New Mexico Administrative Code › Title 2 - PUBLIC FINANCE › Chapter 60 - INVESTMENT AND DEPOSIT OF PUBLIC FUNDS › Part 16 - SEVERANCE TAX PERMANENT FUND POLICY GOVERNING PURCHASES OF SMALL BUSINESS ADMINISTRATION OR FARMERS HOME ADMINISTRATION OBLIGAT › Section 2.60.16.8 - INVESTMENT MANAGEMENT POLICY

Current through Register Vol. 35, No. 13, July 16, 2024
A.
				IMPLEMENTATION: Commitments made on behalf of the STPF to purchase the SBA or
				FmHA guaranteed portion of loans before Senate Bill 1018 of the 41st New Mexico
				legislature, 2nd session, was passed and became law shall be honored according
				to the rates, servicing fees and other terms as provided in SIC Rule 89-1,
				dated November 30, 1989 and amended on October 20, 1993, based on New Mexico
				statues existing at the time the commitment was made. However, all commitments
				issued on behalf of the STPF after March 8, 1994 to purchase loans guaranteed
				by the SBA of FmHA shall be issued according to the rates, servicing fees and
				other terms of SIC Rule 94-2 pursuant to Section 7-27-5.4(A), NMSA 1978, as
				amended by Senate Bill 1018 approved by the 41st legislature of the state of
				New Mexico, 2nd session.
B. RATES:
				The effective yield to the STPF on these loans shall be a market rate
				equivalent to the yield on the planned amortized class tranche of
				collateralized mortgage obligation guaranteed by the federal national mortgage
				association or the federal home loan mortgage corporation (FNMA or FHLMC PAC
				CMO's"), rounded up to the nearest 1/8 of 1 percent, with an average life
				comparable to the maturity of the loan. In order to produce an effective yield
				to the STPF equivalent to yields on FNMA or FHLMC PAC CMO's with an average
				life of comparable maturity as required by New Mexico law, a blended rate may
				be used for any SBA/FmHA guaranty purchased by the STPF which includes a
				partial refinancing of a loan previously purchased by the STPF guaranteed by
				the SBA or FmHA. The blended rate shall be calculated by weighting the rate,
				time and amount of the loan to be refinanced together with the portion of the
				new loan used for purposes other than refinancing. Not less than 25 percent of
				the proceeds of the loan refinancing must be used for new purposes other than
				refinancing.
C.
				AMORTIZATION/MATURITY PERIODS: The loan amortization/maturity periods shall be
				limited to 5, 7, 10, 15, 20 and 25 years.
D. COMMITMENT FEES: A one percent commitment
				fee to be paid by the farm credit entities, bank or savings and loan
				association to the STPF shall be charged on all SBA and FmHA loans. The term of
				such commitment shall be set by the SBA and FmHA based on the institution's and
				SBA's or FmHA's best estimate of the time required to close the loan, but in no
				case shall such terms exceed four (4) months, except in the case of
				construction loans where the term may be extended to twelve months.
(1) The commitment fee is refundable to the
				bank or savings and loan only (a) upon delivery of the loan within the
				commitment period or within the extended commitment period of an extension is
				granted by the state investment officer. (b) if the SBA withdraws or cancels
				its guaranty before the loan is sold to the STPF, or (c) if, considering the
				circumstances at the time, the state investment officer determines it is in the
				best interest of the STPF to refund the commitment fee for reasons not
				contained in this policy.
(2) If a
				loan is not funded until after the expiration date, the state may still
				purchase it at its discretion. However, if the state does accept the loan this
				does not imply that the commitment fee will be refunded.