GUARANTEE OF OBLIGATIONS BACKED BY SECTION 108 LOANS.

SEC. 233. GUARANTEE OF OBLIGATIONS BACKED BY SECTION 108 LOANS. Section 108 of the Housing and Community Development Act of 1974 (42 U.S.C. 5308) is amended by adding after subsection (q) (as added by section 232(a)(1) of this Act) the following new subsection: “(r) Guarantee of Obligations Backed by Loans.— “(1) Authority.—The Secretary may, upon such terms and conditions as the Secretary considers appropriate, guarantee the timely payment of the principal of and interest on such trust certificates or other obligations as may— “(A) be offered by the Secretary or by any other offeror approved for purposes of this subsection by the Secretary; and “(B) be based on and backed by a trust or pool com-posed of notes or other obligations guaranteed or eligible for guarantee by the Secretary under this section. “(2) Full faith and credit.—To the same extent as provided in subsection (f), the full faith and credit of the United States is pledged to the payment of all amounts that may be required to be paid under any guarantee made by the Secretary under this subsection. “(3) Subrogation.—If the Secretary pays a claim under a guarantee made under this section, the Secretary shall be subrogated for all the rights of the holder of the guaranteed certificate or obligation with respect to such certificate or obligation. 108 STAT. 369 “(4) Effect of laws.—No State or local law, and no Federal law, shall preclude or limit the exercise by the Secretary of— “(A) the power to contract with respect to public offerings and other sales of notes, trust certificates, and other obligations guaranteed under this section upon such terms and conditions as the Secretary deems appropriate; “(B) the right to enforce any such contract by any means deemed appropriate by the Secretary; and “(C) any ownership rights of the Secretary, as applicable, in notes, certificates, or other obligations guaranteed under this section, or constituting the trust or pool against which trust certificates, or other obligations guaranteed under this section, are offered.”.