(b) Eligible project. A grant under section 1625 may be made only for a construction and/or modernization project designed to:

1. (1) Eliminate or prevent safety hazards which under Federal, State, and/or local fire, building or life safety codes or regulations, will, in the judgment of the Secretary result in one or more of the following:

   1. (i) Loss of licensure for the facility.
   2. (ii) Closing of all or a substantial part of the facility,
   3. (iii) Loss of eligibility for reimbursement under title XVIII or title XIX of the Social Security Act; or

2. (2) Avoid noncompliance with State licensure or voluntary accreditation standards where noncompliance will, in the judgment of the Secretary, result in one or both of the following:

   1. (i) Loss of licensure for the facility,
   2. (ii) Loss of accreditation resulting in loss of eligibility for reimbursement under title XVIII or title XIX of the Social Security Act.