(1)The provisions of this section have effect with respect to the terms of advances under section 435.
(2)The advance, together with the interest on it, shall be secured by a mortgage of the land concerned; and an advance shall not be made unless the estate proposed to be mortgaged is either—
(a)an estate in fee simple absolute in possession, or
(b)an estate for a term of years absolute of which a period of not less that ten years in excess of the period fixed for the repayment of the advance remains unexpired on the date on which the mortgage is executed.
(3)The amount of the principal of the advance shall not exceed the value of the mortgage security or, as the case may be the value which it is estimated the mortgaged security will bear when the construction, conversion, alteration, enlargement, repair or improvement has been carried out; and the advance shall not be made except after a valuation duly made on behalf of the authority.
(4)Where the advance is for any of the purposes specified in section 435(1)(b) to (d) (construction, conversion, alteration, enlargement, repair or improvement) it may be made by instalments from time to time as the works progress.
(5)The mortgage deed shall provide—
(a)for repayments of the principal either by instalments of equal or unequal amounts, beginning on the date of the advance or at a later date, or at the end of a fixed period (with or without a provision allowing the authority to extend the period) or on the happening of a specified event before the end of that period, and
(b)for the payment of instalments of interest throughout the period beginning on the date of the advance and ending when the whole of the principal is repaid;
but subject to section 441 (waiver or reduction of payments in case of property requiring repair or improvement) and to section 446(1)(b) (assistance for first time buyers: part of loan interest-free for up to five years).
(6)The mortgage deed shall also provide that, notwithstanding the provisions referred to in subsection (5), the balance for the time being unpaid—
(a)shall become repayable on demand by the authority in the event of any of the conditions subject to which the advance is made not being complied with, and
(b)may, in any event, be repaid on one of the usual quarter-days by the person for the time being entitled to the equity of redemption after one month’s written notice of intention to repay has been given to the authority.