Page:United States Statutes at Large Volume 124.djvu/4060

 124 STAT. 4034 PUBLIC LAW 111–358—JAN. 4, 2011 ‘‘(4) TERMS AND CONDITIONS FOR LOAN GUARANTEES.—The loans guaranteed under this subsection shall be subject to such terms and conditions as the Secretary may prescribe, except that— ‘‘(A) the final maturity of such loans made or guaran- teed may not exceed the lesser of— ‘‘(i) 30 years; or ‘‘(ii) 90 percent of the useful life of any physical asset to be financed by the loan; ‘‘(B) a loan guaranteed under this subsection may not be subordinated to another debt contracted by the borrower or to any other claims against the borrowers in the case of default; ‘‘(C) a loan may not be guaranteed under this sub- section unless the Secretary determines that the lender is responsible and that provision is made for servicing the loan on reasonable terms and in a manner that ade- quately protects the financial interest of the United States; ‘‘(D) a loan may not be guaranteed under this sub- section if— ‘‘(i) the income from the loan is excluded from gross income for purposes of chapter 1 of the Internal Revenue Code of 1986; or ‘‘(ii) the guarantee provides significant collateral or security, as determined by the Secretary in coordina- tion with the Secretary of the Treasury, for other obligations the income from which is so excluded; ‘‘(E) any guarantee provided under this subsection shall be conclusive evidence that— ‘‘(i) the guarantee has been properly obtained; ‘‘(ii) the underlying loan qualified for the guar- antee; and ‘‘(iii) absent fraud or material misrepresentation by the holder, the guarantee is presumed to be valid, legal, and enforceable; ‘‘(F) the Secretary may not extend credit assistance unless the Secretary has determined that there is a reason- able assurance of repayment; and ‘‘(G) new loan guarantees may not be committed except to the extent that appropriations of budget authority to cover their costs are made in advance, as required under section 504 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661c). ‘‘(5) PAYMENT OF LOSSES.— ‘‘(A) IN GENERAL.—If, as a result of a default by a borrower under a loan guaranteed under this subsection, after the holder has made such further collection efforts and instituted such enforcement proceedings as the Sec- retary may require, the Secretary determines that the holder has suffered a loss, the Secretary shall pay to the holder the percentage of the loss specified in the guarantee contract. Upon making any such payment, the Secretary shall be subrogated to all the rights of the recipient of the payment. The Secretary shall be entitled to recover from the borrower the amount of any payments made pursuant to any guarantee entered into under this section.