Waltham city councilors gave the green light to Mayor Jeannette McCarthy this month to use $3.5 million in municipal bonds to transform the rest of the former Banks School on South Street into a 24-unit condominium building for the elderly. Since 2007, city officials have discussed what to do with the former school at the intersection of South and Main streets, which was declared surplus property in 2005. McCarthy said the city previously used about $1 million to turn the top floor of the three-story building into seven condominium units, but had to halt the entire renovation project because the city ran out of money. The city plans to finish renovating the other two floors within a year, and will then sell the units at market-rate prices to citizens age 62 or older, hopefully breaking even or profiting on the investment, officials said. City officials hope to give current Waltham residents as much preference as the law allows for purchasing the units.