§ 22. State loans. 1. The commissioner may enter into contracts for loans to a company. All such contracts shall be subject to approval by the state comptroller and by the attorney general as to form.

2. Loans by the state under such a contract shall be secured by a first mortgage lien, and no such loan shall be made in an amount greater than ninety-five per centum of the total project cost in the case of a mutual company, urban rental company or a non-profit company incorporated pursuant to the provisions of the not-for-profit corporation law and this article for the purpose of providing housing for staff members, employees or students of a college, university, hospital or child care institution and their immediate families and in the case of a non-profit company incorporated pursuant to the not-for-profit corporation law and this article for the purpose of providing housing for aged or handicapped persons of low income or in the case of a low income non-profit housing company such loans shall not be made in an amount greater than the total project cost. In case of a loan in an amount greater than ninety-five per centum of the total project cost, the commissioner may in his discretion require satisfactory independent guarantees that the loan will be repaid according to the terms of the company's bond or note and mortgage. Notwithstanding any other provisions of law, if the company proposes to sell or convey any part or parts of the mortgaged premises prior to the sale by the state of the definitive bonds providing the funds for the state loan, the comptroller, upon the application of the company and with the prior written consent of the commissioner, may release from the first mortgage lien any part or parts of the mortgaged premises not acquired through condemnation and not required for the project, provided that any net proceeds from the sale or conveyance of the said property will be held by the company for the sole purpose of reducing, in accordance with the requirements of the commissioner and comptroller, the principal amount of the state loan outstanding, and provided further that the unpaid principal amount of the state loan then outstanding, as it may be reduced by the net proceeds, if any, derived from the sale or conveyance, would not be in an amount greater than ninety-five per centum of the total project cost and in the case of a non-profit company incorporated pursuant to the provisions of the not-for-profit corporation law and this article for the purpose of providing housing for aged or handicapped persons of low income or in the case of a low income non-profit housing company such amount shall not be greater than the total project cost. The comptroller shall execute such release in the usual form, which, when acknowledged, shall be recorded by the county clerk and a minute thereof made upon a margin of the mortgage. A company may, with the prior written consent of the commissioner, and subject to the approval of the state comptroller and to the provisions of any contract with noteholders and bondholders, lease any property not acquired through condemnation and not required for the project, and may apply the income of such lease to any use authorized for any other rental income. Such lease shall contain restrictions to protect and preserve the project.

3. The commissioner may make temporary loans or advances to a company in anticipation of any permanent loans and no such temporary loans or advances shall be deemed to constitute part of such permanent loans unless such temporary loans or advances have been made out of the proceeds of definitive housing bonds sold by the state pursuant to chapters four hundred seven of the laws of nineteen hundred fifty-five and nine hundred fifty-six of the laws of nineteen hundred fifty-eight.

4. The state shall have the power to invest jointly with the New York state housing finance agency in a bond or note and single participating mortgage, or in separate bonds or notes and mortgages of a company organized pursuant to the provisions of this article. The interest of each shall have equal priority as to lien in proportion to the amount of loan so secured, but need not be equal as to interest rate, time or rate of amortization or otherwise. In such a case the state, through the commissioner of housing, is authorized to make provision, either in the mortgage or mortgages or by separate agreement, for the performance of such services as are generally performed by the New York state housing finance agency itself owning and holding a mortgage. Any agreement made by the commissioner under this subdivision shall be subject to the approval of the state comptroller and the attorney general as to form.