137
conditions that the Secretary considers necessary to
ensure that—
‘‘(A) the facility or structure purchased
continues to be used as a child care facility; and
‘‘(B) the facility receives a certification of
compliance under section 258(c).
‘‘(4) REFINANCING OF EXISTING FACILITIES.—
In the case of refinancing of an existing child care
facility, the Secretary shall prescribe any terms and
conditions that the Secretary considers necessary to
ensure that—
‘‘(A) the refinancing is used to lower the
monthly debt service costs (taking into account
any fees or charges connected with such refi-
nancing) of the existing facility;
‘‘(B) the proceeds of any refinancing will
be employed only to retire the existing indebted-
ness and pay the necessary cost of refinancing
on the existing facility;
‘‘(C) the existing facility is economically
viable; and
‘‘(D) the facility receives a certification of
compliance under section 258(c).
‘‘(5) LIMITATION ON INSURANCE AUTHORITY.—
The authority of the Secretary to enter into commit-
138
ments to insure mortgages under this subsection is
subject to section 257(f).’’.
SEC. 713. STUDY OF AVAILABILITY OF SECONDARY MAR-
KETS FOR MORTGAGES ON CHILD CARE FA-
CILITIES.
(a) STUDY.—The Secretary of the Treasury shall
conduct a study of the secondary mortgage markets to
determine—
(1) whether such a market exists for purchase
of mortgages eligible for insurance under sections
223(h) and 257 of the National Housing Act (as
added by this subtitle);
(2) whether such a market would affect the
availability of credit available for development of
child care facilities or would lower development costs
of such facilities; and
(3) the extent to which such a market or other
activities to provide credit enhancement for loans for
child care facilities is needed to meet the demand for
such facilities.
(b) REPORT.—Not later than 2 years after the date
of enactment of this Act, the Secretary of the Treasury
shall submit to Congress a report regarding the results
of the study conducted under this section.
139
SEC. 
714. 
TECHNICAL 
AND 
FINANCIAL 
ASSISTANCE
GRANTS.
(a) DEFINITIONS.—In this section:
(1) CHILD CARE FACILITY.—The term ‘‘child
care facility’’ has the meaning given that term in
section 257(a) of the National Housing Act, as
added by section 711 of this subtitle.
(2) ELIGIBLE INTERMEDIARY.—The term ‘‘eli-
gible intermediary’’ means a private, nonprofit inter-
mediary organization that has demonstrated experi-
ence in—
(A) financing the construction and renova-
tion of physical facilities;
(B) providing technical and financial as-
sistance to child care providers or other similar
entities;
(C) working with small businesses; and
(D) securing private sources for capital fi-
nancing; and
(3) ELIGIBLE RECIPIENT.—The term ‘‘eligible
recipient’’ means any—
(A) existing or start-up center-based or
home-based child care provider; and
(B) organization in the process of estab-
lishing a center-based or home-based child care
140
program or otherwise seeking to provide child
care services.
(4) EQUIPMENT.—The term ‘‘equipment’’ has
the meaning given that term in section 257(a) of the
National Housing Act, as added by section 711 of
this subtitle.
(b) GRANT AUTHORITY.—The Secretary of Housing
and Urban Development, in consultation with the Sec-
retary of Health and Human Services, may award grants
on a competitive basis in accordance with this section to
eligible intermediaries for use in accordance with sub-
sections (e) and (f).
(c) APPLICATIONS.—To be eligible to receive a grant
under this section an eligible intermediary shall submit to
the Secretary an application, in such form and containing
such information as the Secretary may require.
(d) PRIORITY.—In awarding grants under this sec-
tion the Secretary shall give a priority to applicants under
subsection (c) that serve low-income or rural areas.
(e) USE OF FUNDS.—
(1) REVOLVING
LOAN
FUND.—Each eligible
intermediary that receives a grant under this section
shall deposit the grant amount into a child care re-
volving loan fund established by the eligible inter-
mediary.
141
(2) PAYMENTS FROM FUND.—Subject to sub-
section (f), from amounts deposited into the revolv-
ing loan fund under paragraph (1), each eligible
intermediary shall provide technical and financial as-
sistance (in the form of loans, grants, investments,
guarantees, interest subsidies, and other appropriate
forms of assistance) to eligible recipients for the ac-
quisition or improvement of child care facilities or
equipment.
(3) LOAN REPAYMENTS AND INVESTMENT PRO-
CEEDS.—Any amount received by an eligible inter-
mediary from an eligible recipient in the form of a
loan repayment or investment proceeds shall be de-
posited into the child care revolving fund of the eligi-
ble intermediary for redistribution to other eligible
recipients in accordance with this section.
(f) ALLOCATION OF FUNDS.—Of the amounts dis-
tributed from the revolving loan fund of an eligible inter-
mediary under subsection (e)(2) in each fiscal year—
(1) not less than 50 percent shall be used for
the renovation or construction of child care facilities
or the acquisition of equipment by eligible recipients,
except that the amount made available to any eligi-
ble recipient under this paragraph may not to exceed
40 percent of the total costs incurred by the eligible