Purpose – The primary purpose of CDBG and the CDBG-CV program is to benefit low- and moderate-income (LMI) individuals, households, and neighborhoods. The CDBG-CV program (the "Program") may provide eligible businesses with financial assistance to retain jobs in the form of a forgivable loan.
LOAN SECURITY POSITION
LOAN-TO-VALUE RATIO (LTV)
DEBT SERVICE COVERAGE
PROGRAM LOAN ADVISORY COMMITTEE
The LAC members may be from local financial institutions, the city or other interested parties who have the professional capacity to review and evaluate commercial loans. LAC members are responsible for reviewing each loan application funding proposal and making recommendations to the City.
LOAN APPLICANT CONFIDENTIALITY
LAC meetings will be scheduled by town staff once a loan is underwritten and ready for review and approval. LAC may request additional information and or attach contingencies for final approval and loan closing.
DISPUTE RESOLUTION/APPEALS PROCEDURE
EXCEPTIONS / SPECIAL CIRCUMSTANCES
LOAN CLOSING PROCESS
CDBG-CV funds will only be disbursed for reimbursement to the borrower for documented eligible project expenditures or may be paid directly to third-party vendors for project costs. Ongoing operating costs for the business for working capital will be reimbursed based on monthly documented costs.
LOAN UNDERWRITING PROCESS 6.1 GENERAL CREDIT REQUIREMENTS
MANAGEMENT AND CAPACITY REQUIREMENTS A Loan Applicant must show
MEETING SIX UNDERWRITING STANDARDS
ADDITIONAL PROJECT UNDERWRITING CRITERIA
Personal accounts are required for each person who owns 20% or more of the business. In addition to these statements, federal tax returns for owners and the business for the past three years are necessary to provide a historical perspective on income.
LOAN SERVICING
LOAN COLLECTION AND SERVICING
REQUIRED REPORTING
PROGRAM ADMINISTRATION
APPLICATION CHECKLIST
T OWN OF T RUCKEE
B USINESS E CONOMIC S UPPORT A PPLICATION
CONTACT INFORMATION
BUSINESS INFORMATION
BUSINESS INFORMATION (CONTINUED)
BUSINESS SALES INFORMATION
3 Total monthly sales? $
DESCRIPTION OF BUSINESS ASSETS
MANAGEMENT
LOAN REQUEST
PROJECT INFORMATION
COLLATERAL
OTHER FINANCING
6 Second Source
PERSONAL GUARANTEES
EMPLOYMENT PROJECTIONS
CREDIT INFORMATION
Has the company met any of its tax obligations (business, real estate, payroll, sales, etc.). Is the company involved in a lawsuit that would impact its financial solvency or ability to continue operations? Have the company, any of its executives, or its subsidiaries or affiliates, ever been involved in bankruptcy, creditors' rights or receivership proceedings?
Have the management personnel or principal shareholders of the company ever been charged with or convicted of a crime. Do you buy from, sell to or use services from any company in which a person in your company has a significant financial interest.
8 Vendor Name
BUSINESS NOTES PAYABLE SCHEDULE
DISCLOSURES
11 IMPORTANT - READ BEFORE SIGNING
DISCLOSURES (CONTINUED)
EXHIBIT A ▪
RACE AND ETHNIC DATA REPORTING FORM
PLEASE COMPLETE THIS FORM FOR EACH PERSON LISTED IN THE MANAGEMENT SECTION
Ethnic Categories* Select One Hispanic or Latino
Racial Categories* Select All that Apply
There is no penalty for persons who do not complete the form
General Instructions
The two ethnic categories you should choose from are defined below. You should check one of the two categories
The five racial categories to choose from are defined below. You should check as many as apply to you
EXHIBIT B ▪
STATISTICAL DATA REPORTING FORM
VETERAN OF THE
FEMALE HEAD OF
YES NO
EXHIBIT C ▪
INSURANCE
PLEASE PROVIDE US WITH THE FOLLOWING INFORMATION, OR A COPY OF YOUR INSURANCE POLICIES
EXHIBIT D ▪
JOB RETENTION STATEMENT
Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies or makes any false fictitious or fraudulent statements or
I/We are making this statement in relation to the Micro Business Assistance Loan we are receiving to help respond to the coronavirus by providing us with a Micro Business Assistance Loan (the “Aid Type”) for the purpose of providing economic support due to the COVID pandemic from the City of Truckee ( “Organization”) through a program administered by the City with funding from the United States. In addition, I/we have received or will receive the following amounts and types of assistance from the sources listed below ("Replication Assistance"). I understand that the amount of aid received by the City of Truckee must be reduced by the amount of duplicate aid received or by the amount to be received from other sources for the same purpose.
