Oregon Administrative Rules › Chapter 690 - WATER RESOURCES DEPARTMENT › Division 90 - WATER DEVELOPMENT LOAN FUND › Section 690-090-0030 - Loan Security

Current through Register Vol. 63, No. 7, July 1, 2024
(1) For
			 individual residents, profit-making partnerships or corporations and non-profit
			 corporations subject to ORS Chapter 65, whose principal income is from farming
			 in Oregon, the security for the loans shall be a mortgage or security agreement
			 upon real property of the water developer. Any personal property acquired with
			 loan funds will also be held as security for the loan with the filing of the
			 appropriate documents and security agreements. This property need not be
			 directly benefited by the project. Existing liens shall be released or
			 subordinated of record before any Water Development Fund loan proceeds will be
			 advanced. The amount of security shall be sufficient to recover the amount of
			 the loan. Unless the director finds financial factors warrant otherwise, the
			 maximum amount of loan, including amounts loaned for reserves and loan fees,
			 shall not exceed 60 percent of the current appraised value of the security for
			 the loan. In no event shall the amount of loan exceed 70 percent of the
			 appraised value of the security for the loan.
(2) For water developers not covered by OAR
			 690-090-0030(1), security for the loan includes but is not limited to a first
			 lien to the state of Oregon attached to the real property of the water
			 developer, and the user charges owed to or received by the water developer. At
			 the discretion of the director, the lien may attach to all real property,
			 whether owned by the water developer or other persons, which is served by the
			 water development project or which is served by a water source enhanced or
			 restored by the water development project. Except as otherwise provided in
			 690-090-0025(7)(c) and (9)(a), the water developer shall enter into a written
			 agreement with the director that assessments, user charges or other revenue
			 pledged for repayment used for security shall be maintained at no less than 125
			 percent of the debt service on the loan.
(3) Real property used for securing the loan
			 shall have been appraised by a licensed appraiser, county assessor, or
			 department appraiser, at the discretion of the director, within six months
			 prior to the date of the loan commitment.
(4) There will be no advance first lien
			 documents required at the time of application. Applicants should consult anyone
			 who holds an existing lien against property to be used as security for the loan
			 to be sure that applicant can meet the first lien requirement.
(5) Where the applicant is a water developer
			 described in ORS 541.700(7)(e) through
			 (o), the water developer shall represent and
			 warrant in the loan agreement that it is fully authorized to, and does, grant
			 the State of Oregon, the liens required under ORS
			 541.740(1) and
			 that the granting of a lien of the type required under ORS
			 541.740 will not violate or
			 conflict with any other agreement, pledge or contract to which the water
			 developer is a party, or with any decree, order or judgment of any competent
			 tribunal to which the water developer is subject.
(6) A partial release of lien may be granted
			 by the director upon written request of an individual, partnership, or
			 corporation borrower if the remaining property provides adequate security as
			 required by law and these Administrative Rules.
Stat. Auth.: ORS 183 & ORS 541
Stats. Implemented: ORS
				  541.740 & ORS
				  541.770