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made or purchased by the corporation and such obligations have received an investment grade rating from a recognized rating agency, (b) the loan made or purchased by the corporation is fully secured as to principal and interest by insurance or a commitment to insure by the state of New York mortgage agency or New York city residential mortgage insurance corporation or by the general credit of a bank, national bank, trust company, savings bank, savings and loan association, insurance company, governmental agency of the United States, or any combination thereof.

§ 2. Subdivision 24 of section 654 of the private housing finance law is renumbered subdivision 25 and a new subdivision 24 is added to read as follows:

24. To contract with any of its subsidiary corporations to render such services as such subsidiary corporation may request, including, but not limited to, the use of the premises, personnel and personal property of the corporation, and to provide for reimbursement to the corporation from such subsidiary corporation for any expenses necessarily incurred by the corporation in carrying out the terms of any such contract.

၌ 3. The private housing finance law is amended by adding a new section 654-d to read as follows:

§ 654-d. Residential mortgage insurance corporation. 1. Definitions. As used in this section, the following words and terms shall have the following meanings unless the context shall indicate another or different meaning or intent:

(a) "Cash equivalent". A letter of credit, insurance policy, surety, guarantee, indemnity or other security arrangement.

(b) "Financial institution". (1) Any bank, trust company, national bank, state or federal savings bank, state or federal savings and loan association, or state or federal credit union, insurance company, pension fund or retirement system of any corporation, association, any other entity which is owned or controlled by any one or more of the above, provided such bank, trust company, national bank, state federal savings bank, state or federal savings and loan association, or state or federal credit union, insurance company,

pension fund retirement system of any corporation or association, and, if an entity, which is owned by one or more of the above, such entity, is supervised by responsible to any agency of the federal government, the state, any department thereof or the governing body of any city, town lage of

the state, or (ii) any other entity approved by the subsidiary corporation, or (iii) any one or more of the above when lawfully acting

trustee or otherwise in a fiduciary capacity. The term "financial institution" shall also include the New York state housing finance agency, the New York state medical care facilities finance agency, the state of New York mortgage agency, the New York state urban development corporation, the corporation, the New York city department of housing preservation and development, the community preservation corporation, any governmental

agency of the United States which customarily makes, purchases or holds residential mortgages and any person who is approved

a mortgage lender by the federa] housing administration for purposes of insurance issued by such administration or licensed by the state of New York as a mortgage banker.

(c) "Housing accommodation". Any existing building, structure, unit thereof (including an owner-occupied unit in a condominium and a lesseeoccupied dwelling unit in which the lessee retains a proprietary, lease with respect to such dwelling unit and has an allocable ownership interest in

cooperative housing corporation), or unimproved real property, which is used or occupied, or is intended to be used as the home or residence of one or more persons, a portion of which may also be used for commercial and other community facilities ancillary to such residence provided that, in the case of any housing accommodation consisting of more than six dwelling units, the floor

of aboveground commercial facilities shall not exceed one-quarter of the aboveground floor area of such housing accommodation (inclusive of such mercial facilities),

(d) "Housing insurance contracts". All contracts entered into by the subsidiary corporation to insure mortgages pursuant to this section, but not including (i) any contracts to insure mortgages entered into by the predecessor corporation which are imposed upon and assumed by the subsidiary corporation pursuant to paragraph (d) of subdivision two of this section, or (ii) any contracts to insure mortgages entered into by the subsidiary corporation with respect to which a commitment to insure was issued by the predecessor corporation.

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(e) "Housing insurance fund". The housing insurance fund as established pursuant to subdivision twelve of this section.

(f) "Housing insurance fund requirement". As of any particular, date of computation, an amount equal to the aggregate of si) one hundred per centum of the insured amounts due and payable by the subsidiary corporation pursuant to housing insurance contracts, plus (ii) twenty per tum of the insured amounts under housing insurance contracts other than insured amounts which are due and payable pursuant to (i) above, plus (iii) twenty per centum of the amounts to be insured under housing insurance contracts pursuant to the subsidiary corporation's commitments to insure.

(8) "Mortgage". A first mortgage on real property located within the city of New York, securing & preservation loan or a rehabilitation loan, with å tern not to exceed forty years, on real estate, held in fee simple or on a leasehold under a lease having a period of years to

at the time a mortgage is insured under this section of at least twenty per centum greater duration than the remaining term of such mortgage; the term "first mortgage" means such first liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate under the laws of the state, together with the credit' instruments, if any, secured thereby.

