eligible obligations

eligible obligations Sec. 405. (a) Any bond, debenture, note or other obligation guaranteed under this title shall— (1) be issued by a new community developer, other than a public body, approved by the Secretary on the basis of financial, technical and administrative ability which demonstrates his capacity to carry out the proposed project; (2) be issued to and held by investors approved by, or meeting requirements prescribed by, the Secretary, or if an offering to the public is contemplated, be underwritten upon terms and conditions approved by the Secretary; 82 Stat. 515 (3) be issued to finance a program of land development (including acquisition or use of land) approved by the Secretary: Provided. That the Secretary shall, through cost certification procedures, escrow or trusteeship requirements, or other means, insure that all proceeds from the sale of obligations guaranteed under this title are expended pursuant to such program; (4) involve a principal obligation in an amount not to exceed the lesser of (A) 80 per centum of the Secretary’s estimate of the value of the property upon completion of the land development or (B) the sum of 75 per centum of the Secretary’s estimate of the value of the hind before development and 90 per centum of his estimate of the actual cost of the land development; (5) bear interest at a rate satisfactory to the Secretary, such interest to be exclusive of any service charges and fees that may be approved by the Secretary; (6) contain repayment and maturity provisions satisfactory to the Secretary; and (7) contain provisions which the Secretary shall prescribe with respect to the protection of the security interests of the United States (including subrogation provisions), liens and releases of liens, payment of taxes, and such other matters as the Secretary may, in his discretion, prescribe. (b) The outstanding principal obligations guaranteed under this title with respect to a single new community development project shall at no time exceed $50,000,000.