S.D. Admin. R. 68:01:01:05

Current through Register Vol. 51, page 56, November 4, 2024

Section 68:01:01:05 - Additional loan requirements

Loan requirements in addition to those specified in the act are as follows:

(1) The amount of the loan, net of the amount required to be deposited in the loan reserve account, may not exceed the lesser of the project costs, plus costs of issuance and capitalized interest, or the sum of the following: 80 percent of the appraised fair market value of the project upon completion, less the outstanding principal amount of any prior mortgage which is not to be discharged with proceeds of bonds of the series, 50 percent of the appraised fair market value of any equipment provided as security, and 100 percent of the stated amount of any letters of credit or surety obligations;

(2) To the extent project costs exceed the amount of the loan to be deposited in the loan account, other than to pay costs of issuance, the borrower must provide equity by making a cash contribution or providing a letter of credit, a surety obligation, additional collateral, or some other assurance of completion of the project and payment of project costs;

(3) The borrower must provide title insurance in an amount equal to the loan less the amount deposited in the loan reserve account;

(4) The borrower must provide evidence satisfactory to the authority that the project can be completed in a timely fashion;

(5) The maximum term of the loan may not exceed 80 percent of the useful life of the project, 20 years, or the final stated maturity of the series of bonds financing the loan, whichever is less;

(6) The borrower must demonstrate to the satisfaction of the authority a capacity to make the loan repayments;

(7) The borrower must demonstrate an adequate source of working capital based on projections;

(8) A guaranty in favor of the authority must be executed by persons having a 20 percent ownership interest in the borrower unless shares of the borrower are traded on a stock exchange or by any corporate guarantor;

(9) The borrower must supply financial statements, which may be audited or unaudited, for each of the three full fiscal years prior to the date of issuance of the series of bonds and interim financial statements when available; and

(10) Facilities which are not owner-occupied must be leased to meet debt service. The borrower must provide assignments of leases land of rent payments to the authority by the date of issuance of any bonds. The terms and conditions of any such leasehold estate securing a loan are subject to approval of the authority.

S.D. Admin. R. 68:01:01:05

13 SDR 134, effective 3/31/1987; 21 SDR 14, effective 8/3/1994.

General Authority: SDCL 1-16B-14(4).

Law Implemented: SDCL 1-16B-14(4), 1-16B-37.