(h) "Mortgage insurance contracts". All contracts to insure mortgages entered into by the predecessor corporation that are imposed upon

and assumed by the subsidiary corporation pursuant to paragraph (d) of subdivision two of this section and all contracts to insure mortgages tered into by the subsidiary corporation with respect to which a commitment to insure was issued by the predecessor corporation.

(i) "Mortgage insurance fund". The mortgage insurance fund as established pursuant to subdivision twelve of this section.

(j) "Mortgage insurance fund requirement". As of any particular date of computation, an amount equal to the aggregate of (i) one hundred per centum of the insured amounts due and payable by the subsidiary corporation pursuant to mortgage insurance contracts, plus (ii) an amount equal to the greater of (A) seven million five hundred thousand dollars or* (B) twenty per centum of the insured amounts under mortgage insurance contracts other than insured amounts which are due and payable under subparagraph (i) of this paragraph, plus (iii) twenty per centum of the amounts to be insured under the predecessor corporation's commitments to insure; provided, however, that notwithstanding the foregoing, at time, shall the mortgage insurance fund requirement exceed the aggregate of (1) insured amounts due and payable by the subsidiary corporation pursuant to mortgage insurance contracts, plus (2) one hundred per centum of the insured amounts under mortgage' insurance contracts other than insured amounts which are due and payable under clause (1) of this paragraph, plus (3) one hundred per centum of the amounts to be insured der the predecessor corporation's commitments to insure.

(k) "Mortgagee". The mortgage lender under a mortgage insured by the predecessor corporation or insured pursuant to subdivision ten

of

this section, and it's successors and assigns.

(1) "Mortgage loan". A mortgage loan secured by a mortgage. (m) "Mortgagor". The original borrower under a mortgage loan insured by the predecessor corporation or insured pursuant to subdivision ten of this section, and its successors and assigns.

(n) "Multi-family housing accommodation". A housing accommodation with five or more dwelling units.

(0) "Operating expenses". All costs of administering the subsidiary corporation, including, but not limited to, salaries and wages, expenses of administering staff functions, fees of professional consultants, legal fees, charges incurred for servicing of mortgage loans, money management fees, office rents, utility charges, costs of supplies, furnishings, equipment, machinery and apparatus, maintenance and repair of property, payment to the corporation for services rendered, amounts due and owing under contracts validly entered into by the predecessor poration the subsidiary corporation, other than mortgage insurance contracts and housing insurance contracts, respectively, and other penses incurred in connection with any of the foregoing.

(P) "Other real property". Any building, structure or unimproved property which is used or occupied, or is intended to be used осси pied, primarily for emergency, transitional

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portion of which may also be used for commercial and other community facilities ancillary to such use provided that, the floor area of aboveground commercial facilities shall not exceed one-quarter of the aboveground floor area of such other real property (inclusive of such commercial facilities).

(9) "Predecessor corporation". The New York city rehabilitation mortgage insurance corporation created by section one of chapter ninehundred twenty-four of the laws of nineteen hundred seventy-three, being, prior to repeal, article fourteen of the private housing finance' law.

(r) "Preservation loan". A mortgage loan extended by a financial institution with a term not to exceed forty years for the purposes of refinancing existing indebtedness secured by one or more mortgages on a housing accommodation or other real property located within the city of New York and/or financing the acquisition of a housing accommodation or other real property located within the city of New York and which otherwise complies with the conditions established pursuant to subdivision ten of this section,

(s) "Rehabilitation". Repairs, alterations or improvements of a housing accommodation or other real property designed to raise the housing standards therein or, in the case of other real property, designed to provide needed improvements therein. Rehabilitation shall also include the construction of a housing accommodation or other real property.

(t) "Rehabilitation loan". A mortgage loan extended by a financial institution with a term not to exceed forty years which may include the refinancing of existing indebtedness, if any, secured by one or more mortgages on the housing accommodation or other real property to be rehabilitated, or financing the acquisition of the housing accommodation or other real property to be rehabilitated, which housing accommodation

other real property shall be located within the city of New York and which otherwise complies with the conditions established pursuant to subdivision ten of this section, provided, however, that a sum equal to at least twenty-five percent of the amount of the mortgage loan shall be used for the cost of rehabilitation of, or construction of improvements on, a housing accommodation or other real property.

