1. (a) Eligibility requirements. The Authority may purchase an undivided interest in a loan made by a lender provided that:

   1. (1) the project meets the eligibility criteria as defined in §28.7 of this title (relating to Project Eligibility Requirements);
   2. (2) the project meets the guidelines of the Authority's Credit Policy and Procedures document incorporated by reference herein as stated in §28.11(d) of this title (relating to Criteria for Approval of Financial Assistance);
   3. (3) the undivided interest purchased by the Authority does not exceed the maximum amount as stated in §28.10(b) of this title (relating to General Terms and Conditions of the Authority's Financial Assistance); and
   4. (4) the lender meets the eligibility criteria as defined in §28.13 of this title (relating to Eligible Private Lenders) and shall service the loan as defined in §28.12 of this title (relating to Loan Administration).
2. (b) Interest rate. The participation purchased by the Authority shall be at the same interest rate as the original loan made by the lender, unless a different rate is approved by the board or its designee.
3. (c) Written agreement. The participation purchased by the Authority shall be evidenced by a Participation Agreement supplied by the Authority and executed by both the lender and the Authority.
4. (d) Required documentation. The lender must submit a complete credit package, including the lender's credit analysis, borrower's financial information and other documents necessary for the Authority to evaluate the borrower's financial condition. If the lender has already made the loan, a copy of all collateral and security documents should be submitted with the application.
5. (e) Staff review. Staff will review the credit package for completeness and will notify the lender of any additional information required. When all required information has been received, staff will conduct a credit review, evaluate the technical and market feasibility of the project, and examine the benefits of the project for Texas agriculture and economic growth in the state.
6. (f) Board review. Staff will submit a report on each participation to be purchased to the board, which shall include a recommendation for approval or denial. If staff determines that a participation does not meet the minimum underwriting standards established in the Credit Policy and Procedures, then staff shall notify the lender in writing to this effect, and shall advise the lender of which minimum underwriting standards are not met. The lender may resubmit the participation application for further consideration at such time as the minimum standards are met. Approval of a participation will be by a majority of board members present.

Source Note:The provisions of this §28.15 adopted to be effective August 24, 1999, 24 TexReg 6472; amended to be effective September 28, 2005, 30 TexReg 6049; transferred effective October 1, 2007, as published in the Texas Register September 28, 2007, 32 TexReg 6793.