New Mexico Administrative Code › Title 4 - CULTURAL RESOURCES › Chapter 10 - CULTURAL PROPERTIES AND HISTORIC PRESERVATION › Part 2 - HISTORIC PRESERVATION LOAN FUND › Section 4.10.2.13 - DIVISION PROCEDURES

Current through Register Vol. 35, No. 13, July 16, 2024
A. Loan
				participation agreement: The division shall enter into a loan participation
				agreement (see attachment "A" attached hereto) 4.10.2.22 NMAC with one or more
				lending institutions, a federal entity, or other funding entity, to make HPL
				funds available for deposit into the loan pool for purposes of the Historic
				Preservation Loan Act.
B. The loan
				or loan subsidy from the HPL contributions to the loan pool for a repair,
				restoration or rehabilitation project, shall be governed by the terms of the
				loan participation agreement.
C.
				The loan participation agreement shall contain the following:
(1) the names and addresses of all parties
				participating in the project by making a contribution of funds to the loan
				pool; and
(2) recitals of the
				project, definitions, and
(3) a
				statement specifying the parties' respective percentages of financial
				participation or "share" in the loan pool, such participation shall be
				described as a "sale of participation" in the loan or loan subsidy by each
				party; and
(4) a statement
				describing the manner in which HPL funds will be contributed to the loan pool;
				the lending institution shall notify the division that according to the
				schedule for disbursements of loan funds to the borrower, a contribution of HPL
				funds into the loan pool is necessary; the division shall make an appropriate
				request to the department of finance and administration and the state
				treasurer's office to effect a contribution of HPL funds into the loan pool;
				and
(5) a statement that upon
				deposit of the HPL contribution to the loan pool, the HPL contribution shall
				accrue interest at the rate of three percent per annum; and
(6) a statement that the lending institution
				shall disburse loan funds to the borrower in at least five separate
				installments and as provided in Subsection B of 4.10.2.8 NMAC herein;
				and
(7) a statement that the
				division shall establish an inspection schedule relating to the purposes and
				goals of the Historic Preservation Act, authorized uses of the HPL
				contributions, and compliance with the development agreement and preservation
				covenants and deed restrictions and the secretary's standards; and
(8) a statement that provides that the
				lending institution shall establish an inspection schedule relating to
				construction progress; and
(9) a
				statement that provides that HPL contributions that are not disbursed to the
				borrower, as provided in Subsection B of 4.10.2.8 NMAC herein, shall be
				returned by the lending institution to the division; and
(10) a statement describing the rates of
				interest charged to the borrower for the loan or loan subsidy attributable to
				each party who contributed to the loan pool, including the rate charged on the
				HPL contribution as stated in Section
				18-6-23 NMSA
				1978, and other rates charged on funds contributed by the lending institution;
				and
(11) a statement indicating the
				combined interest rate of the loan or loan subsidy; and
(12) a statement describing the
				administration of the loan pool by the lending institution, including that the
				lending institution shall:
(a) receive and
				deposit the HPD contributions into the loan pool and, within five working days
				after receipt of a payment from the borrower, transfer to the division its
				share of any collections, including interest due to the division; and
(b) service and manage the loan or loan
				subsidy and collateral according to customary and prudent lending
				practices;
(c) be responsible for
				all aspects of loan origination, servicing, collections, and security;
				and
(d) document the loan or loan
				subsidy in the form a promissory note, loan agreement, mortgage and other
				security agreements(s) that may be required by the lending institution;
				and
(e) require that the promissory
				note, mortgage and other loan documents provide that events of default include
				the borrower's failure to make timely payments of amounts due under the loan or
				loan subsidy, comply with the secretary's standards, or comply with the
				development agreement and preservation covenants and deed restrictions;
				and
(f) ensure that the original
				priority of the mortgage extends to each subsequent disbursement of loan
				proceeds to the borrower; and
(g)
				provide the division with copies of all documents pertaining to the loan or
				loan subsidy; and
(h) monitor the
				borrower's maintenance of any insurance required on the collateral, payment of
				all taxes, fees and other charges assessed or otherwise imposed upon the
				collateral; and
(i) promptly notify
				the division of any event of default existing for more than thirty days, and of
				other significant information relating to the loan; and
(j) upon notification of a default, consult
				with the division as to the appropriate course of action and take such agreed
				upon action with the prior written approval of the division; and
(13) a statement that the lending
				institution shall execute and deliver satisfactions, endorsements, receipts,
				discharges or releases as may be necessary in the proper serving and collection
				of the loan or loan subsidy; the lending institution shall not modify or
				supplement any documents associated with the loan or loan subsidy, agree to any
				extension of time or waiver or forgiveness of debt, take or permit any action
