[Code of Federal Regulations]

[Title 42, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR57.1505]



[Page 293-294]

 

                         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. 57.1505  Approval of applications.



    (a) General. Any application for loan guarantee or interest 

subsidies, or for a combination of both, may be approved by the 

Secretary, after consultation with the Council, only if he makes each of 

the applicable determinations set forth in section 721(c) of the Act. In 

addition:

    (1) Any such approval shall be subject to compliance by the 

applicant with the applicable provisions set forth in Sec. Sec. 57.106, 

57.107, 57.108, and 57.110: Provided however, That for purposes of the 

title assurance in Sec. 57.107(a) the period shall be not less than 20 

years or the term of the guaranteed loan, whichever is longer or in the 

case of interim facilities, the term of the guaranteed loan, and

    (2) Any such application may be approved by the Secretary only if he 

determines:

    (i) That the applicant will have sufficient financial resources to 

enable him to comply with the terms and conditions of the loan;

    (ii) That the applicant has the necessary legal authority to 

finance, construct, and maintain the proposed proj ect, to apply for and 

receive the loan, and to pledge or mortgage any assets or revenues to be 

given as security for such loan;

    (iii) That the loan will be made only with respect to the initial 

permanent financing of the project;

    (iv) That the loan will be secured by a lien against the facilities 

to be constructed or against other security satisfactory to the 

Secretary specified in Sec. 57.2210;

    (v) That the rate of interest on the loan does not exceed such 

percent per annum as the Secretary determines to be reasonable, taking 

into account the range of interest rates prevailing in the private 

market for similar loans and the risks assumed by the United States; and

    (vi) Such additional determinations as the Secretary finds necessary 

with respect to particular applications in order to protect the 

financial interests of the United States.

    (b) Loan guarantees. In addition to the requirements of paragraph 

(a) of this section, any application for a loan guarantee may be 

approved by the Secretary only if he determines that the loan with 

respect to which such guarantee is sought would not be available to the 

applicant on reasonable terms and conditions without such guarantee. To 

assist the Secretary in making such determination, each applicant for a 

loan guarantee shall submit statements from at least three non-Federal 

institutions normally engaged in making long-term loans for 

construction, describing whether, and the terms and conditions under 

which, each institution would make a loan to the applicant for the 

project described in the application.

    (c) Interest subsidies. In addition to the requirements of paragraph 

(a) of



[[Page 294]]



this section, any application for interest subsidies may be approved by 

the Secretary only if he determines that without such interest subsidy 

payments the applicant would not, over a substantial portion of the loan 

term, be able to repay the principal and interest of the loan without 

jeopardizing the quality of the educational program.