Source: https://www.law.cornell.edu/uscode/text/20/1066b
Timestamp: 2019-04-22 12:19:47+00:00

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Subject to the limitations in section 1066c of this title, the Secretary is authorized to enter into insurance agreements to provide financial insurance to guarantee the full payment of principal and interest on qualified bonds upon the conditions set forth in subsections (b), (c) and (d).
limit loan collateralization, with respect to any loan made under this part, to 100 percent of the loan amount, except as otherwise required by the Secretary.
The payment of principal and interest on bonds shall be insured by the Secretary until such time as such bonds have been retired or canceled.
The Federal liability for delinquencies and default for bonds guaranteed under this part shall only become effective upon the exhaustion of all the funds held in the escrow account described in subsection (b)(8).
The Secretary shall create a letter of credit authorizing the Department of the Treasury to disburse funds to the designated bonding authority or its assignee.
The letter of credit shall be drawn upon in the amount determined by paragraph (5) of this subsection upon the certification of the designated bonding authority to the Secretary or the Secretary’s designee that there is a delinquency on 1 or more loans and there are insufficient funds available from loan repayments and the escrow account to make a scheduled payment of principal and interest on the bonds.
the amount available to the designated bonding authority from loan repayments and the escrow account.
All funds provided under the letter of credit shall be paid to the designated bonding authority within 2 business days following receipt of the certification described in paragraph (4).
Subject to subsection (c)(1) the full faith and credit of the United States is pledged to the payment of all funds which may be required to be paid under the provisions of this section.
Notwithstanding any other provision of law, a qualified bond guaranteed under this part may be sold to any party that offers terms that the Secretary determines are in the best interest of the eligible institution.
Section 1066e of this title, referred to in subsec. (b), was repealed by Pub. L. 105–244, title III, § 306(d), Oct. 7, 1998, 112 Stat. 1647.
Section was formerly classified to section 1132c–2 of this title prior to renumbering by Pub. L. 105–244.
A prior section 343 of Pub. L. 89–329 was classified to section 1068 of this title prior to the general amendment of this subchapter by Pub. L. 99–498.
2008—Subsec. (b)(8)(B)(ii). Pub. L. 110–315, § 314(b)(1)(B), inserted “within 120 days” after “loan proceeds”.
Pub. L. 110–315, § 314(b)(1)(A), which directed the substitution of “5” for “10”, could not be executed because “10” did not appear subsequent to amendment by Pub. L. 105–244, § 306(b)(1). See 1998 Amendment note below.
Subsec. (b)(12). Pub. L. 110–315, § 314(b)(2)–(4), added par. (12).
Subsec. (e). Pub. L. 110–315, § 320(2), inserted heading.
1998—Subsec. (a). Pub. L. 105–244, § 301(c)(5)(A), substituted “section 1066c” for “section 1132c–3”.
Subsec. (b). Pub. L. 105–244, § 301(c)(5)(B)(i), substituted “sections 1066d(1) and 1066e” for “sections 1132c–4(1) and 1132c–5” in introductory provisions.
Subsec. (b)(8). Pub. L. 105–244, § 306(b)(1), substituted “5 percent” for “10 percent” wherever appearing.
Subsec. (b)(10). Pub. L. 105–244, § 301(c)(5)(B)(ii), substituted “section 1066c” for “section 1132c–3”.
Subsec. (d). Pub. L. 105–244, § 301(c)(5)(B)(iii), made technical amendment to reference in original act which appears in text as reference to subsection (c)(1) of this section.
Subsec. (e). Pub. L. 105–244, § 306(b)(2), added subsec. (e).
1994—Subsec. (b)(8)(A). Pub. L. 103–382, § 360C(1)(A), inserted before semicolon “, with each eligible institution required to maintain in the escrow account an amount equal to 10 percent of the outstanding principal of all loans made to such institution under this part”.
Subsec. (b)(8)(B)(ii). Pub. L. 103–382, § 360C(1)(B), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “when all bonds under this part are retired or canceled, shall be divided among the eligible institutions making deposits into such account on the basis of the amount of each such institution’s deposit;”.
Subsec. (b)(11). Pub. L. 103–382, § 360C(2), substituted “conditions” for “regulations”.

References: § 306
 § 314
 § 314
 § 306
 § 314
 § 320
 § 301
 § 301
 § 306
 § 301
 § 301
 § 306
 § 360
 § 360
 § 360