				that will release the borrower or any guarantor from any obligation or
				liability with regard to the loan, or impair the validity or priority of the
				lending institution's or division's interest in the collateral unless the
				lending institution obtains the division's prior written consent; and
(14) a statement permitting payment of
				charges related to loan origination, closing, and other service charges
				incurred by the lending institution in its administration of the loan pool, to
				be paid from loan funds contributed by the lending institution; and
(15) a statement describing the division's
				right to have access to loan or loan subsidy records in the possession of the
				lending institution; and
(16) a
				statement describing all terms of the loan or loan subsidy issued from the loan
				pool, including:
(a) a detailed description of
				all repair, restoration or rehabilitation for the project as approved by the
				division and any modifications, exhibits or additional documents as approved by
				the division and the lending institution; and
(b) a statement that the restoration,
				rehabilitation, or repair must be completed within two years from the date the
				loan is approved by the division and closed by the lending institution;
				and
(c) a statement that the term
				of the loan or loan subsidy shall be five years and interest and principal
				shall be paid in equal installments no less than annually with the first
				installment due within one year of the date the loan is closed by the lending
				institution; this statement shall also provide that the loan shall be amortized
				over a period not to exceed twenty years, with a balloon payment due at the end
				of the five year term; in lieu of a balloon payment, the lending institution
				may purchase the remaining loan amount due to the division; and
(d) a statement that the loan or loan subsidy
				shall be secured by the collateral; and
(e) a statement that all restoration,
				rehabilitation, or repair shall be completed in conformity with the secretary's
				standards as determined by the division; and
(f) a statement that failure by the borrower
				to comply with the secretary's standards shall be an event of default under the
				promissory note and the mortgage; and
(g) a statement that the division shall
				notify the borrower of any noncompliance with the secretary's standards, that
				the borrower has a specific period of time to cure the noncompliance, and if
				the default is not cured the division shall notify the lending institution of
				the default and the lending institution shall pursue appropriate remedies as
				stated in the loan participation agreement, promissory note or mortgage;
				and
(h) a statement that the
				lending institution shall condition the closing of the loan or loan subsidy
				upon the borrower's execution of a development agreement and preservation
				covenants and deed restrictions, as described in Subsection D of 4.10.2.13 NMAC
				of these regulations, with the historic preservation division; and that if the
				loan is repaid prior to the expiration of seven years from the date the loan or
				loan subsidy is closed by the lending institution, the covenants and deed
				restrictions shall not be extinguished and shall remain in effect until the
				termination date of the development agreement and preservation covenant and
				deed restriction; and a requirement that this provision be contained in the
				mortgage and all other documents evidencing security for the loan or loan
				subsidy; and
(i) a statement that
				the promissory note, mortgage, and any other documents pertaining to security
				for the loan or loan subsidy shall include provisions stating that the
				borrower's default in connection with any loan, loan subsidy or other
				obligation secured by a lien superior to the mortgage or development agreement
				and covenants and deed restrictions shall constitute an event of default of the
				mortgage and loan agreement; the division and the lending institution shall
				have the right (but not the obligation) to cure any default in connection with
				superior liens and charge the costs of curing to the borrower; and
(j) a statement requiring that a construction
				sign acknowledging the assistance of the division and the lending institution,
				or other participating party, shall be displayed prominently at the project
				being restored, rehabilitated or repaired; and
(k) a statement requiring the lending
				institution to require the borrower to maintain financial records regarding the
				project throughout the term of the loan or loan subsidy and shall make such
				records available to the lending institution and the division upon request;
				and
(17) a statement
				regarding the lending institution's transfer of payments to the division,
				including any interest, in conformity with the division's share of
				participation in the loan pool; and
(18) a statement regarding quarterly reports
				to the participating parties from the lending institution concerning the
				project's financial and restoration, rehabilitation or repair status;
				and
(19) a statement identifying
				the name and address of individuals to whom written notice of matters
				concerning the project shall be addressed and directed; and
(20) a statement describing the applicable
				law that governs the loan participation agreement; and
(21) a statement providing for severability,
				non-assignability, amendment of the loan participation agreement, and
(22) a statement regarding execution of the
				loan participation agreement in counterparts; and duly witnessed signatory
				lines of the parties.