Page:United States Statutes at Large Volume 119.djvu/1136

 119 STAT. 1118

PUBLIC LAW 109–58—AUG. 8, 2005

(2) the Secretary has received from the borrower a payment in full for the cost of the obligation and deposited the payment into the Treasury. (c) AMOUNT.—Unless otherwise provided by law, a guarantee by the Secretary shall not exceed an amount equal to 80 percent of the project cost of the facility that is the subject of the guarantee, as estimated at the time at which the guarantee is issued. (d) REPAYMENT.— (1) IN GENERAL.—No guarantee shall be made unless the Secretary determines that there is reasonable prospect of repayment of the principal and interest on the obligation by the borrower. (2) AMOUNT.—No guarantee shall be made unless the Secretary determines that the amount of the obligation (when combined with amounts available to the borrower from other sources) will be sufficient to carry out the project. (3) SUBORDINATION.—The obligation shall be subject to the condition that the obligation is not subordinate to other financing. (e) INTEREST RATE.—An obligation shall bear interest at a rate that does not exceed a level that the Secretary determines appropriate, taking into account the prevailing rate of interest in the private sector for similar loans and risks. (f) TERM.—The term of an obligation shall require full repayment over a period not to exceed the lesser of— (1) 30 years; or (2) 90 percent of the projected useful life of the physical asset to be financed by the obligation (as determined by the Secretary). (g) DEFAULTS.— (1) PAYMENT BY SECRETARY.— (A) IN GENERAL.—If a borrower defaults on the obligation (as defined in regulations promulgated by the Secretary and specified in the guarantee contract), the holder of the guarantee shall have the right to demand payment of the unpaid amount from the Secretary. (B) PAYMENT REQUIRED.—Within such period as may be specified in the guarantee or related agreements, the Secretary shall pay to the holder of the guarantee the unpaid interest on, and unpaid principal of the obligation as to which the borrower has defaulted, unless the Secretary finds that there was no default by the borrower in the payment of interest or principal or that the default has been remedied. (C) FORBEARANCE.—Nothing in this subsection precludes any forbearance by the holder of the obligation for the benefit of the borrower which may be agreed upon by the parties to the obligation and approved by the Secretary. (2) SUBROGATION.— (A) IN GENERAL.—If the Secretary makes a payment under paragraph (1), the Secretary shall be subrogated to the rights of the recipient of the payment as specified in the guarantee or related agreements including, where appropriate, the authority (notwithstanding any other provision of law) to—

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