STANDARD TERMS AND CONDITIONS OF MRDA LOANS
These terms and conditions are intended for use by the MRDA Board in determining the terms and conditions that will be required of each loan.
Standard Terms of Loan
Amount of Loan: A loan for up to $500,000 may be approved by the Board.
- Application Fee: $1,000 to come in with application package.
- Origination Fee: 1% of amount loaned.
- Legal and Other Expenses: All legal and other fees associated with the loan will be paid by the applicant and can be rolled into the loan. (Fees can range from $5,000-$10,000).
- Interest Rate: The Board may approve a maximum interest rate of up to 2% over Wall Street Prime.
- Amortization Schedules: The Board may approve an amortization schedule satisfactory to the Authority. Consideration will be given to the applicant’s/owner’s ability to service the debt.
- Payment Schedule: Monthly payments that reflect principal and interest as agreed to in the amortization agreement usually will commence 30 days after the closing of the loan.
- Balloon Payment: The date of a balloon payment, before the end of the fifth (5th) year of the loan for the balance of the funds owed, must be established by the Board.
Standard Conditions of Loan
- Assignment of first collateral position on the real estate.
- A collateral assignment of all leases in the property.(Optional)
- The applicant/owner must purchase a comprehensive property and casualty insurance policy satisfactory to MRDA and name MRDA as loss payee.
- The applicant may not convey, lease, or transfer any collateral without the prior written consent of the Authority
- The applicant may not expend any portion of the loan funds directly or indirectly for purposes other than those approved by the Authority.
- The applicant must not materially alter the property without prior written consent of the Authority.
- The applicant must maintain the property in good condition and repair.
Other Conditions may be added by the Board
Additional Information that may be required
Three years of personal financial statements from principal(s), partner(s), or guarantor(s).