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An advance shall not be made for the purpose specified in the closing words of subsection (1) of section 435 (repayment of previous loan) or in subsection (1A)(b) of that section (repayment of previous loan for improvements etc), unless the authority satisfy themselves that the primary effect of the advance will be to meet the housing needs of the applicant by enabling him either—
to retain an interest in the house concerned, or
to carry out such works in relation to the building or house concerned as would be eligible for an advance under
subsection (1)(c) of that section (conversion), or
subsection (1A)(a) of that section (improvements, etc),
as the case may be.