(b) First lien bonds or notes of such housing company when secured by a mortgage not exceeding four-fifths of the estimated cost prior to the completion of the project, or four-fifths of the appraised value or actual cost, whichever shall be less, after such completion, as certified by the commissioner, are hereby declared securities in which all public officers and bodies of the state and of the municipal subdivisions, all insurance companies and associations, and all savings banks and savings institutions, including savings and loan associations, in the state may properly and legally invest the funds within their control. 2. The bonds and notes so issued and secured and the mortgage or trust indentures relating thereto, may create a first or senior lien and a second or junior lien upon the real property embraced in any project; provided, however, that the total mortgage liens shall not exceed eighty per centum of the estimated cost prior to the completion of the project, or eighty per centum of the appraised value or actual cost, whichever shall be less, as certified by the commissioner after such completion. Where there is a first and a second mortgage lien upon the property embraced in a project, only the first or senior lien thereon shall be deemed a security in which such officers, bodies, corporations and associations may invest the funds within their control. Such bonds and mortgages, notes and mortgages or trust indentures may contain such other clauses and provisions as shall be approved by the commissioner, including the right to assignment of rents and entry into possession in case of default and including in the case of a housing company which is a partnership or trust the right of the partners or trustees, as the case may be, to be free of any personal liability thereunder; but the operation of the housing project in the event of such entry by mortgagee or receiver shall be subject to the regulations of the commissioner under this article. Provisions for the amortization of the bonded indebtedness or notes of indebtedness of companies formed under this article shall be subject to the approval of the commissioner. 3. (a) So long as funds made available by the federal government or any instrumentality thereof or any mortgage, mortgage bonds or notes guaranteed or insured by the federal government or any instrumentality thereof, or any mortgage or mortgage bonds or notes secured by obligations so guaranteed or insured, or tax exempt obligations issued pursuant to section eleven of the United States housing act of nineteen hundred thirty-seven, are used in financing, in whole or in part, any project under this article, the capital structure of a housing company undertaking such project and the proportionate amount of the cost of the lands and improvements to be represented by mortgages, bonds or notes shall be entirely in the discretion of the commissioner; and all restrictions as to the amounts to be represented by mortgages, mortgage bonds, mortgage notes, income debentures or shares shall be inapplicable to such projects or to housing companies undertaking such projects, except that the bonds, notes, mortgages, debentures and shares covering any project shall not exceed the actual final cost of such project, as defined in this article.

(b) Notwithstanding anything contained in paragraph (b) of subdivision one of this section, first lien bonds or other obligations of housing companies, secured by a first mortgage upon all of the real property of a project and not exceeding the estimated cost prior to the completion of the project, or the appraised value or actual cost, whichever shall be less, after such completion, as certified by the commissioner, are hereby declared securities in which all public officers and bodies of the state and of the municipal subdivisions, all insurance companies and associations, and all savings banks and savings institutions, including savings and loan associations, in the state may properly and legally invest the funds within their control, provided that

(1) the federal housing commissioner has insured, or has made a commitment to insure, such mortgage; or

(2) such bonds or other obligations are guaranteed or insured to at least forty per centum of the principal amount thereof under title three of an act of congress of the United States entitled the "Servicemen's Readjustment Act of 1944," or are secured by obligations so guaranteed or insured; or

(3) such bonds or other obligations evidence a loan for the purpose of financing construction and are to be guaranteed or insured under said title three, as hereinabove provided, upon completion of such construction, and all funds advanced on such loan are guaranteed or insured under said title three to the extent of at least thirty per centum of such advance, or are secured by obligations so guaranteed or insured. * 4. So long as funds made available by the New York state urban development corporation, pursuant to the New York state urban development corporation act, are used in financing, in whole or in part, any project under this article, all restrictions as to the amounts to be represented by mortgages, mortgage bonds, mortgage notes, income debentures or capital shall be inapplicable to such projects or to housing companies undertaking such projects, provided however that any mortgage loan from the New York state urban development corporation to housing companies undertaking such projects shall not exceed ninety-five per centum of project cost, as certified by the commissioner. * NB (Effective until ruling by Internal Revenue Service) * 4. So long as funds made available by the New York state urban development corporation or the New York state housing finance agency, pursuant to the New York state urban development corporation act or the New York state housing finance agency act, as the case may be, are used in financing, in whole or in part, any project under this article, all restrictions as to the amounts to be represented by mortgages, mortgage bonds, mortgage notes, income debentures or capital shall be inapplicable to such projects or to housing companies undertaking such projects, provided however that any mortgage loan from the New York state urban development corporation or the New York state housing finance agency, as the case may be, to housing companies undertaking such projects shall not exceed ninety-five per centum of project cost, as certified by the commissioner. * NB (Effective pending ruling by Internal Revenue Service) 5. The capital structure of a housing company acquiring a project from a company organized pursuant to article eleven of this chapter may be fixed by the commissioner, notwithstanding any limitations in this article as to the amount to be represented by mortgages, debentures or capital.