Minnesota Administrative Rules

1650.0561 LOAN DOCUMENTS; CLOSING PROCEDURES.

Subpart 1.

Loan documents.

The executive director shall provide standard forms of all loan documents and closing documents necessary to evidence a bond and related loan transaction to all applicants and prospective lenders. All bond and loan transactions must be done on standard forms, with only insertions and changes necessary to accurately reflect the transaction in question or to assure compliance with section 144 of the code.

Subp. 2.

Lender's responsibility.

The lender must use its own form of additional security documents (mortgage, security agreement, or guarantee) it believes are necessary and appropriate under the particular loan circumstances. These items must be referenced in the bond documents. Any additional requirements not specifically provided for in the bond documents, such as insurance coverage and amounts, must also be added. It is the lender's responsibility to ensure that any security agreements, mortgages, guarantees, or other security documents that the lender requires in a transaction, have been completed and signed, and that any financing statements have been filed, mortgages recorded, or any other necessary steps taken to protect the lender's interests. The authority makes no warranties or representations with respect to the effectiveness, validity, or priority of any liens or security interests, that a lender has, or believes it may have, with respect to a particular loan or bond.

Subp. 3.

Authority's responsibility.

The authority shall by resolution authorize all documents to be executed by it and is responsible for the preparation, execution, and delivery by the borrower and the authority of the authority's loan documents and closing documents; compliance with the procedures in part 1650.0551; the issuance of necessary legal opinions by the authority's bond counsel; the filing with the Internal Revenue Service of all reports and forms required to be filed in connection with the issuance of a bond; and the furnishing of fully executed copies of those items to the borrower and the lender.

Subp. 4.

Origination fee and closing costs.

At the loan closing, the applicant shall deliver to the authority a check payable to the Minnesota Department of Agriculture in an amount sufficient to pay the origination fee as established in Minnesota Statutes, section 41C.12. Under no circumstances shall this fee be less than $200. The authority shall estimate and the borrower shall pay these costs at closing. Loan proceeds may be used to pay closing costs subject to the limitation established by the code, which is described in part 1650.0531, subpart 1, item B, subitem (2).

Statutory Authority:

MS s 41C.13

History:

20 SR 2251(NO. 42)

Published Electronically:

October 26, 2005