Section 7. No more than such proportion of the estimated cost of a project, not exceeding ninety per cent thereof, as the housing board will approve, shall be raised by borrowing the same, and the remainder of such estimated cost and such additional capital as the housing board has required or approved, unless provided by grants or gifts, shall be raised by subscription to or sale of the capital stock of the corporation. Only stock having par value shall be issued by such a corporation, except as the housing board shall approve the issue of stock without par value and the consideration to be paid therefor. No such corporation shall, without the approval of the housing board, enter upon the construction of a project until the full amount to be paid for its capital stock as above determined has been received by the corporation in cash or in property or, with the approval of the housing board, in services or materials or contracts for services or materials. So long as funds made available by the federal government or any instrumentality thereof or any mortgage or mortgage bonds insured or guaranteed by the federal housing commissioner or the administrator of veterans' affairs or any other instrumentality of the federal government are used in financing, in whole or in part, any project under this chapter, such corporation may borrow such amount above ninety per cent of the estimated cost of a project as may be approved by the housing board, notwithstanding the foregoing limitation on borrowing. Any such corporation may issue such stock as may be required by any federal agency, instrumentality or officer as a condition to loans secured by mortgages insured or guaranteed by the federal government or any agency or instrumentality thereof. The stock of such a corporation shall first be offered to the owners of the real estate within the location of the project and each owner may subscribe to said stock in an amount not in excess of the value less encumbrances of his real estate within such location and may pay his subscription by a deed of his said real estate, to be held in escrow by the housing board until the full amount of the capital has been raised. The valuation of said real estate for the purposes of this section shall be determined by agreement, subject to the approval of the housing board, and if the parties cannot agree upon the valuation, it shall be determined by the housing board. If the owner is dissatisfied with the amount so offered, his deed shall be returned to him and his subscription shall be cancelled, but his right to subscribe to the stock in cash if he so elects and his right to recover the value of his land in the appropriate proceedings if taken by eminent domain by the corporation shall not be impaired by his action under this section.

So much of the stock as has not been subscribed for by the owners of the real estate within thirty days after it has been offered to them shall be issued to the persons who signed the agreement of association, in proportion to but not in excess of their respective subscriptions and any remaining stock shall be offered to the general public.

The stocks, bonds and other securities of such corporation shall, subject to the approval of the commissioner of insurance, be legal investments for the capital and other funds of insurance companies, and the bonds and notes of such a corporation, when secured by a first mortgage upon its real estate shall, subject to the approval of the commissioner of banks and, in the case of savings banks, of the directors of Depositors Insurance Fund, be legal investments for the deposits and the income derived therefrom of savings banks and for the trust funds of trust companies.