limitations on guarantees and loans

limitations on guarantees and loans Sec. 716. (a) No guarantee or loan shall be made under this part unless the Secretary has determined that the new community development program represents an acceptable financial risk to the United States, taking into consideration (1) the financial and security interests of the United States, including the manner in which the developer proposes to finance and schedule land acquisition, hind development, and marketing, and (2) the public purposes of this part and the special problems involved in financing new communities, including (i) the large amount of initial capital required to finance sound new communities, (ii) the extended period before initial returns can be expected, and (iii) the irregular pattern of cash returns characteristic of this type of development. (b) The Secretary shall take such steps us he considers reasonable to assure that bonds, debentures, notes, and other obligations guaranteed, or with repect to which interest loans are made, under this part will— (1) be issued to 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; (2) bear interest at a rate satisfactory to the Secretary; (3) contain or be subject to repayment, maturity, and other provisions satisfactory’ to the Secretary; and (4) contain or be subject to provisions with respect to the protection of the security interests of the United States, including any provisions deemed appropriate by the Secretary relating to subrogation, liens, and releases of liens, payment of taxes, cost certification procedures, escrow or trusteeship requirements or other matters.