Limitation in repayment of investment in stock; limitations of dividends
Section 9. Except as provided in section sixteen, the stockholders of every such corporation shall be deemed, when they subscribe to and receive the stock thereof, to have agreed that they shall at no time receive or accept from the corporation, in repayment of their investment in its stock, any sums in excess of the par value, if any, of the stock, together with cumulative dividends thereon at the rate of eight per cent per annum, or in the case of stock without par value, cumulative dividends at the rate of eight per cent per annum of the amount of consideration paid for such stock, as determined by the housing board at the time it approves the issue of such stock. No stockholder in any such corporation shall receive any dividend in any one year in excess of the aforesaid rates, except that when in any prior year or years dividends in the amount authorized to be paid by such corporation shall not have been paid in full on the said stock, the stockholders shall be entitled to receive the payment of so much of such deficiency without interest, out of any earned surplus which may be available in any succeeding year, as the board of directors of the corporation shall determine. Nothing in this section shall be applicable to the payment of dividends out of profits from the sale of capital assets of the corporation. This section shall not apply to charitable corporations organized pursuant to and meeting the standards of section three, provided that all surplus earnings from projects there specified, however categorized, shall be employed in further urban redevelopment projects.
Regarding residential housing projects, the preceding limitations on repayments and dividends shall not apply whenever the United States Department of Housing and Urban Development hereinafter referred to as HUD or the Massachusetts Housing Finance Agency, hereinafter referred to as MHFA allows a change in the allowable distribution or other measure to increase the rate of return on investment, as defined by HUD or MHFA, for projects assisted by HUD or MHFA, subject to the approval of the department of housing and community development.