Code of Maine Rules › 94 - INDEPENDENT AGENCIES › 457 - FINANCE AUTHORITY OF MAINE (FAME) › Chapter 303 - NATURAL DISASTER BUSINESS ASSISTANCE PROGRAM › Section 457-303-10 - LOAN TERMS AND CONDITIONS

Current through 2024-29, July 17, 2024
A. All loans under
				the program, including loans made by lenders with deposits from the Authority,
				shall be for initial terms of six months at an interest rate of the lesser of
				8% or the Prime Rate listed under "Money Rates" in the Wall Street Journal on
				the date the Authority issues its loan commitment. Monthly payments shall be
				established in accordance with the borrower's individual needs. Loans to any
				borrower may not exceed $50,000 in the aggregate.
B. Loans or portion of loans intended to
				provide short term financing pending receipt of funds from other sources must
				be paid out when such other funds are received to the extent of such proceeds,
				unless otherwise approved by the chief executive officer.
C. Loans which are not paid out within six
				months may be termed out for term of up to twenty (20) years on terms and
				conditions established by the chief executive officer based on the repayment
				ability of each borrower. In the case of loans made through lenders, the
				Authority may allow the lender to continue to maintain and service the loan if
				the lender is willing to do so, or the Authority may request an assignment of
				the loan and the collateral. If the lender retains the loan, the lender shall
				pay to the Authority an amount equal to two percent per year of the outstanding
				principal balance of the loan. Upon the occurrence of any default, the lender
				may assign the loan and collateral to the Authority and retain the amount
				deposited by the Authority with the lender up to the amount outstanding on the
				loan.
D. Additional requirements
				and covenants of each loan may be established for each loan, provided that each
				borrower shall at minimum be required to maintain and repair collateral,
				maintain adequate insurance covering public liability and hazards, including
				flood insurance for borrowers located in flood plains, and comply with all
				applicable federal, State and local laws, regulations, ordinances and
				orders.
E. Borrowers which
				willfully fail to apply loan proceeds to the purposes for which the loan was
				approved or which willfully fail to apply funds from other sources to reduce
				the financial assistance provided under this program where the financial
				assistance is contingent on such funds being used to reduce program loans,
				shall be subject to acceleration of the loan and to an additional penalty of
				fifty percent (50%) of the outstanding balance of the loan. After any default,
				the Authority may provide that the interest rate on the loan is increased to a
				rate not to exceed five percent (5%) over the Prime Rate listed under "Money
				Rates" in the Wall Street Journal on the date of the default.
F. The borrower shall be responsible for the
				Authority's out-of-pocket costs and expenses of closing, administering and
				collecting loans held by the Authority.
G. In the case of financial assistance
				provided through lenders, the lender may charge its reasonable and customary
				closing costs and expenses but may not charge any points or other fees without
				express approval of the chief executive officer. The amount of the Authority
				deposit shall initially equal the amount of the loan and shall be repaid to the
				Authority as the principal balance of the loan is reduced.