2. New York city residential mortgage insurance corporation. (a) There is hereby established a public benefit corporation known the "New York city residential mortgage insurance corporation" as a subsidiary corporation of the corporation. The purpose of such subsidiary corporation

shall be to insure mortgage loans in order to promote the preservation of neighborhoods which are blighted, are becoming blighted may

become blighted, to discourage disinvestment and encourage the investment of mortgage capital in such neighborhoods and to provide safe, sanitary and affordable housing accommodations to persons and families for whom the ordinary operations of private enterprise cannot supply such accommodations.

(b) The subsidiary corporation shall be the successor to the predecessor corporation.

(c) All property, and rights of the predecessor corporation (other than moneys of the predecessor corporation) are hereby passed to and vested in the subsidiary corporation, subject, however, to all outstanding contracts of insurance, commitments to insure mortgages, and all

outstanding obligations of the predecessor corporation. All

moneys of the predecessor corporation (including, but not limited to, amounts held in the mortgage insurance fund established pursuant to section seven hun dred nine of this chapter, prior to said section being repealed) and all moneys

held in the remic premium reserve fund established pursuant to said section seven hundred nine shall be transferred to the city; provided that as a condition to said transfer, a like amount of money shall be transferred from the corporation to the subsidiary corporation to be deposited into the mortgage insurance fund, the housing insurance fund and the remic premium reserve fund (all established pursuant to subdivision twelve of this section) in such amounts as shall be determined by the subsidiary corporation, subject to the provisions of

paragraph (a) of subdivision twelve of this section.

(d) *All debts, liabilities, obligations, contracts, agreements, and covenants of the predecessor corporation (including, but not limited to, contracts of insurance and commitments to insure mortgages) are hereby imposed upon and shall be assumed by the subsidiary corporation. All persons having claims under any contracts of insurance or commitments to insure mortgages entered into with the predecessor corporation may force those claims against the subsidiary corporation in the same manner as they might have against the predecessor corporation, and the rights

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and remedies of such persons shall not be limited or restricted in any
manner by this section. The foregoing notwithstanding, the debts, lia-
bilities, obligations, contracts, agreements and covenants of the
predecessor corporation shall not be imposed upon the corporation. All
persons having claims under any contracts of insurance or commitments to
insure mortgages entered into with the predecessor corporation shall
have no right to enforce those claims in any manner against the
corporation.

(e) In continuing the functions and carrying out the contracts, obli-
gations and duties of the predecessor corporation, the subsidiary
poration is hereby authorized to act in its own name or in the name of
the predecessor corporation as may be convenient or advisable.

(f) All regulations of the predecessor corporation shall continue to be in effect as the regulations of the subsidiary corporation until amended, supplemented or rescinded by the subsidiary corporation in accordance with law.

3. Assistance; privileges. (a) The subsidiary corporation may receive moneys from the corporation, the state, any public benefit corporation, the city, the federal government or any other source for public purposes set forth in this section.

(b) The subsidiary corporation may contract for and accept any gifts or grants or loans of funds or property or financial or other aid in any form from the federal government

any agency or instrumentality thereof, or from the state or any agency or instrumentality thereof, including the city and the corporation, or from any other source, public or private, and to comply, subject to the provisions of this section, with the terms and conditions thereof.

(C) The city and the corporation are each hereby authorized to, but neither is required to, make gifts, grants or loans of funds or property,

financial or other' aid in any form to the subsidiary corporation and
to enter into any contracts or other agreements with the subsidiary cor-
poration, such terms and conditions as the city or the corporation,
as applicable, and the subsidiary corporation may agree upon, all in
furtherance of the public purposes set forth in this section.

(d) All domestic corporations or associations organized for the pur-
pose of carrying on business in this state, public benefit corporations,
public employee pension funds and any other persons, corporations or as-
sociations are hereby authorized to make contributions to the subsidiary
corporation.

(e) The subsidiary corporation shall have all the privileges, immuni-
ties, tax exemptions and other exemptions of the corporation to the
tent the same are not inconsistent with this section.

