Sec. 05.05.02.16. General Provisions

A. Issuance of Bonds and Notes.

(1) Timing. The Administration may obtain funds for loans to finance projects from any source authorized by law, particularly by issuing bonds or notes to be repaid from revenues of the project, federal subsidies made in connection with the project, or payments made by an insurer, guarantor, or credit enhancer of the loans or the bonds. The timing of any bond or note sale and the acceptability of the interest rate to be paid by the Administration are solely within the discretion of the Secretary.

(2) Letter of Intent. The Administration generally requires a sponsor whose loan will be funded out of the proceeds of tax-exempt bonds or notes to execute a letter of intent to use a minimum amount of bond or note proceeds for an acquisition or construction loan to undertake a project at a specified location. The letters shall be accompanied by any required nonusage fee. If the sponsor fails to close a loan with the proceeds of bonds issued in whole or in part on behalf of the sponsor or the bonds or notes are not issued, the Administration will retain the fee.

(3) Rights of Bond and Note Holders. In the event of any conflict, whether expressly as stated, the rights of sponsors or borrowers under any agreement with the Administration, which loan is financed by notes or bonds issued pursuant to a certificate of authorization or bond resolution, are subject to the rights of holders and owners of the Administration's bonds or notes issued under that authorizing certificate or resolution.

B. Waiver. The Secretary may waive or vary particular provisions of these regulations to the extent that the waiver is not inconsistent with the Act or the Internal Revenue Code, or contrary to the provisions of any applicable bond certificate or resolution:

(1) To conform to the requirements of any federal agency in connection with any project with respect to which federal assistance is sought; or

(2) In exceptional circumstances, if, in the written determination of the Secretary, the application of these regulations in a specific case, or in an emergency situation, would be inequitable or contrary to the purposes of the Act.

C. Severability Clause. If any clause, sentence, paragraph, section, or part of these regulations is adjudged invalid, the judgment does not affect, impair, or invalidate the remainder of them, but shall be confined in its operation to the clause, sentence, paragraph, section, or part of it directly involved in the controversy in which the judgment is rendered.

D. False Statements. A sponsor who knowingly makes or causes to be made a false statement or report, whether in the nature of an understatement or overstatement of financial condition or any other fact material to the Department's action, shall be subject to immediate acceleration of the loan, in addition to the criminal penalties authorized by the Act.

E. Delegation. The Secretary may delegate to the Director of the Administration or to any other official or employee of the Department or Administration the authority to execute or approve any program documents or loan documents, including commitments and letters of intent.