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RULE §28.15Application Procedure for Lender

A lender must comply with the following procedures to obtain approval of an application for participation in the program.

  (1) A lender must be an eligible lending institution, as defined by the Act, to participate in the program.

  (2) A lender that is not an approved depository may obtain the appropriate designation by filing a state depository application with the comptroller.

  (3) A lender may obtain the application and information about the program from the Authority.

  (4) A lender shall determine the applicant's creditworthiness according to the lender's underwriting criteria.

  (5) A loan, while under the program, shall be set at a rate of interest established according to the prescribed linked deposit formula under the Act. The linked deposit rate will be recalculated at the end of the fiscal biennium. The eligible borrower's loan rate shall not exceed the linked deposit rate plus 4.0%.

  (6) A lender shall forward the original completed and approved application to the Authority. The application may be sent by facsimile transceiver (FAX) or a scanned document by electronic transmission to the Authority in Austin upon review and approval by the lender with the original remitted by next day United States mail.

  (7) A lender shall estimate the proposed rate of interest to be charged the eligible borrower. The lender must certify via telephone communication with the comptroller at the time the loan is priced the actual rate of interest before issuance of the linked deposit. A copy of the certification of the eligible borrower's loan rate shall be sent to the Authority or the administrator, as part of the compliance report. In no event shall the actual rate of interest exceed the maximum rate of interest allowable under the Act.

  (8) In no instance will the linked deposit be wired to the lender until the loan proceeds have been paid to the eligible borrower. In most cases the entire approved linked deposit amount will be placed as a linked deposit with the applicable lender, except for linked deposits greater than $100,000 which are subject to incremental funding commensurate with principal drawdown.

  (9) A lender shall submit the compliance report to the Authority seven days after the loan is funded.

  (10) A lender shall notify the Authority in writing immediately upon a default and/or in the case of a prepayment or a principal reduction greater than $5,000 in any one calendar quarter of a loan under the program.

  (11) A lender shall comply with all terms and agreements set forth in the state depository handbook, state depository application, the linked deposit application, and any other agreements and representations made to the Authority and the comptroller, and all other terms and conditions of the loan, these rules and the Act.

Source Note: The provisions of this §28.15 adopted to be effective September 1, 2009, 34 TexReg 5902

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