N.Y. Comp. Codes R. & Regs. tit. 9 § 7910.3

Current through Register Vol. 46, No. 50, December 11, 2024

Section 7910.3 - Interest subsidies

(a) General. The amount of the interest subsidy shall be the difference between the total interest due on a program loan over the life of the loan, calculated at the financing institution's lending rate at the time of closing, and the interest due on such loan over such period, calculated at the program rate, multiplied by a fraction equal to the subsidy period divided by the life of the loan. The total amount of the interest subsidy will be discounted to reflect the payment of interest subsidies in advance of their becoming due.

(b) Variable rate loans. For variable rate loans, the amount of the interest subsidy will not change during the term of the loan, regardless of fluctuations in the financing institution's lending rate on that loan, except in cases where the financing institution's lending rate drops to a level where the interest subsidy would result in the approved applicant receiving a negative net interest rate. In such cases, the amount of the interest subsidy will be reduced accordingly.

(c) For loans with alternative payment schedules allowed pursuant to section 7910.8(b)(3) of this Part, (i.e., loans other than fully amortized or fixed principal payment loans) the amount of the interest subsidy shall be calculated as though the loan were fully amortized over the subsidy period.

(d) Subsidy period. Interest subsidies will be limited to a period of 10 years or the life of the loan, whichever is less.

(e) Initial program rate. The initial program rate will be five percent for all program loans. At the end of three months following the effective date of this Part and from time to time thereafter, the program rate will be reviewed by the commissioner and may be changed for new loans being issued under the program in accordance with subdivision (f) of this section.

(f) Revisions to program rate. At the discretion of the commissioner, the program rate may be adjusted, and different program rates may be established for different sectors or audiences, to reflect market changes, loan demand, and the possible need to stimulate participation in the program by certain audiences. Revised program rates will be at least 25 percent below the prime interest rate. Notice of any revised program rates will be published in the State Register.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 7910.3