A local government is eligible to participate in the program provided it: Possesses the legal capacity and all necessary legal authority to incur the obligations of the loan; Submits an application to the Department which identifies how the local government will construct, operate, and maintain the project; Is eligible to receive State payments in amounts satisfactory to the Administration, taking into consideration the amount of the loan; Needs to finance or refinance the acquisition, construction, or rehabilitation of a project; and Is acceptable to any entity which may be engaged to enhance the credit for a bond financing.