Any loan insured by the corporation under this chapter shall (1) be made for a project; (2) be made to a borrower approved by the corporation as responsible and creditworthy; (3) in the case of real property, be secured by a mortgage on the property, be made in a principal amount not exceeding ninety per cent of the cost of the property, and have a maturity date not later than twenty-five years from the date of the mortgage; (4) in the case of machinery and equipment, be secured by a security interest in the machinery and equipment, be made in a principal amount not exceeding eighty per cent of the cost of the machinery and equipment, and have a maturity not later than ten years from the date of the loan; (5) contain amortization provisions satisfactory to the corporation; and (6) be in such principal amount and form, and contain such terms, conditions and provisions with respect to the payment of fees, expenses and other costs, property insurance, repairs, alterations, payment of taxes and assessments, delinquency charges, default remedies, additional security and other matters as the corporation may determine. Any contract of insurance executed by the corporation under this chapter shall be conclusive evidence of eligibility for such insurance, and the validity of any contract of insurance so executed or of an advance commitment to insure shall be incontestable in the hands of an approved borrower and an insured party from the date of execution and delivery of the contract or commitment, except for fraud or misrepresentation on the part of the borrower and, as to commitments to insure, noncompliance with the commitment or corporation rules or regulations in force at the time of issuance of the commitment.

(P.A. 81-388, S. 5, 12; P.A. 88-265, S. 18, 36; June 12 Sp. Sess. P.A. 12-1, S. 152.)

History: P.A. 88-265 deleted provisions re initial financing from special obligation rate or bond proceeds, deleted provisions re lenders' committee and made other technical changes; pursuant to June 12 Sp. Sess. P.A. 12-1, “authority” was changed editorially by the Revisors to “corporation”, effective July 1, 2012.