Section 20. A city or town in which an operating agency has been organized may raise and appropriate, or may borrow, or may agree with such agency or with the federal government or the commonwealth to raise and appropriate or to borrow, in aid of such agency, such sums as may be necessary for:—
(1) defraying all the development, acquisition and operating costs of a clearance, urban renewal, community renewal, relocation, rehabilitation or low-rent housing project within such city or town; or
(2) defraying such part of the development, acquisition and operating costs of any such project to which either the federal government, pursuant to federal legislation, or any other source has rendered or has agreed to render financial assistance, as will not be met by loans other than temporary loans or by contributions or grants other than annual or other contributions and grants in the nature of reimbursement from the federal government or from any such other source; and for
(3) the making of relocation payments by such agency; and
(4) repaying any loss which the city or town has agreed to bear and which is incurred as a result of the early taking, acquisition or clearance of land not used for urban renewal purposes.