Sec. 8-253. Mortgage loans and insurance of mortgage payments. (a) The authority may make mortgage loans or upon application of a proposed mortgagee insure and make advance commitments to insure payments required by a loan for housing upon such terms and conditions as the authority may prescribe. Mortgage loans made or insured by the authority under this chapter may be for construction financing as well as permanent financing, and may provide financing for related facilities to the extent permitted by applicable authority regulations. Mortgage loans made or insured by the authority under this chapter shall be secured by a first or second mortgage. The aggregate principal amount of all mortgages so insured by the authority under this chapter and outstanding at any one time shall not exceed ten times the average annual balance for the preceding calendar year of funds on deposit in the Housing Mortgage Insurance Fund. The aggregate amount of principal obligations of all mortgages so insured shall not constitute indebtedness of the state of Connecticut. Any contract of insurance executed by the authority under this section shall be conclusive evidence of eligibility for such mortgage insurance and the validity of any contract of insurance so executed or of an advance commitment to issue such shall be incontestable in the hands of an approved mortgagee from the date of execution of such contract or commitment, except for fraud or misrepresentation on the part of such approved mortgagee and, as to commitments to insure, noncompliance with the terms of the advance commitment or authority regulations in force at the time of issuance of the advance commitment.