(b) There shall be paid into such fund the portions of fees allocated to and directed to be deposited in such fund by the supervising agency with the consent and approval of the mayor as provided for in subdivision seven of this section. In addition, there shall be credited to and deposited in such fund any portion of the unexpended balance remaining in the housing fund as the supervising agency with the consent and approval of the mayor may determine to be in excess of the amounts needed to meet expenditures required to be paid from the housing fund.

(c) The monies in the limited-profit mortgage reserve fund shall be deposited in one or more of the banks or trust companies designated, in the manner provided by law, as depositories of the funds of such municipal corporation. The comptroller or the chief fiscal officer may invest the monies in such fund in obligations specified in paragraph d of this subdivision. Any interest earned or capital gain realized on the money so deposited or invested shall accrue to and become part of such fund. The separate identity of such fund shall be maintained whether its assets consist of cash or investments or both.

(d) Monies in such fund may be invested (1) in special time deposit accounts in, or certificates of deposit issued by, a bank or trust company located and authorized to do business in this state, provided, however, that such time deposit account or certificate of deposit shall be payable within such time as the proceeds may be needed to meet expenditures for which such monies were obtained and provided further that such time deposit account or certificate of deposit be secured by a pledge of obligations of the United States of America or obligations of the state of New York or obligations of any municipal corporation, school district or district corporation of the state of New York; or (2) in obligations of the United States of America, obligations of the state of New York or obligations of the municipal corporation which has established such mortgage insurance fund provided: (i) such obligations are not tax exempt; (ii) such obligations shall be payable or redeemable at the option of the owner within such times as the proceeds may be needed to meet expenditures for purposes for which the monies so invested were obtained, and (iii) such obligations, unless registered or inscribed in the name of the municipal corporation for which such investment is made, shall be purchased through, delivered to and held in custody of a bank or trust company in this state and shall be sold or presented for redemption or payment only by such bank or trust company upon written instructions from the comptroller or chief fiscal officer.

(e) An expenditure shall be made from such fund only by an authorization of the supervising agency with the consent and approval of the mayor and only for one or more of the following purposes:

(i) Payment of expenses of establishing and administering the fund;

(ii) Payment of a delinquent installment or installments of interest and principal due to the municipality under a mortgage loan, temporary loan or advance to a municipally-aided project;

(iii) Payment of any loss sustained by the municipality as a result of the making of a loan, temporary loan or advance to a municipally-aided project, whether such loss consists of a deficiency upon a mortgage, foreclosure sale as authorized by sections thirty-four and ninety-four of this chapter or otherwise; except that in the event the municipality acquires title to the project, payment for any loss or deficiency shall be deferred until such time when the municipality shall dispose of title to the project; any such loss or deficiency shall be diminished by the municipality to the extent of the amount derived by the municipality from such disposition plus any net operating income derived by the municipality during its period of ownership or less any net operating loss sustained by the municipality during such period and less any amount of interest paid by the municipality to retire any bonded indebtedness incurred in connection with the loan made to such project.

(iv) Payment of all costs entailed in procuring mortgage insurance in such amounts, and from such insurers as the supervising agency deems desirable to insure the municipality against any loss resulting from the making of a mortgage loan to a municipality-aided project. The payment from such fund of any delinquent installment or installments due the municipality under a mortgage as provided in subsection (ii) of this paragraph e shall not be deemed either a remission or waiver of the right to such installment or installments and such installment or installments shall continue to be due and payable to the municipality and shall be deposited, together with interest accrued, in the mortgage insurance fund when paid.

(f) The comptroller or chief fiscal officer shall keep a separate account for the mortgage insurance fund. Such account shall show:

(i) The date and amount of each sum paid into the fund;

(ii) The interest earned by the fund;

(iii) The capital gains or losses resulting from the sale of investments of the fund;

(iv) The interest or capital gains which have accrued to the fund;

(v) The amount and date of each withdrawal from the fund;

(vi) The assets of the fund indicating the cash balance therein and a schedule of the amounts invested. The comptroller or chief fiscal officer shall render a detailed report of the operation and condition of such fund to the supervising agency annually each fiscal year and at such other times as the supervising agency or the mayor may require. 8. Whenever reference is made in this article to a municipal loan, a loan by a municipality, a loan from a municipality, a contract for a loan between a municipality and a company, or any similar term, with respect to the territorial limits of the city of New York such term shall be construed to refer to a loan made or to be made either by such municipality or by the New York city housing development corporation, whichever is applicable. 9. The city of New York shall have the power to invest jointly or participate in a loan with the New York city housing development corporation or with one or more organizations or entities mentioned in section fifteen in a bond or note and single participating mortgage, or in separate bonds or notes and separate mortgages of a company organized pursuant to the provisions of this article upon such terms and conditions as are provided in said section fifteen of this article. 10. A municipality with a population of less than one million may, by action of its local legislative body concurred in by the commissioner, provide for the supervision and regulation of any municipally-aided project and the company carrying out such project by the commissioner in lieu of the supervising agency. With respect to any such project and company, the commissioner shall have, from and after the effective date of such action, all of the powers and duties of a supervising agency pursuant to this article. The company shall pay to the commissioner fees, as prescribed by the commissioner, to cover the expenses of examination, audit, and supervision of the company and the project. Notwithstanding any other provision of law, funds collected pursuant to such fees shall be deposited to the credit of the general fund. The provisions of subdivisions one and eight of this section shall apply only to projects financed in whole or in part by a mortgage loan, temporary loan or advance by a municipality. The provisions of subdivisions two, three, four, five, six and seven hereof shall apply to all municipally-aided projects including projects financed in whole or in part by a mortgage loan from the federal government or any agency or instrumentality thereof or by a mortgage or mortgage bonds insured by the federal government or any agency or instrumentality thereof.