(a) A Program loan: (1) may not be made if the Department determines that comparable private financing is available to the prospective borrower; and (2) may not exceed an amount the Secretary establishes by regulation. (b) (1) Except as provided under paragraphs (2), (3), (4), and (5) of this subsection, a Program loan of more than $5,000 shall be secured wholly or partly by a recorded mortgage or deed of trust on real property. (2) A Program loan to a political subdivision may be secured by a recorded mortgage, deed of trust on real property, or other security device acceptable to the Department. (3) A Program loan to a trust described in 42 U.S.C. § 1396p(d)(4) may be secured by a recorded mortgage, deed of trust on real property, or other security device acceptable to the Department. (4) (i) Subject to subparagraph (ii) of this paragraph, a Program loan to a member of a cooperative housing corporation may be secured by a perfected security interest in the member's cooperative interest. (ii) Before a Program loan is secured by a perfected security interest in the member's cooperative interest, the Department shall enter into an agreement with the cooperative housing corporation that establishes the rights and obligations of the Department and the cooperative housing corporation with respect to the secured cooperative interest. (5) A Program loan in the form of a grant may be unsecured or secured by a mortgage, deed of trust, or other security device acceptable to the Department. (c) Program loans shall be made to: (1) families of limited income owning and occupying the building to be rehabilitated; or (2) sponsors or nonprofit sponsors. (d) The Department may require that Program loans be insured. (e) A Program loan may cover: (1) costs of a rehabilitation project, including implementation costs such as appraisal, architectural, and engineering fees; and (2) closing costs of the Program loan. (f) The Department may modify the interest rate, the time or amount of payment, or any other term of a Program loan that is in default to facilitate repayment of the Program loan and achieve the purposes of the Program.
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