Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 13 - Alaska Industrial Development and Export Authority › Chapter 99 - Commercial and Industrial Financing › Article 2 - Tax-Exempt Loan Participation Program › 3 AAC 99.230 - Terms of real property loans

Current through May 31, 2024
(a) The authority
				  may participate in a loan made by an originator to acquire land, or to acquire
				  or construct buildings, improvements, and structures on land, or to make
				  improvements in the energy efficiency of buildings, improvements, and
				  structures on land, if the loan satisfies the conditions prescribed in this
				  section.
(b) The authority may
				  participate in a loan made by an originator to refinance an outstanding loan
				  described in (a) of this section if, in addition to other requirements of this
				  section, the authority is satisfied that (1) the loan to be refinanced was not
				  made with proceeds of outstanding general obligation indebtedness of the
				  authority nor relates to a project that was originally financed with
				  outstanding general obligation indebtedness of the authority, (2) the borrower
				  will receive economic benefit from the refinancing, and (3) the loan is
				  permitted under the code. The authority may participate in a loan for
				  improvements in energy efficiency that will be secured by a lien on real
				  property subordinate to a lien securing an existing loan of the authority or
				  another lender if the requirements of (j) of this section are satisfied, if the
				  borrower will receive economic benefit from the subordinate loan, and if the
				  subordinate loan is permitted under the code. The economic benefit to the
				  borrower may be in the form of an interest rate reduction, a reduction of debt
				  service payments, an extension of the maturity of the loan, the elimination of
				  call or balloon payment provisions, or other economic benefits, including
				  improvements in the energy efficiency of an existing building and improvements
				  and structures on existing real estate.
(c) The amount of the authority's
				  participation in a real property loan will not exceed $25,000,000, except that
				  the authority may participate in a real property loan in an amount greater than
				  $25,000,000 if the loan is for the financing of a qualified energy development
				  and if the legislature has approved the authority's participation. The
				  principal amount of a real property loan may not exceed 75 percent of the
				  appraised value of the collateral offered as security for the loan unless the
				  amount of the real property loan in excess of this limit is federally insured
				  or guaranteed or is insured by a qualified mortgage insurance company, except
				  that in no event may the real property loan to be purchased under this section
				  exceed the total of loan proceeds used to refinance an existing debt plus the
				  cost of new construction, expansion, or acquisition, unless the additional
				  amounts of the loan to be purchased are restricted to uses approved by the
				  authority to finance commercial activity in the state by a business
				  enterprise.
(d) A real property
				  loan must be secured by a mortgage which is a first lien on real property in
				  fee simple or on a leasehold estate or, in the case of a qualified energy
				  development, on an easement, except as provided in (j) of this section. The
				  authority may review and approve other encumbrances against the real property
				  that do not affect the authority's security for the loan.
(e) The loan terms for any real property loan
				  must require complete amortization provisions and require periodic payments by
				  the borrower. The term for a real property loan shall not exceed the following
				  calculated from the date the loan is made:
(1) a loan to finance a qualified energy
				  development may not exceed 50 years or 75 percent of the estimated economic
				  life of the collateral offered as security for the loan, whichever is less, as
				  determined by the authority;
(2) a
				  loan to finance a tourism destination facility may not exceed 40 years or 75
				  percent of the estimated economic life of the collateral offered as security
				  for the loan, whichever is less, as determined by the authority; and
(3) a loan to finance real property, other
				  than described in (1) and (2) of this subsection, may not exceed 25 years or 75
				  percent of the estimated economic life of the collateral offered as security
				  for the loan, whichever is less, as determined by the authority.