Sec. 8-257. Mortgages insured by authority to be legal investments. Certificate of title required.

(b) The property, real or personal, securing such loans shall be unencumbered except for reservations to the United States of America of fissionable materials and for leases, easements and, in the case of insured second mortgages, prior liens to the extent deemed appropriate by the authority. A certificate of title issued by some suitable person approved by the mortgagee or a policy of title insurance shall be lodged with the mortgagee until the mortgage loan is paid. Loans for construction or rehabilitation shall provide for advances at the discretion of the lender as the work progresses and shall not exceed the amount of the advance commitment to insure without the consent of the authority.