; or (2) the Secretary determines that the guarantee constitutes an unacceptable risk. (d) Payment of principal, interest, and costs Notwithstanding any other provision of this Act, a participating jurisdiction allocated funds under this Act may use the funds (including program income derived therefrom) for the payment of principal and interest due (including such servicing, underwriting, or other costs as may be specified in regulations of the Secretary), and any associated fee to be paid in accordance with subsection (k), on a note or other obligation guaranteed under this section. (e) Repayment contract; security; pledge by participating jurisdiction To assure the repayment of a note or other obligation guaranteed under this section and related charges incurred under this section, and as a condition of receiving such a guarantee, the Secretary shall require the issuer of the note or other obligation to— (1) enter into a contract, in a form acceptable to the Secretary, for repayment of the note or other obligation; (2) pledge as security the proceeds of any grant for which the issuer may become eligible under this Act; and (3) furnish, at the discretion of the Secretary, such other security as may be determined appropriate by the Secretary in making the guarantee, including increments in local tax receipts generated by the activities assisted under this Act or proceeds from the sale of land or rehabilitated property. (f) Pledged grants for repayments The Secretary may, notwithstanding any other provision of this Act, apply the proceeds of a grant pledged by a participating jurisdiction under subsection (e)(2) to any repayment due the United States as a result of the guarantee under this section of a note or other obligation issued by the participating jurisdiction. (g) Full faith and credit of United States