(a) The Authority may guarantee a loan made by a financial institution to an owner to finance the cost of rehabilitation of a housing accommodation or accommodations, subject to the requirements of this section.
(b) This guaranty shall constitute an undertaking by the Authority to pay promptly to the holder of a guaranteed loan or loans, any installment of principal or interest, upon which the borrower is in default.
(c) No guaranty shall be made by the Authority pursuant to this chapter unless:
(1) the housing accommodation with respect to which the guaranty is made is located in an area designated by the Authority as a Code Enforcement and Rehabilitation Area pursuant to section 121 of this chapter;
(2) the Executive Director certifies the owner is unable to secure the necessary funds for rehabilitation from ordinary commercial sources upon reasonable terms and conditions and that the loan with respect to which the guaranty is made is an acceptable risk, taking into consideration the need for the rehabilitation, the security available for the loan or loans, and the ability of the owner to repay the loan or loans;
(3) the loan with respect to which the guaranty is made does not exceed, in the aggregate, ninety percent of the cost of rehabilitation of the housing accommodation; and
(4) the Executive Director approves in advance all plans and specifications of the rehabilitation to be carried out.
(d) Any loan or loans with respect to which a guaranty is made shall be repaid, with interest at a rate as may be agreed upon by the owner, the financial institution and the Authority, in periodic payments of principal and interest, within a period not greater than ten (10) years. The loan may also contain other conditions, not inconsistent with the provisions of this chapter as may be prescribed by the Authority by regulation, or as may be agreed upon by the owner, the financial institution, and the Authority.
(e) The Executive Director shall by regulation prescribe for housing accommodations for which guaranties are made: (i) standards of repair, and (ii) schedules of maximum rent and rent increases.
(f) So long as any guaranteed loan remains outstanding, the Authority may:
(1) approve or disapprove in advance any sale by an owner of a housing accommodation or accommodations and the terms and conditions of the sale; and
(2) approve or disapprove in advance all borrowing by an owner which relies on the housing accommodation as security from any person, firm or corporation.
(g) If the Authority, pursuant to the terms of a guaranty, makes any payment upon a defaulted loan to the holder thereof, the Authority shall be subrogated to the rights of the holder.
(h) The directors, officers and employees of the Authority shall not be subject to any personal liability on account of any guaranty made by the Authority.