4. Membership. The membership of such subsidiary corporation shall
consist of nine members, seven of whom shall be members of the corpora-
tion and two of whom shall be appointed by the mayor. The members who
are not members of the corporation shall serve for terms ending two and
four years respectively from January first next succeeding the date of
their appointment. The successors of the members who are not members of
the corporation shall serve for terms of four years each. A member who
is not a member of the corporation shall continue in office until his or
her successor has been appointed and qualified. With respect to any mem-
ber who is not a member of the corporation, the mayor shall fill

any
vacancy which may occur by reason of death, resignation or otherwise for
the remaining unexpired term of such member. A member who is not a
ber of

the corporation may be removed by the mayor for cause, but not
without an opportunity to be heard in person by counsel, in such
member's defense, upon not less than ten days' notice. The powers of the
subsidiary corporation shall be vested in and exercised by no less than
five of the members thereof then in office. The subsidiary corporation
may delegate to one or more of its members, or its officers, agents and
employees, such duties and powers as it may deem proper. The commis-
sioner of the department of housing, preservation and development shall
serve as chairperson of the subsidiary corporation. The president of the
corporat ion shall serve as president of the subsidiary corporation.

5. Compensation. Notwithstanding any inconsistent provisions of this of any other general, special or local law, no officer employee of the corporation, the city or the state, or of any public corporation, as defined in the general construction law, shall be deemed to have for

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fits provided under the retirement and social security law or under any
public retirement system maintained by the state or by the civil divi-
sions thereof by reason of such person's acceptance of membership on
by virtue of such person's being an officer, employee or agent of the
subsidiary corporation. The members may engage in private employment or
in a profession or business, unless otherwise prohibited from doing so
by virtue of holding another public office, subject to the provisions of
article eighteen of the general municipal law. For the purposes of such
article eighteen, the subsidiary corporation shall be a "municipality"
and a member shall be a "municipal officer", No member of the subsidiary
corporation shall receive add it'ional compensation, either direct or in-
direct, other than reimbursement for actual and necessary expenses in-
curred in the performance of such person's duties, by reason of such
person serving as a member of the subsidiary corporation.

6. Transfer of resources. The city and the corporation shall have the power to, but shall not be obligated to, transfer to the subsidiary cor. poration such

agents, employees and facilities, including any real and/or personal property, in order to carry out the

purposes of this section.

7. Termination. The subsidiary corporation and its corporate existence shall continue until terminated by law; provided, however, that no such law shall take effect so long as the subsidiary corporation shall have contracts to insure mortgages (including mortgage insurance contracts and housing insurance contracts), commitments to insure, notes, bonds, or other obligations outstanding, unless adequate provision has been made for the payment thereof.ov pon termination of the existence of the subsidiary corporation all of its rights and properties shall pass to and be vested in the corporation.

8. Powers. The subsidiary corporation shall have the power:
(a) To sue and be sued;
(b) To have a seal and alter the same at pleasure;
ic) To make and alter by-laws for its organization;

(d) To adopt, amend or rescind rules and regulations appropriate to carry out, its corporate purposes, including rules and regulations, govi erning the

of its property and facilities and to establish such requirements and enter into such agreements to achieve the objectives of this section;

(e) To make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this section;

(f) to acquire, hold and dispose of real and/or personal property for its corporate purposes;

(8) engage the services of private consultants on a contract basis for rendering professional and technical assistance and advice;

(h) To appoint officers, agents and employees, prescribe their duties and qualifications and fix their compensation;

(i) To invest any funds, or other moneys under its custody and control in the same manner as the corporation;

(;) To establish and levy fees and charges in connection with the processing of applications for mortgage insurance and fix premium charges for mortgage insurance;

(k) To enter into commitments to insure mortgages and contracts of insurance and enter into any additional agreements as the subsidiary corporation deems appropriate to further the objectives of this section;

(1) To fulfill its obligations and enforce its rights under any contract of insurance, or commitment to insure so furnished as provided in this section and such rules and regulations as may be adopted by the subsidiary corporation;

(m) To pay, pursue to final collection, compromise, waive or release any right, title, claim, lien or demand, however acquired, including any equity or right of redemption; (n) To foreclose

any mortgage in default or commence any action to protect or enforce any right conferred upon it by any law, mortgage, contract other agreement, and to bid for and purchase such property at any foreclosure or at any other sale, or otherwise to acquire or take possession of any

deal with, hold, administer, manage, rent, repair, insure or sell, lease or otherwise dispose of any property conveyed to or acquired by the subsidiary corporation and to enter into agreements with the state, the city, or any person, firm, entity, partnership corporation, either public or private, with regard thereto;

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