A. For the purposes of the Municipal Mortgage Finance Act, two or more municipalities may enter into an agreement designating one such municipality as issuer and establishing as the area of operation of the issuer the combined areas of operation of such participating municipalities or any portion thereof. The agreement shall be approved by the governing body of each such municipality and shall contain provisions:

(1)     defining the area of operation of the issuer;

(2)     providing a method for allocating available net proceeds among the areas of operation of participating municipalities and providing for the reallocation to the other participating municipalities of all or any portion of such funds not utilized to purchase mortgage loans within a stated period of time;

(3)     providing for the approval by the governing body of each participating municipality of the issuance, by the issuer, of each series of bonds and of the forms of documents prepared in connection therewith; and

(4)     containing such covenants as may be agreed upon by the participating municipalities.

B. No municipality which is a party to an agreement may issue bonds pursuant to the Municipal Mortgage Finance Act except as permitted by the terms of the agreement.

C. No issuer, whether or not such issuer shall be comprised of more than one municipality pursuant to an agreement, may issue bonds pursuant to the Municipal Mortgage Finance Act until at least seventy-five percent of available net proceeds in its area [of] operation have been disbursed to purchase mortgage loans.