830 R.I. Code R. 830-RICR-10-20-1.6

Current through November 21, 2024

Section 830-RICR-10-20-1.6 - Terms and Conditions

A. Borrowing Rate - Pursuant to R.I. Gen. Laws Chapter 24-18, the Bank will make loans for approved, eligible projects at a rate of interest that is reduced from the Borrower's market rate. The amount of subsidy assistance (the "Subsidized Interest Rate") shall be in an amount equivalent to one third (1/3) of the Borrower's market rate or such other subsidy assistance as determined by the Bank. Interest is to be calculated on the basis of a three hundred sixty (360) day year and twelve (12) thirty (30) day months on the outstanding loan balance, paid semi-annually on March 1st and September 1st, and may be capitalized during construction. Borrowers will be contractually liable for the Market Rate on the Loan but will be billed only for the Subsidized Interest Rate. In the event of a default by the Borrower or other Borrowers in the MRBRF program, the Bank may bill the Borrower for the Market Rate.

B. Loan Fees - The Bank will charge an Origination Fee of one percent (1.0%) of the principal amount of the loan at closing with a minimum of one thousand dollars ($1,000). All out of pocket closing costs, i.e. Borrowers cost of issuance, Bank cost of issuance, Bank underwriting cost, and other closing costs, will be paid by the Borrower. The Bank will also charge an annual Service Fee of one half of one percent (0.50%) of the outstanding principal payable semi-annually at each interest payment date. A late payment fee will be charged for every fifteen (15) days that a payment is late of five percent (5.0%) of the amount of the payment.

C. Amortization - Amortization will begin within one year after completion of construction and one year after closing for a refinancing. Principal payments will be made annually on September 1st and the schedule of payments will be structured to meet the debt service and financial assistance needs of the Borrower.

D. Final Maturity - Loans funded from the Municipal Road and Bridge Fund may mature up to the duration of the useful life determination of the project by RIDOT. The final maturity of a loan will be a factor in determining the level of financial assistance to a Borrower.

E. Prepayments - A loan may be prepaid by the Borrower at any time but may be subject to a prepayment penalty based on the cost of reinvesting the prepayment, the cost of prepaying outstanding bonds of the Bank or any other negative financial impact to the Bank.

F. Security - Loans will have a pledge of:

1. General revenues and/or other dedicated revenues of the Borrower; and

2. May be secured by any other assets and upon such other terms and conditions as the Bank deems appropriate to protect the interests of the other participants in the loan programs of the Bank; bondholders; other creditors of the Bank; or the finances of the Bank.

G. Construction Progress Payments - Progress payments for each construction project will be made through the MRBRF. Loan proceeds will be transferred monthly from the MRBRF for each Borrower based upon approved Requisition Forms submitted to the Bank. Upon receipt of the Requisition Form, the Bank will verify:

1. that the Project appears on the RIDOT Project Priority List;

2. the vendor is identified in the contract; and

3. there is sufficient availability in the MRBRF to make the payment. Upon approval by the Bank and RIDOT, payments will be made directly to the vendor and/or the Borrower for reimbursements by the Bank, and a "paid" stamped copy of the Requisition Form will be sent to the Borrower and RIDOT. At its discretion, RIDOT will perform periodic project inspections to:

a. monitor construction progress;

b. verify eligibility of construction cost under the program; and

c. insure construction is in conformity with Plans and Specifications. RIDOT will provide a copy of any inspection reports to the Bank. Any adverse conditions, as determined by RIDOT, will be reported to the Bank who will suspend further payments until the adverse conditions have been rectified. RIDOT will perform a final project inspection before the final payment is made by the Bank.

830 R.I. Code R. 830-RICR-10-20-1.6