(26) To make advances to nonprofit corporations, including community housing development corporations meeting the requirements of section 8-217, and to municipal developers for the expenses of planning and developing housing for which such nonprofit corporation or municipal developer has applied for a mortgage loan or mortgage insurance from the authority under the provisions of this chapter. The authority may make such advances after it has determined that the proposed housing complies with the standards established by the authority under this chapter, in an amount not to exceed ninety-five per cent of the reasonable development costs expected to be incurred by the applicant in connection with the planning and developing of such housing prior to the availability of financing for the construction, rehabilitation or acquisition thereof. The proceeds of the advance may be used only to defray the development costs of such housing. Each advance shall be repaid in full by the recipient thereof upon initial disbursement of the construction loan financing such housing, unless the authority extends the period for repayment of the advances. In no event shall the time for repayment be extended beyond the date of receipt of final disbursement of construction loan proceeds. If the authority determines, after making an advance hereunder, that it will not make a mortgage loan or insure a mortgage for the proposed housing under the provisions of this chapter, the advance may, at the discretion of the authority, be treated as a grant to the extent that the advance cannot be repaid from the assets of the recipient corporation or municipal developer, including the project;