Current through Register Vol. 48, No. 12, March 22, 2024
a) General
Description of Program
1) The Interest Buy
Down Program (IBD), which is used in conjunction with the State Guarantee
Program for Restructuring Agricultural Debt (SGP), is designed to subsidize the
interest cost on loans made to pork producers.
2) The State shall pay a portion of the
interest on qualifying loans under the SGP:
A) The maximum principal amount on which the
State will pay interest is $100,000.
B) The State will pay the interest calculated
at a rate of 2.0 % up to the maximum principal amount.
C) Payments will be made to the Lender
annually.
b)
Definitions
Words defined in the Illinois Finance Authority Act and in
Section
1100.50 have the same
meaning when used in this Subpart unless a more specific definition is
prescribed in this Section. This Section establishes additional definitions for
use in this Subpart only.
"Applicant" means a hog farmer whose application for an
Interest Buy Down in conjunction with a State Guarantee for Restructuring
Agricultural Debt has been submitted to the Authority by a lender.
"Fund" means the General Revenue Fund, which will be used for
Interest Buy Down payments.
"IBD" is a payment from the State of Illinois to the lender
of a portion of the borrower's interest on a loan.
"Loan" is a loan made under the State Guarantee Program for
Restructuring Agricultural Debt for which the State of Illinois is providing an
Interest Buy Down.
c)
Eligible Farmers. To qualify for participation in the IBD, the applicant must:
1) be a resident of Illinois;
2) be a principal operator of a farm that
produces hogs;
3) derive at least
50% of annual gross income from farming;
4) have a net worth of at least
$10,000;
5) meet all other
requirements of the State Guarantee Program for Restructuring Agricultural Debt
as defined in Section
1100.725
of this Part.
d)
Eligible Lenders. To qualify for participation in the IBD, the Lender must:
1) agree to fix the interest rate on the loan
for at least five years;
2) agree
not to penalize Borrower on account of receipt of an IBD from the State after
the applicable anniversary date of the loan.
e) Limitations
1) The IBD shall last for five years.
However, depending on the collateral, the loan may have a maturity of more than
five years.
2) The IBD shall be
allowed on a maximum of $100,000 of the loan balance.
3) The IBD shall be available until the
earlier of June 30, 1999 or when $50 million of loans have been
approved.
f) Application
Procedures and Review
1) Lenders shall apply
for the Interest Buy Down in conjunction with an application for the State
Guarantee for Restructuring Agricultural Debt on forms provided by the
Authority and shall certify that the application and any other documents
submitted are true and correct. Applications shall be processed by the
Authority on a first-come, first-served basis, based upon the receipt of all
completed application documents by the Authority.
2) Review of applications and the approval
process shall be in accordance with Section
1100.725
of this Part.
3) Upon approval of
an application and receipt of the documentation necessary to prepare closing
documents for the loan, a closing documents package, which includes the
document to execute for the IBD, shall be prepared by the Authority and sent to
the lender. Upon completion of all such forms and documents by the applicant,
lender and Authority and after satisfaction of all closing requirements for the
loan, the Interest Buy Down will be in effect.
g) Payment of Interest Buy Down to Lender.
After the Borrower makes his anniversary payment, the Lender shall notify the
Authority of the amount due on the IBD. The Authority shall direct payment to
the Lender from the Fund.