The proceeds from the sale of the notes shall be used by the director for payment of any of the following:

1. 1. Costs and expenses incurred in the construction or acquisition of the project for which the grant or grants are being made.
2. 2. Legal and financial costs and expenses incurred in issuing and administering the notes.
3. 3. Costs for which the director will be entitled to receive reimbursement pursuant to the grant agreement.
4. 4. If authorized by the board, payment of interest to accrue on the notes during their life.
5. 5. Payment of the principal, premium or interest on other obligations, all or a portion of the proceeds of which were or are to be applied to the financing of the project to which the grant agreement relates.