Section 1836-E. Loan agreements

1. If the authority approves an application
  for  a  loan  under this subtitle, the local development corporation may
  enter into a loan agreement  with  the  employee  ownership  association
  whereby the local development corporation agrees to loan to the employee
  ownership  association  the  remaining  funds necessary for the eligible
  project.
    2. No such loan may exceed forty percent of the cost  of  the  project
  and  the  repayment  of such loan shall be secured by a mortgage thereon
  which shall not be a junior  encumbrance  thereon  by  more  than  fifty
  percent  of  such cost, and by means of the guarantees of the loans made
  by banking organizations which guaranty shall not exceed eighty  percent
  of the cost of the project, except as provided in paragraphs (a) and (b)
  of  subdivision  two of section eighteen hundred three and paragraph (a)
  of subdivision seven of section eighteen hundred  twenty-three  of  this
  chapter.
    3.  The  local  development  corporation  may  not enter into any loan
  agreement unless the authority determines through an appropriate  method
  that  there  is  reasonable  assurance of repayment. The authority shall
  establish such requirements  or  terms  as  it  may  deem  necessary  or
  desirable  to  secure  the  repayment  of  the  loan  and to protect the
  interests of the authority and the holders of its bonds.
    4. Subject to the requirements of  this  subtitle,  the  authority  is
  authorized  to  determine  the  form and substance of any loan agreement
  made pursuant to this subtitle.