[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: 42CFR57.1507]



[Page 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. 57.1507  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 proj ect 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.