1. (a) The program will work in partnership with lenders who are familiar with making farm or ranch land loans. Such partnership will include a joint funding of financing to eligible applicants in Texas. Such joint funding will be structured so that the Authority's portion will be 50% of the total financing not to exceed the limitations defined in subsection (b) of this section.
2. (b) The maximum loan amount shall not exceed 95% of the appraised value or 95% of the purchase price of the farm or ranch land, whichever is less, but in no case shall the total loan amount exceed $250,000. Appraised value is defined as either the market data approach or the income approach, whichever is applicable.
3. (c) The Authority and the lender will share the pledged collateral in a ratio of 50% to the Authority and 50% to the lender and the Authority will provide a lender a guarantee on the lender commitment in a percentage not to exceed 15% of the lender's total commitment.
4. (d) The terms of the loan will be negotiated by the applicant, lender, and the Authority on a case-by-case basis.
5. (e) Fees. A non-refundable application fee of $50 will be required with each application presented to the Authority for consideration. The Authority may charge an origination fee as identified in the following fee schedule. All fees will be the responsibility of the applicant and shall be remitted to the Authority.
   Attached Graphic
   
6. (f) Interest rates on loans will be based upon rates established by the lender and the Authority. Interest rates established must be variable, adjusting no less than semi-annually.
7. (g) Security. Loans must be secured by collateral of a type, amount and value which affords reasonable assurance of repayment when considered with other criteria and must include a first lien deed of trust on the property being financed. The total outstanding amount of the loan, plus all accrued and unpaid interest, will be due and payable upon the sale of any financed property.
8. (h) Closing costs. All closing costs associated with the closing of an approved loan, with the exception of the Authority's review of the closing documents by independent legal counsel, shall be the liability of the borrower.
9. (i) Closing of the loan. The staff may attend the verification and signing of the closing documents at the time, date and location determined by the Authority and lender. The closing documents must include all those documents, which are necessary for the protection of the Authority and the lender as determined by the legal counsel.
10. (j) The loan will not be subject to any prepayment penalties by the lender or the Authority.
11. (k) Reporting requirements. The borrower shall provide annual financial statements to the lender. The lender shall submit a copy of the financial statements to the Authority. The Authority may request other reports or documentation as necessary. The lender shall report in writing any non-compliance with or default of loan covenants to the Authority within 15 days of each noted occurrence.

Source Note:The provisions of this §24.12 adopted to be effective June 16, 1995, 20 TexReg 4047; amended to be effective October 4, 1995, 20 TexReg 7595; amended to be effective July 1, 1996, 21 TexReg 5685; amended to be effective September 16, 1997, 22 TexReg 9243; amended to be effective November 28, 1999, 24 TexReg 10319; amended to be effective August 26, 2001, 26 TexReg 6099.