(ii) If the lending institution is an agricultural
credit association in conjunction with the Farm Credit
Bank, the face value of the bonds, notes, debentures or
other obligations or securities outstanding shall, at the
option of the State Treasurer, be periodically reduced by
payment or redemption to match as nearly as possible the
amount of principal outstanding on program loans, and the
interest earned shall be payable to the State Treasurer
as due in accordance with the terms of the bonds, notes,
debentures or other obligations or securities.
(c) Terms of loan for borrowers.--The terms of the loans for
borrowers shall be:
(1) Loans shall not exceed $250,000.
(2) Loans shall be amortized over a term not to exceed
seven 12 years.
(3) The interest rate shall be established at or prior
to the approval of the eligible borrower's loan application.
(4) The interest rate charged by a lending institution
to an eligible borrower shall reflect a percentage rate
reduction below the prevailing market loan interest rate
otherwise applicable to the borrower that is equal to the
percentage rate reduction, if any, below the rate set by the
Board of Finance and Revenue at which the certificates of
deposit associated with the loan are placed or at which the
investment in bonds, notes, debentures or other obligations
or securities of the Farm Credit Bank associated with the
loan are made.
(5) The interest rate charged by a lending institution
to an eligible borrower may be either a fixed rate for the
entire term of the loan or a variable rate which shall be
20190HB1526PN2126 - 8 -
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