((a)) ** Limitation on amounts; prerequisites** The Secretary is authorized, notwithstanding any other provision of this chapter, to apply a portion of the grants, not to exceed 20 per centum thereof without the request of the recipient, made or to be made under in any fiscal year pursuant to an allocation under to any unit of general local government toward payment of the principal of, and accrued interest on, any temporary loan made in connection with urban renewal projects under title I of the Housing Act of 1949 [ et seq.] being carried out within the jurisdiction of such unit of general local government if—
((1)) the Secretary determines, after consultation with the local public agency carrying out the project and the chief executive of such unit of general local government, that the project cannot be completed without additional capital grants, or
((2)) the local public agency carrying out the project submits to the Secretary an appropriate request which is concurred in by the governing body of such unit of general local government.
((b)) ** Approval by Secretary of financial settlement of urban renewal project** Upon application by any local public agency carrying out an urban renewal project under title I of the Housing Act of 1949 [ et seq.], which application is approved by the governing body of the unit of general local government in which the project is located, the Secretary may approve a financial settlement of such project if he finds that a surplus of capital grant funds after full repayment of temporary loan indebtedness will result and may authorize the unit of general local government to use such surplus funds, without deduction or offset, in accordance with the provisions of this chapter.42 U.S.C. 1450