One or more savings banks may sponsor a cooperative apartment housing redevelopment project for the purpose of rehabilitating an area which shall be found to be substandard and insanitary. The area to be rehabilitated shall be located in a municipality and, if such savings bank is the only sponsor, in a county in which an office of the sponsoring savings bank is located. If there is more than one sponsoring savings bank, such municipality shall be located in the banking district in which the sponsoring savings banks owning 50 percent or more of the stock and obligation of the redevelopment company have their principal offices. The term municipality as used in this section shall be deemed to refer to a city, town or incorporated village. The project to be undertaken by such company may be undertaken independently or in conjunction with or as a portion of a slum clearance project under title I of an act of Congress entitled “Housing Act of 1949”, as amended, or under any State or municipally-sponsored slum clearance program.

No investment shall be made by any savings bank in the stock and obligations of a redevelopment company unless such company shall have filed with the superintendent its written agreement subjecting itself to the supervision of the department, submitting to periodic examinations by the department at such times and in such manner as the superintendent shall provide and agreeing to pay the charges for such examinations assessed against it by the superintendent in the same manner as in it were a banking organization organized under the laws of New York. The agreement respecting supervision shall terminate when the stock and junior obligations of the redevelopment company have been disposed of and the investment by the savings bank or banks in the redevelopment company consists solely of obligations secured by a first mortgage on the property of the redevelopment company.

A saving bank or banks sponsoring a redevelopment cooperative apartment housing project are hereby authorized to subscribe to the shares of such redevelopment company for a total purchase price not exceeding $10,000, and to advance to such company the funds required for the development of the plan of the project undertaken by such company upon issuance to the bank or banks by the company of income debenture certificates in such aggregate principal amount equal to the aggregate funds from time to time advanced by the bank or banks for planning purposes. In no event shall the aggregate amount of such advances for planning funds exceed the greater of:

The aggregate investment made by any savings bank in mortgage loans to redevelopment companies shall be subject to the limitations contained in Banking Law, section 235(28). The aggregate investment by any savings bank in the stock and obligations (other than obligations evidencing a mortgage loan) of redevelopment companies shall be subject to the limitations contained in Banking Law, section 235(21)(b).

The aggregate investment by any savings bank in the stock and obligations (including obligations evidencing mortgage loans) of any redevelopment company shall not exceed the lesser of three percent of its assets or 16²/₃ percent of its net worth.

A savings bank sponsoring a redevelopment cooperative apartment housing project is authorized to loan to the company undertaking such project the amount required by the redevelopment company for the acquisition of title to the area and such loan, together with the aggregate principal amount of the income debenture certificates representing the advance planning funds of the company, shall be secured by a first mortgage upon the entire area of the redevelopment project. Upon the execution and delivery of such first mortgage, the income debenture certificates shall be cancelled by the bank and delivered to the company.

A savings bank sponsoring a redevelopment cooperative apartment housing project is authorized to enter into a building loan contract with a redevelopment company and to invest its funds in the first lien bonds of such company issued under a trust indenture and pursuant to the building loan contract or a building loan bond and mortgage under which advances are made pursuant to the building loan contract. Such construction loan shall have a maturity not exceeding two years, provided that the investment by such savings bank in mortgage loans:

The estimated cost of a redevelopment cooperative apartment housing project prior to its completion shall be certified as to its reasonableness and correctness by an independent engineering organization and shall include for the purpose of arriving at the estimated cost, the cost to the company of the lands owned by the company, the cost of demolition, the cost of constructing the improvements, including planning, designing, engineering and landscaping, the cost of relocating tenants, the cost of interest and other carrying charges during the period of acquisition and of construction, all other costs necessarily incurred and properly attributable to undertaking, constructing and completing the project, and an allowance for working capital which shall not exceed an amount equal to three percent of the estimated cost.

No redevelopment company owning, constructing or planning a cooperative apartment housing redevelopment project and sponsored by one or more savings banks shall acquire any interest in any real property other than a title in fee, nor shall it acquire any real property unless at the time of acquisition it shall obtain an opinion of qualified counsel or a policy of title insurance of a title company authorized to insure titles on real estate in the State of New York certifying that good and marketable title in fee is vested in the redevelopment company, provided that a redevelopment company may acquire an interest in real property, other than a title in fee, upon the prior written approval of the superintendent.

A savings bank participating in the financing of a redevelopment company undertaking a cooperative apartment housing redevelopment project shall not at any time own or acquire any greater proportionate interest in the stock or junior obligations of such redevelopment company than its proportionate interest in the senior obligations of such company.

Any investment by a savings bank in the stock and obligations of a redevelopment company owning, constructing, or planning a cooperative apartment housing redevelopment project shall be entered on its books at the actual cost thereof and shall not thereafter be carried on its books at a value exceeding such cost as reduced by the proportionate share of the depreciation taken by such redevelopment company on the buildings and improvements owned by it which the investment of the savings bank bears to the total investment in such redevelopment company.