(1) In order to qualify for financing under the SABP program, the board shall determine that a project meets the following criteria:

(a) the project is in the public interest as determined at the public hearing conducted pursuant to ARM 8.97.1707 by the board or by the governing body of the local government unit in which the project is located. The public hearing requirement applies only to projects financed by federally tax-exempt bonds;

(b) the project, upon completion, will have complied with all applicable local, state and federal laws and regulations; and

(c) as required in 17-5-1526 (1) (e) and 17-5-1527 (11) (e) , MCA, the project applicant has submitted statements concerning the employment preference for Montana residents.

(2) For projects eligible to obtain financing from federally tax-exempt bonds, the following requirements must be met:

(a) eligible projects may consist of the acquisition of land and rights and interests in the land including the acquisition or construction of buildings, improvements or structures on the land; or the acquisition of fixtures, machinery, equipment and other tangible property so long as working capital is not financed.

(3) The board may finance projects for which the sole purpose is to provide residential housing as defined in ARM 8.97.1301(29) , through the SABP program only upon the following terms and conditions:

(a) the project must consist of at least eight units;

(b) a complete appraisal acceptable to the board and the financial institution, and in a format approved by the board indicating cost, market, and income values must be submitted with the application;

(c) the borrower and the project must comply with requirements contained in section 103(b) (4) (a) of the Internal Revenue Code, including the requirement that at least twenty percent (20%) of the units will be reserved for persons of low or moderate income as defined therein; and

(d) such other terms and conditions as may be required by the board.