The CDC ensures interim financing comes from an experienced, independent source meeting 13 CFR 120.890 (the TPL, another lender, or another CDC's project only), never from the Borrower or its Associates. It does not let a project be financed in any part by federal tax-exempt obligations; where state or local industrial development or revenue bonds fund the Third Party Loan or the Borrower's contribution, the liens are recorded before any title transfer to the issuer, any issuer lease is assigned to the TPL with payments serving as loan payments, SBA's lien is never subordinate to the issuer's, the bond-funded contribution is not repaid faster than the 504 loan without SBA approval, and no bond default can create a tax lien. Where historic rehabilitation tax credits are transferred, the lease to the tax credit investor and the sublease back have equal terms, comply with IRS rules, are submitted with the application and before closing for SBA counsel's review, and do not rank ahead of SBA's lien, and the loan is not an EPC/OC loan.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.