Section 41. The commonwealth, acting by and through the department, may enter into a contract or contracts with a housing authority for state financial assistance in the form of a grant by the commonwealth for the development cost of a housing project or projects or a part or parts of a housing project or projects for elderly persons of low income. The total amount of grants financed by bonds authorized prior to September first, nineteen hundred and eighty-three shall not exceed the sum of seven hundred and one million dollars; provided, however, that the amount expended pursuant to this section during any one fiscal year shall not exceed thirty-three million three hundred thousand dollars. The contract or contracts for financial assistance may provide for additional state financial assistance in the form of a guarantee by the commonwealth of notes of the housing authority issued to temporarily finance the development cost of such a project but the amount guaranteed on account of any project shall not exceed the amount of grant for that project. The total amount of all notes guaranteed pursuant to this section prior to September first, nineteen hundred and eighty-three shall not exceed seven hundred and one million dollars, exclusive of notes which may be issued for refunding purposes. Any excess between the completed cost of a project as determined by the department and the notes outstanding therefore may be retired from the proceeds of such notes and if so retired, shall not be used in computing the total amount of notes guaranteed by the commonwealth under this section. The provisions of sections thirty-four, thirty-four B and thirty-five shall, so far as apt, be applicable to contracts, grants, guarantees and notes authorized by this section.