(a) Prior to an exercise of powers conferred by § 4-31-203(b), the authority shall:

(1) Require the lender to certify that the loan at the time of making was, is or will be in all respects a prudent investment;

(2) Require the lender to certify that it would not have made the loan if the authority had not agreed to purchase the loan pursuant to § 4-31-203(b);

(3) Require the lender to certify, if the principal amount of the loan is two hundred thousand dollars ($200,000) or more, that the borrower has obtained at least one (1) written declination of credit from a lender in or near the borrower's local community; and

(4) Require that the loan involved be insured by a loan insurer or be guaranteed by a loan guarantor or that the payment of principal and interest on the notes or bonds be insured or guaranteed.

(b) Prior to the exercise of powers conferred by § 4-31-203, the authority shall for all loans to be made pursuant to the agricultural loan development program for agricultural enterprises:

(1) Require any type of security that it deems reasonable and necessary;

(2) Authorize the reservation of funds by lenders in such amounts and subject to such conditions as the authority considers reasonable and necessary; and

(3) Require that all agriculture enterprises for which funds are advanced, loaned or otherwise provided by the authority under this chapter be in compliance with any state or local land use, zoning, subdivision and other laws applicable to the land upon which such enterprise is located or is to be constructed.