the completion, enhancement, or expansion of 
any project that— 
(i) is selected under section 206; or 
(ii) otherwise meets the requirements 
of section 206. 
(2) LIMITATION ON REFINANCING OF INTERIM 
CONSTRUCTION FINANCING.—A secured loan under 
paragraph (1) shall not be used to refinance interim 
construction financing under paragraph (1)(B) later 
than 1 year after the date of substantial completion 
of the applicable project. 
(3) RISK
ASSESSMENT.—Before entering into 
an agreement under this subsection for a secured 
loan, the Secretary, in consultation with the Director 
of the Office of Management and Budget and each 
rating agency providing a preliminary rating opinion 
letter under section 206(a)(1)(B), shall determine an 
appropriate capital reserve subsidy amount for the 
secured loan, taking into account each such prelimi-
nary rating opinion letter. 
(4) 
INVESTMENT-GRADE
RATING
REQUIRE-
MENT.—The execution of a secured loan under this 
section shall be contingent on receipt by the senior 
obligations of the project of an investment-grade rat-
ing. 
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(b) TERMS AND LIMITATIONS.— 
(1) IN GENERAL.—A secured loan provided for 
a project under this section shall be subject to such 
terms and conditions, and contain such covenants, 
representations, warranties, and requirements (in-
cluding requirements for audits), as the Secretary 
determines to be appropriate. 
(2) MAXIMUM AMOUNT.—The amount of a se-
cured loan under this section shall not exceed the 
lesser of— 
(A) an amount equal to 100 percent of the 
reasonably anticipated eligible project costs; and 
(B) if the secured loan does not receive an 
investment-grade rating, the amount of the sen-
ior project obligations of the project. 
(3) PAYMENT.—A secured loan under this sec-
tion— 
(A) shall be payable, in whole or in part, 
from State or local taxes, user fees, or other 
dedicated revenue sources that also secure the 
senior project obligations of the relevant 
project; 
(B) shall include a rate covenant, coverage 
requirement, or similar security feature sup-
porting the project obligations; and 
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(C) may have a lien on revenues described 
in subparagraph (A), subject to any lien secur-
ing project obligations. 
(4) INTEREST RATE.—The interest rate on a 
secured loan under this section shall be not more 
than the yield on United States Treasury securities 
of a similar maturity to the maturity of the secured 
loan on the date of execution of the loan agreement, 
as determined by the Secretary. 
(5) MATURITY DATE.—The final maturity date 
of a secured loan under this section shall be not 
later than 35 years after the date of substantial 
completion of the relevant project. 
(6) 
NONSUBORDINATION.—A 
secured 
loan 
under this section shall not be subordinated to the 
claims of any holder of project obligations in the 
event of bankruptcy, insolvency, or liquidation of the 
obligor of the project. 
(7) FEES.—The Secretary may establish fees at 
a level sufficient to cover all or a portion of the costs 
to the Federal Government of making a secured loan 
under this section. 
(8) NON-FEDERAL SHARE.—The proceeds of a 
secured loan under this section may be used to pay 
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any non-Federal share of project costs required if 
the loan is repayable from non-Federal funds. 
(c) REPAYMENT.— 
(1) SCHEDULE.—The Secretary shall establish 
a repayment schedule for each secured loan provided 
under this section, based on the projected cash flow 
from project revenues and other repayment sources. 
(2) COMMENCEMENT.—Scheduled loan repay-
ment of principal or interest on a secured loan under 
this section shall commence not later than 5 years 
after the date of substantial completion of the 
project. 
(3) DEFERRED PAYMENTS.— 
(A) AUTHORIZATION.—If, at any time 
after the date of substantial completion of a 
project for which a secured loan is provided 
under this section, the project is unable to gen-
erate sufficient revenues to pay the scheduled 
loan repayments of principal and interest on the 
secured loan, the Secretary may allow the obli-
gor, subject to subparagraph (C), to add unpaid 
principal and interest to the outstanding bal-
ance of the secured loan. 
(B) INTEREST.—Any payment deferred 
under subparagraph (A) shall— 
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(i) continue to accrue interest in ac-
cordance with subsection (b)(4) until fully 
repaid; and 
(ii) be scheduled to be amortized over 
the remaining term of the secured loan. 
(C) CRITERIA.— 
(i) IN GENERAL.—Any payment defer-
ral under subparagraph (A) shall be con-
tingent on the project meeting such cri-
teria as the Secretary may establish. 
(ii) REPAYMENT
STANDARDS.—The 
criteria established under clause (i) shall 
include standards for reasonable assurance 
of repayment. 
(4) PREPAYMENT.— 
(A) USE OF EXCESS REVENUES.—Any ex-
cess revenues that remain after satisfying 
scheduled debt service requirements on the 
project obligations and secured loan and all de-
posit requirements under the terms of any trust 
agreement, bond resolution, or similar agree-
ment securing project obligations may be ap-
plied annually to prepay a secured loan under 
this section without penalty. 
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(B) 
USE
OF
PROCEEDS
OF
REFI-
NANCING.—A secured loan under this section 
may be prepaid at any time without penalty 
from the proceeds of refinancing from non-Fed-
eral funding sources. 
(d) SALE OF SECURED LOANS.— 
(1) IN GENERAL.—Subject to paragraph (2), as 
soon as practicable after the date of substantial 
completion of a project and after providing a notice 
to the obligor, the Secretary may sell to another en-
tity or reoffer into the capital markets a secured 
loan for a project under this section, if the Secretary 
determines that the sale or reoffering can be made 
on favorable terms. 
(2) CONSENT OF OBLIGOR.—In making a sale 
or reoffering under paragraph (1), the Secretary 
may not change the original terms and conditions of 
the secured loan without the written consent of the 
obligor. 
(e) LOAN GUARANTEES.— 
(1) IN GENERAL.—The Secretary may provide a 
loan guarantee to a lender in lieu of making a se-
cured loan under this section, if the Secretary deter-
mines that the budgetary cost of the loan guarantee 
is substantially the same as that of a secured loan. 
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