guarantee of loans for acquisition of property

guarantee of loans for acquisition of property Sec. 108. Section 108 of the Housing and Community Development Act of 1974 is amended— (1) by striking out subsections (a) and (b); (2) by redesignating subsections (c), (d), (e), (f), and (g) as subsections (f), (g), (h), (i), and (j), respectively; (3) by inserting before subsection (f), as redesignated, the following: “(a) The Secretary is authorized, upon such terms and conditions as the Secretary may prescribe, to guarantee and make commitments to guarantee the notes or other obligations issued by units of general local government, or by public agencies designated by such units of general local government, for the purposes of financing acquisition of real property or the rehabilitation of real property owned by the unit of general local government (including such related expenses as the Secretary may permit by regulation). Notes or other obligations guaranteed pursuant to this section shall be in such form and denominations, have such maturities, and be subject to such conditions as may be prescribed by regulations issued by the Secretary. “(b) No guarantee or commitment to guarantee shall be made with respect to any note or other obligation if the issuer’s total outstanding notes or obligations guaranteed under this section would thereby 91 STAT. 1124exceed an amount, equal to three times the amount of the grant approval for the issuer pursuant to section 106. “(c) Notwithstanding any other provision of this title, grants allocated to an issuer pursuant to this title (including program income derived therefrom) are authorized for use in the payment of principal and interest due (including such servicing, underwriting, or other costs as may be specified in regulations of the Secretary) on the notes or other obligations guaranteed pursuant to this section. “(d) To assure the repayment of notes or other obligations and charges incurred under this section and as a condition for receiving such guarantees, the Secretary shall require the issuer to— “(1) enter into a contract, in a form acceptable to the Secretary, for repayment of notes or other obligations guaranteed hereunder; “(2) pledge any grant approved or for which the issuer may become eligible under this title; and “(3) furnish, at the discretion of the Secretary, such other security as may be deemed appropriate by the Secretary in making such guarantees, including increments in local tax receipts generated by the activities assisted under this title or dispositions proceeds from the sale of land or rehabilitated property. “(e) The Secretary is authorized, notwithstanding any other provision of this title, to apply grants pledged pursuant to subsection (d)(2) to any repayments due the United States as a result of such guarantees.”; (4) by striking out, in the first sentence of subsection (h), as redesignated, the following: “may, at the option of the issuing unit of general local government or designated agency,” and inserting in lieu thereof “shall”; (5) by striking out, in the second sentence of subsection (h), as redesignated, the following: “In the event that taxable obligations are issued and guaranteed, the Secretary is authorized to make, and to contract to make, grants” and inserting in lieu thereof “The Secretary is authorized to make, and to contract to make, grants, in such amounts as may be approved in appropriations Acts,”; (6) by striking out “such unit or agency has elected to issue as a taxable obligation pursuant to subsection (e) of” in subsection (j), as redesignated, and inserting in lieu thereof “is guaranteed pursuant to”; and (7) by adding at the end thereof the following: “(k) Notwithstanding any other provision of this section, the total amount of outstanding obligations guaranteed on a cumulative basis by the Secretary pursuant to subsection (a) shall not at any time exceed $3,500,000,000 or such higher amount as may be authorized to be appropriated for sections 106 and 107 for any fiscal year.”.