(a) A municipality or community development agency is authorized to undertake any activity authorized under Section 105 of Title I of said Housing and Community Development Act of 1974, as from time to time amended, provided such activity (1) will be carried out in accordance with the general statutes and (2) has been approved and adopted in accordance with the provisions of sections 8-169b to 8-169e, inclusive.

(b) Any municipality may apply to the federal government for financial assistance pursuant to Section 107 of the Housing and Community Development Act of 1974, as from time to time amended, in an amount not in excess of one hundred thousand dollars, without complying with the provisions of sections 8-169c and 8-169d, provided the legislative body approves the undertaking of the activities contemplated under said application prior to the execution of a contract for such financial assistance and provided further requirements of § 8-169e are satisfied.

(c) Any municipality or community development agency may apply to the federal government for one or more urban development action grants pursuant to Section 119 of the Housing and Community Development Act of 1977, as from time to time amended, and to undertake any activity authorized by the Secretary of Housing and Urban Development under said section, providing the legislative body approves the undertaking of the activities contemplated under such application or applications prior to execution of a contract or contracts for such financial assistance. Such application or applications may be incorporated as part of the community development plan prepared under sections 8-169c and 8-169d or may be applied for separately if the legislative body finds that the activities proposed to be undertaken are consistent with the municipality’s community development program.

(d) The provisions of sections 8-169c and 8-169d shall not be applicable to any preliminary applications required by the United States Department of Housing and Urban Development by regulation or order promulgated under the provisions of Title I of the Housing and Community Development Act of 1974, as from time to time amended.

(e) Any municipality or community development agency may, upon the adoption and approval of a community development plan by the legislative body of the municipality in accordance with the provisions of sections 8-169b to 8-169e, inclusive, authorizing such action, establish a default reserve fund to guarantee, up to the limit of the assets of said fund, loans to be made by private lenders for the purchase or rehabilitation of any owner-occupied residential real property containing not more than eight dwelling units, nonresidential or mixed-use property exclusive of any property for industrial purposes, located in an urban area as defined in subsection (v) of § 8-243, subject to the requirements in subdivision (1) of subsection (c) of § 8-169d concerning community development plans. Moneys deposited in such default reserve fund may be used to discharge a municipality’s obligations with respect to mortgage obligations guaranteed pursuant to this subsection and to pay costs incidental to such discharge. Amounts received by a municipality in connection with the foreclosure of such mortgages, including insurance proceeds, may be deposited into the municipality’s default reserve fund and used to guarantee additional mortgage loans as authorized by this subsection without need for further action by the legislative body of the municipality. Moneys held in a default reserve fund which are not needed for immediate use or disbursement may be invested in obligations issued or guaranteed by the United States of America or the state and in obligations which are legal investments for savings banks in this state and in time deposits or certificates of deposit or other similar banking arrangements secured in such manner as the municipality determines.

(f) To assist nonentitlement municipalities to obtain guarantees provided for in Section 108 of the Housing and Community Development Act of 1974, as from time to time amended, the state, acting by and through the Governor, whether directly or by delegation to any commissioner, officer or agency of the state, may (1) make the pledge of grants required by said Section 108 and the regulations promulgated thereunder, and (2) take such other actions as are deemed necessary or appropriate to obtain such guarantees.