[Code of Federal Regulations]
[Title 42, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR57.1507]

[Page 288]
 
                         TITLE 42--PUBLIC HEALTH
 
    CHAPTER I--PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES
 
PART 57--GRANTS FOR CONSTRUCTION OF TEACHING FACILITIES, EDUCATIONAL IMPROVEMENTS, SCHOLARSHIPS AND STUDENT LOANS--Table of Contents
 
     Subpart P--Loan Guarantees and Interest Subsidies to Assist in 
   Construction of Teaching Facilities for Health Profession Personnel
 
Sec. 57.1507  Limitations applicable to loan guarantee.

    (a) The amount of loan with respect to which a guarantee is made 
under this subpart shall be determined by the Secretary based upon such 
considerations as the availability of funds and the applicant's need 
therefor; Provided, That: (1) Subject to paragraph (a)(2) of this 
section, no loan with respect to which a guarantee is made for any 
project under this subpart may be in an amount which, when added to the 
amount of any grant made with respect to such project under part B of 
title VII of the Act or any other law of the United States, or to the 
total of such grants, exceeds 90 percent of the eligible cost of 
construction of such project as determined by the Secretary;
    (2) Notwithstanding paragraph (a)(1) of this section, the Secretary 
may in particular cases guarantee loans in excess of the amount 
specified in paragraph (a)(1) of this section where he determines that, 
because of special circumstances, such additional loan guarantee will 
further the purposes of part B of title VII of the Act. In making such 
determinations, the Secretary will in each case consider the following 
factors:
    (i) The need for the project in the area to be served;
    (ii) The availability of financing for the project on reasonable 
terms and conditions without such additional loan guarantee;
    (iii) Whether the project can be constructed without such additional 
loan guarantee; and
    (iv) Other relevant factors consistent with the purpose of part B of 
title VII of the Act and this subpart.
    (3) In determining the cost of construction of the project there 
shall be excluded from such cost all fees, interest, and other charges 
relating or attributable to the financing of the project except the 
following:
    (i) Reasonable fees attributable to services rendered by legal 
counsel in connection with such loan;
    (ii) With the approval of the Secretary, reasonable fees 
attributable to the services of a financial advisor in assisting the 
applicant in securing the loan and arranging for repayment thereof; and
    (iii) Interest attributable to the interim financing of construction 
of the project prior to the initial permanent financing thereof.
    (b) No loan guarantee under this subpart shall apply to more than 90 
percent of the loss of principal of and interest on such loan incurred 
by the holder of such loan upon default by the applicant.