(a) The State Bond Commission may authorize the issuance of bonds of the state in one or more series in accordance with § 3-20 and in principal amounts necessary to carry out the purposes of § 32-16 but not in excess of the aggregate amount of twenty-six million dollars. All of said bonds shall be payable at such place or places as may be determined by the Treasurer pursuant to § 3-19 and shall bear such date or dates, mature at such time or times, not exceeding twenty years from their respective dates, bear interest at such rate or different or varying rates and payable at such time or times, be in such denominations, be in such form with or without interest coupons attached, carry such registration and transfer privileges, be payable in such medium of payment and be subject to such terms of redemption with or without premium as, irrespective of the provisions of said § 3-20, may be provided by the authorization of the State Bond Commission or fixed in accordance therewith.

(b) The proceeds of the sale of such bonds shall be used by the Department of Economic and Community Development to make grants to the corporation for deposit in the Mortgage and Loan Insurance Fund created by § 32-14. The terms and conditions of said grants shall be governed in accordance with a grant contract between the department and the corporation. Payments of principal on such bonds as they mature and interest thereon shall be payable first from the Mortgage and Loan Insurance Fund and secondly from the state General Fund.