690-090-0030 Loan Security (1) For individual residents, profit-making partnerships or corporations and non-profit corporations subject to ORS Chapter 65, whose principal income is from farming in Oregon, the security for the loans shall be a mortgage or security agreement upon real property of the water developer. Any personal property acquired with loan funds will also be held as security for the loan with the filing of the appropriate documents and security agreements. This property need not be directly benefited by the project. Existing liens shall be released or subordinated of record before any Water Development Fund loan proceeds will be advanced. The amount of security shall be sufficient to recover the amount of the loan. Unless the director finds financial factors warrant otherwise, the maximum amount of loan, including amounts loaned for reserves and loan fees, shall not exceed 60 percent of the current appraised value of the security for the loan. In no event shall the amount of loan exceed 70 percent of the appraised value of the security for the loan. (2) For water developers not covered by OAR 690-090-0030(1), security for the loan includes but is not limited to a first lien to the state of Oregon attached to the real property of the water developer, and the user charges owed to or received by the water developer. At the discretion of the director, the lien may attach to all real property, whether owned by the water developer or other persons, which is served by the water development project or which is served by a water source enhanced or restored by the water development project. Except as otherwise provided in 690-090-0025(c) and (9)(a), the water developer shall enter into a written agreement with the director that assessments, user charges or other revenue pledged for repayment used for security shall be maintained at no less than 125 percent of the debt service on the loan. (3) Real property used for securing the loan shall have been appraised by a licensed appraiser, county assessor, or department appraiser, at the discretion of the director, within six months prior to the date of the loan commitment. (4) There will be no advance first lien documents required at the time of application. Applicants should consult anyone who holds an existing lien against property to be used as security for the loan to be sure that applicant can meet the first lien requirement. (5) Where the applicant is a water developer described in ORS 541.700(7)(e) through (o), the water developer shall represent and warrant in the loan agreement that it is fully authorized to, and does, grant the State of Oregon, the liens required under 541.740(1) and that the granting of a lien of the type required under 541.740 will not violate or conflict with any other agreement, pledge or contract to which the water developer is a party, or with any decree, order or judgment of any competent tribunal to which the water developer is subject. (6) A partial release of lien may be granted by the director upon written request of an individual, partnership, or corporation borrower if the remaining property provides adequate security as required by law and these Administrative Rules. Statutory/Other Authority: ORS 183 & 541 Statutes/Other Implemented: ORS 541.740 & 541.770 History: WRD 3-1997, f. & cert. ef. 4-15-97 WRD 15-1988, f. & cert. ef. 9-20-89 WRD 8-1986, f. & ef. 6-18-86 WRD 9-1982, f. & ef. 8-9-82 WRD 1-1982, f. & ef. 1-11-82 WRD 1-1978, f. & ef. 2-13-78