Minnesota Administrative Rules

1580.0800 PRINCIPAL AND INTEREST ASSISTANCE.

Subpart 1.

Availability of assistance.

The board may at any time enter into a written contract with the borrower to pay the lender, an amount not greater than the amount of principal and interest to become due on one or more subsequent dates, without acceleration, if the board determines that:

A.

the borrower is not more than 60 days overdue in payments of principal or interest due;

B.

the borrower is or may become unable to meet in full principal or interest payments, or both, that are due or to become due within a specified period;

C.

it is in the public interest to permit the borrower to continue to pursue the purposes of the project;

D.

the probable net financial loss to the board will be less than that which would result in the event of a default;

E.

the borrower is obligated by the contract to reimburse the state for the principal or interest advanced thereunder, with interest on those amounts, upon terms and conditions satisfactory to the board in light of generally accepted commercial lending practices; and

F.

adequate funds are available to make the principal and interest payments pursuant to Minnesota Statutes, section 41A.03, subdivision 4.

Subp. 2.

Terms of assistance.

All sums advanced for principal and interest assistance and interest on those amounts must be secured by the best available collateral and security interest granted by the loan agreement, but none of the advances made thereafter be repaid to the board until and unless all principal and interest currently due on the loan has been fully paid. In the event of subsequent default by the borrower, acceleration by the lender, and payment by the board of the full amount due under the loan guarantee or bonds, the board is subrogated to the rights of the lender with respect to the principal paid by it under the contract. Upon payment of the loan in full, with accrued interest, the remaining amount of the advances and interest on the advances may be paid to the board.

Statutory Authority:

MS s 41A.04

History:

11 SR 713

Published Electronically:

September 10, 2007