1. (a) Maximum amount of loan guarantee. A guarantee shall not exceed:

   1. (1) $750,000 or 70% of the loan amount, whichever is less;
   2. (2) $500,000 or 80% of the loan amount, whichever is less;
   3. (3) $250,000 or 90% of the loan amount, whichever is less.
2. (b) Program limit. The Program has a limit of three times the balance of the Texas Agricultural Fund less any portion used in the Young Farmer Interest Rate Reduction Program and the Young Farmer Grant Program, calculated on an annual basis as of August 31 each year.
3. (c) Security. Financial commitments approved under this program must be secured by a first lien on collateral of a type and value which, when considered with other criteria, in the judgment of the board or the commissioner affords reasonable assurance of repayment of the loan.
4. (d) Closing of the loan. The commissioner or a designee may attend the verification and signing of closing documents at the time, date, and location determined by the commercial lender.
5. (e) Closing costs. All closing costs associated with the closing of an approved loan, including the Authority's review of the closing documents by independent legal counsel, may be charged to the borrower.
6. (f) Co-participation. An applicant or eligible borrower may seek co-participation in financial assistance from other private and governmental sources. In any event, the Authority's maximum guarantee for any loan may not exceed the loan guarantee limits, with the lender(s) remaining at risk for at least 10% of the loan.
7. (g) Duration of Guarantee. The duration of the loan guarantee approved by the Authority must not exceed the lesser of the useful life of the assets being financed or 10 years.
8. (h) Interest rate. The interest rate on the guaranteed loan (not including guarantee fees) shall be the rate charged by the lender and approved by the Authority. To be eligible for a guarantee under the program, a loan with a term of more than one year must have a fixed interest rate.

Source Note:The provisions of this §28.29 adopted to be effective September 1, 2009, 34 TexReg 5902.