§ 1837-b. Loans to local development corporations. 1. No loan shall be
made by the authority under the provisions of this subtitle with respect
to an eligible project unless: (a) the local development corporation has
obtained firm commitments satisfactory to the authority from responsible
financial sources, which may include a federal agency or the project
occupant, for the total project cost exclusive of any loan requested
from the authority; (b) the local development corporation has obtained a
firm commitment satisfactory to the authority from the project occupant
to lease or use the project after it has been completed; (c) the
principal amount of such loan is forty percent or less of the project
cost, except as provided in paragraphs (a) and (b) of subdivision two of
section eighteen hundred three and paragraph (a) of subdivision seven of
section eighteen hundred twenty-three of this chapter; and (d) if such
loan is secured by a mortgage on the project, such mortgage is not a
junior encumbrance on the project by more than fifty percent of the
project cost.

2. No loan shall be guaranteed by the authority with respect to a
project unless: (a) the project occupant has obtained firm commitments
satisfactory to the authority from banking organizations for the
financing of the project cost exclusive of the amount to be provided by
the project occupant; (b) the authority is satisfied that the project
occupant may be reasonably expected to comply with the terms of any loan
for which a guarantee is sought; (c) the amount of the guarantee is
eighty percent or less of the project cost; and (d) the loan is secured
by a mortgage or security instrument which is not a junior encumbrance
or other collateral deemed satisfactory to protect the authority's
interest.