§4635 Planning and Other Preliminary Expenses for Additional Housing

Summary

Allows the head of the federal agency running a project to make or approve preconstruction loans as part of the project costs to nonprofits, limited-dividend groups, cooperatives, or public agencies. The loans help pay for planning and getting mortgages insured by the federal government for housing for people displaced by the project. The loans can cover up to 80% of the reasonable expected planning and financing costs before permanent financing is in place. Examples of covered expenses include market studies, site work, architect fees, buying land, application and mortgage commitment charges, and construction loan fees. Loans to for-profit groups must carry a market interest rate set by the agency head. Other loans are interest-free. The agency head sets repayment rules and can require repayment when the project is finished or sooner. Except for loans to for-profit groups, the agency may cancel part or all of a loan if it finds that permanent financing cannot be obtained. When a loan is repaid, the federal share is returned to the account that made the loan, or if that account no longer exists, the money goes to the Treasury as miscellaneous receipts as the Secretary of the Treasury decides.