness and the interest of entities or organizations other than the municipality in such participation, new loan or investment shall be deemed to be the equivalent of a federally insured mortgage. 5. No company shall accept a mortgage loan to be insured by the federal government made for the purpose of refinancing the existing mortgage loan of a company which shall exceed the amount which can be supported by the income derived from the operation of the project at the rental rate determined by the supervising agency that would be necessary to meet all necessary payments to be made by the company, of all expenses including fixed charges, sinking funds, reserves and dividends on outstanding stock, as authorized by the supervising agency, if the principal amount of the original mortgage loan of the company were to be fully repaid over the term of such mortgage loan by constant and equal payments of principal and interest and if the interest rate on the company's original mortgage loan was eight and one-half percent per annum or, where the original mortgage loan provides for the payment of interest at a maximum rate of less than eight and one-half percent per annum, such maximum amount. 6. A company shall not accept a mortgage to be insured by the federal government for the purpose of refinancing an existing mortgage loan of a municipally-aided project unless the sum of interest and principal payable in respect of such mortgage to be insured by the federal government and in respect of any residual indebtedness, over the term ofsuch mortgage and residual indebtedness, shall be no more than the sum of interest and principal that would be payable in respect of the existing mortgage loan, over the term of such existing mortgage loan, at an interest rate of eight and one-half percent per annum or where the existing mortgage loan provides for a maximum interest rate of less than eight and one-half percent, at such maximum interest rate. 7. The terms of any mortgage securing residual indebtedness of a municipally-aided project shall include a provision to the effect that so long as the project is subject to a mortgage insured or held by the federal government (a) interest on and principal of such mortgage securing residual indebtedness shall be payable only if and to the extent to which surplus cash, as defined in a regulatory agreement excecuted by the housing company and the federal government, is available, and (b) the failure to pay interest and principal on such mortgage securing residual indebtedness shall not constitute an event of default unless surplus cash is available and not applied to such payments of interest and principal. 8. Ten days before an initial application is filed with the federal government to obtain insurance by the federal government of a mortgage for the purpose of refinancing all or any part of a mortgage loan for a municipally-aided project pursuant to section twenty-three-a or subdivision twenty-two-a of section six hundred fifty-four of this chapter, the supervising agency shall (a) mail to the president or other representative of the tenants' association or cooperators' advisory council, recognized by the supervising agency for such municipally-aided project, written notice of the proposed refinancing, including a copy of such initial application, and (b) make a copy of such initial application available at its offices during business hours, for inspection and copying by the residents of such municipally-aided project. Ten days before the closing of a proposed participation, new loan or investment with respect to a municipally-aided project pursuant to section twenty-three-b of this article, the supervising agency shall (a) mail to the president or other representative of the tenants' association or cooperators' advisory council, recognized by the supervising agency for such municipally-aided project, written notice of such proposed participation, new loan or investment, including a summary of the principal terms and conditions thereof, and (b) make a copy of such summary available at its offices during business hours, for inspection and copying by the residents of such municipally-aided project. The unintentional failure of the supervising agency to comply with the foregoing provisions of this subdivision shall not invalidate or otherwise affect any such refinancing of a mortgage loan or any such participation, new loan or investment.
