No guaranty, other recourse obligation, mortgage, or security instrument, or other instrument (recourse instrument) given or entered into by a housing authority in connection with financing the acquisition, creation, modernization, rehabilitation, or replacement of a development, which exposes to foreclosure, loss, or levy any property of the housing authority other than the development being acquired, created, modernized, rehabilitated, or replaced with the proceeds of such financing shall be given or entered into, unless the authority's board of commissioners shall have specifically approved such action by resolution which finds that such action: (1) Is necessary and essential to acquiring the financing with respect to which such recourse instrument is given or entered into. (2) Will not unreasonably expose to loss or foreclosure property of the authority other than the development for which financing will be used. (3) Is prudent and sound as required under R.S. 40:489. (4) Is commercially reasonable, taking into account the characteristics of the transaction in which such recourse instrument would be given and its relative benefits and potential costs to the authority.
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