Code of Maine Rules › 94 - INDEPENDENT AGENCIES › 178 - ADAPTIVE EQUIPMENT LOAN PROGRAM FUND BOARD › Chapter 501 - KIM WALLACE ADAPTIVE EQUIPMENT LOAN PROGRAM RULE › Section 178-501-6 - Loan Terms, Conditions and Administration

Current through 2024-29, July 17, 2024
A. Loans
				shall be in an amount which is reasonable to acquire the adaptive equipment as
				shown by materials submitted with the application. In no event shall any single
				or cumulative loan(s) for the same project exceed $100,000, nor shall any
				single or cumulative loan(s) to or for the benefit of the same borrower exceed
				$100,000. For the purposes of this subsection (A), the term "borrower" shall
				include an applicant.
B. Loans
				shall bear an annual interest rate approved and reviewed by the board. The
				interest rate shall not exceed the maximum rate as allowed by State of Maine
				Law. Interest shall be fixed as of the date of issuance of the loan commitment.
				The board shall approve interest rates to be applied by the financial services
				provider within the parameters established in this subsection (B) and
				corresponding underwriting guidelines, at least annually.
C. The term of each loan shall be based on
				the applicant's circumstances and the useful life of the collateral. The term
				of a construction or new construction loan shall not exceed 30 years from the
				date of the first disbursement. The term of any other type of loan shall not
				exceed 20 years.
D. The board or
				its financial services provider may require collateral. Guarantees will
				generally be required of any individual or entity that holds (i) 20% or more of
				the ownership interests in any non-individual entity that is an applicant or
				borrower or (ii) 5% or more of the ownership interests in any non-individual
				entity which is an applicant or borrower and receives substantial income from
				the entity. Guarantees may also be required of other individuals or entities,
				including, without limitation, owners of more than 20% of the ownership
				interests in any entity which in turn owns 20% or more of any applicant or
				borrower. In no event however, shall any one individual or entity, as borrower
				or as guarantor or as any combination thereof, become liable to the board for
				an amount in excess of $250,000 in the aggregate. Except as specifically
				approved by the financial services provider, collateral shall be located within
				the State, or, if mobile, shall be registered within the State if the State
				registers such mobile collateral.
E. The financial services provider will
				prepare the loan documentation. Execution of all loan documentation in form and
				content satisfactory to the board shall be a condition precedent to the payment
				of loan proceeds to the applicant. The borrower shall agree to terms and
				conditions in the loan documentation substantially standard to the industry or
				as may be reasonably required by the financial services provider and authorized
				by the board.
F. The following
				terms and conditions shall apply to construction and new construction loans, in
				addition to terms and conditions typical of such loans:
1) The board or its designee has the right to
				inspect all construction during reasonable hours.
2) Disbursements may be made in multiple
				installments, which may consist of one or more two-party checks.
3) After the first disbursement, the borrower
				shall be required to provide lien waivers from appropriate contractors
				evidencing receipt of payments for work performed prior to any further
				disbursement.
4) Interest only
				shall be due on the loan proceeds disbursed until such time as the loan is
				fully disbursed. The financial services provider may set a time after which it
				may require commencement of payment of principal and interest on the loan
				proceeds disbursed, if the construction is not completed within a reasonable
				time.