Iowa Admin. Code r. 781-4.5 - Qualifications on the loan
(1) The interest
rate on the loan shall not exceed the rate of interest on the certificate of
deposit by more than 4 percent. Points shall not supplement the loan rate, and
a compensating balance shall not be required.
(2) All other terms and conditions on the
loan must be negotiated by the lender and the borrower. The lender is required
by law to use usual and customary lending standards to determine the
creditworthiness of the loan.
(3)
Neither the treasurer nor the state is liable for any payment of principal or
interest on the loan or any late payments. The certificate of deposit is not
collateral and shall not constitute security in any manner for the repayment of
principal or any interest or charges thereon.
(4) The amount and term of the loan may
exceed the amount and term of the certificate of deposit. It is permitted for
the interest rate on the loan to be variable based on adjustments in the rate
of the certificate of deposit.
(5)
Loans are subject to the restrictions set forth in rule
781-4.6
(12).
(6) Loan proceeds shall not
be used to refinance existing debt, including credit card debt. However,
proceeds may be used to refinance a short-term bridge loan made in anticipation
of the treasurer's approval of an eligible LIFT participant.
(7) The lender shall acquire sufficient
information to verify that the applicant meets the requirements before the
borrower or business may become eligible to participate in a LIFT program. The
lender and borrower applying for a loan under this program shall verify on the
LIFT Lender/Borrower Application (Form 655-0142) that the borrower, owner, and
business qualify.
(8) The lender
must complete the LIFT Renewal Application (Form 655-0143) at the time of
renewal and submit it to the treasurer to ensure that the borrower and business
continue to be eligible to participate in the LIFT program.
Notes
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