Guarantee of loans

§ 8. Guarantee of loans. (a) The fund is authorized to guarantee\nrepayments of a loan made by a lending institution to provide funding\nfor small business or housing project as defined herein, not to exceed\neighty per centum of the principal amount of the obligation, upon such\nterms and conditions as the fund may prescribe, provided that the\naggregate amount of the unpaid balance of all obligations so guaranteed\nand outstanding at any one time shall not exceed one million dollars\nduring the first fiscal year of operations of the fund, and in any\nsucceeding fiscal year, five times the average annual balance in the\nloan guarantee fund for the preceding fiscal year, and provided further,\nhowever, that the total potential liability of the fund to a lending\ninstitution on behalf of any one borrower shall not exceed one hundred\nfifty thousand dollars.\n (b) The fund is also authorized to guarantee repayments of loans made\nby a lending institution to a purchaser of either a condominium unit in\na multiple dwelling organized under the condominium act, or shares of\nstock in a cooperative corporation which owns a multiple dwelling, where\nsuch purchaser intends to reside in such condominium unit or such\ncooperatively-owned multiple dwelling. The amount of such guarantee\nshall not exceed the lesser of eighty per centum of the purchase price\nof the unit or of the shares of stock allocable to the unit, as the case\nmay be, or $25,000; and the term of the guarantee shall not exceed\ntwenty-five years. No loan shall be guaranteed if interest thereon\nexceeds the legal rate. The aggregate amount of the unpaid balance of\nall obligations guaranteed under this subdivision and subdivision (a)\nhereof shall not exceed one million dollars during the first fiscal year\nof operation hereunder and in any succeeding fiscal year, five times the\naverage annual balance in the loan guarantee fund for the preceding\nfiscal year hereunder.\n