The fund may be used for the following purposes:

1. (1) to make loans on the condition that:

   1. (A) the interest rate for each loan is less than or equal to the market interest rate;
   2. (B) principal and interest payments on each loan will commence not later than one year after completion of the project for which the loan was made, and each loan will be fully amortized not later than 20 years after the completion of the project except when an applicant is designated disadvantaged as defined under §371.24 of this title (relating to Disadvantaged Community Program through Loan Subsidies), in which case, each loan will be fully amortized not later than 30 years after the completion of the project;
   3. (C) the recipient of each loan will establish a dedicated source of revenue for the repayment of the loan; and
   4. (D) the fund will be credited with all payments of principal and interest on each loan; and
2. (2) to buy or refinance the debt obligation of a municipality or an intermunicipal or interstate agency within the State at an interest rate that is less than or equal to the market interest rate in any case in which a debt obligation is incurred after July 1, 1993;
3. (3) to guarantee or purchase insurance for a bond (all of the proceeds of which finance a project eligible for assistance under this section) if the guarantee or purchase would improve credit market access or reduce the interest rate applicable to the bond;
4. (4) as a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by the board if the proceeds of the sale of the bonds will be deposited into the fund;
5. (5) to earn interest on the amounts deposited into the fund; and
6. (6) to cover the reasonable costs of administration of the programs under the chapter up to 4.0% of the funds allotted to the State.

Source Note:The provisions of this §371.12 adopted to be effective March 18, 1997, 22 TexReg 2502; amended to be effective December 4, 2001, 26 TexReg 9911.