Therefore, I/we understand that if I/we receive assistance from a source other than the Town of Truckee for the same purpose, I/we must repay the assistance received by the Town of Truckee. I/we certify under state and federal penalties for perjury and fraud that the information provided above is true and accurate and I/we may be required to repay all assistance received by me/us from the Town of Truckee, payment of fines and/or imprisonment if I/We provide false, incomplete or misleading information in this Declaration or during the rest of this process.
PRE-APPROVED LOAN DISBURSEMENT SCHEDULE Projected Dates & Amounts for
Loan Disbursement
- Statement of Project’s Site Control
- Statement of Project’s Construction Status
- Consequences of Choice Limiting Action
- Statement of Project’s Use of Funds for Acquisition
- Statement of Project’s Relocation Compliance
- Consequences of Non-Compliance with Relocation or Acquisition Laws
- Statement of Project’s Use of Funds for Construction
- Consequences of Non-Compliance with Davis Bacon and Related Acts
Such action will prevent RE from awarding CDBG CV funds to the project. The Loan Applicant hereby acknowledges and confirms that there is and will be no election limiting actions that take place on site until RE has completed an ERR for the project. The applicant agrees to publish the existing conditions for the project and will not proceed with development work until RE has given written permission to do so.
Applicant agrees to disclose the existing conditions of the project and will not proceed with any property purchase or development work until the RE has given written permission to do so. Applicant agrees to disclose the existing conditions of the project and will not proceed with any property development work until such time as the RE has given written permission to do so.
ATTACHMENT C TOWN OF TRUCKEE
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) BUSINESS LOAN SERVICING AND FORECLOSURE
POLICIES AND PROCEDURES
CDBG Loan Servicing Policies and Procedures
- Monitoring Loan Repayments
- Monitoring Payment of Property Taxes and Insurance
- Monitoring Business and/or Personal Financials
- Monitoring Loan Covenants Restrictions and Business Location
- Processing Requests for Subordination, Loan Restructuring or Liquidation of Secured Collateral
The lender will verify that property taxes are paid current annually for the life of the loan. State and federal taxes must be paid by the borrower and the lender will verify that. The lender will use its staff and/or the lender to re-insure the business.
The lender will use their staff or the loan servicing agent to reinsure the business. The lender will send a letter to the borrower approving the early repayment of the loan and no prepayment fee will be charged.
CDBG Loan Foreclosure Policies and Procedures
Required Request for Notice of Default
Disbursement of a lump sum loan: If the borrower wants to pay off the loan in full, he must submit a written request to the lender. Upon receipt of the full balance of the loan funds, the lender will release all liens (UCC liens, real estate deeds of trust, other loan covenants or restrictions) related to this loan. Lien release documents and the complete note and deed of trust will be forwarded to the borrower, along with any other tax information (annual loan interest paid to date).
Normal Loan Term Disbursement: Upon receipt of the final loan payment from the Borrower, the Lender will document that CDBG's national goals and public benefit were met (if applicable) and that the loan is in compliance with any other agreements. A loan in good standing with a zero principal balance will allow the lender to release all liens, same as above, and send the borrower a full loan repayment letter with copies of the release documents.
Foreclosure Process When Lender a Junior Lien Holder
If this is the case, the lender can correct the foreclosure and add charges to the loan balance by notifying the additional advance on the existing note. If the lender does not have sufficient funds to pay the senior lien in full, it may choose to cure the senior lien and foreclose on the property itself. As long as the property has sufficient value, the lender can afford to pay the foreclosure process and repay the senior lien holder and keep some or all of their investment.
If the Lender decides to reinstate, the old lien holder will accept the amount to reinstate the loan up to five (5) days before the designated "foreclosure sale date". This. If the Lender determines that restoring and maintaining the property is not cost effective and allows the old lien holder to complete the foreclosure, the Lender's lien may be eliminated due to insufficient sale proceeds.
Process When Lender is a Senior Lien holder
When a senior lien holder initiates a foreclosure process and the Lender is notified via a Request for Notice of Default, the Lender, which is the junior lien holder, can cancel the foreclosure proceedings by "reinstating" the senior lien holder. The reinstatement amount or redemption amount must be obtained by contacting the old lien holder. The Lender shall consult with the Borrower to determine whether, with the current payment of the old lien holder, the Borrower can secure future payments.
If the lender determines, based on information about the recovery amount and the status of the borrower, that keeping the loan current will not preserve the loan, then staff must determine whether it is cost-effective to protect their position by allowing the senior lien holder in total to pay off. and restructure the debt in such a way that the unit is made affordable to the borrower. 34; foreclosure sale date" generally occurs approximately four (4) to six (6) months from the date of recording of the "Notice of Default". If Lender fails to reinstate the senior lien holder prior to five (5) days prior to the date of the foreclosure sale would then require the senior lien holder to pay off the balance in full, plus costs, to cancel the foreclosure.
Thirty Day Delinquencies
The Lender will send a registered letter to the Borrower seven days prior to the sixty day delinquency date stating the delinquent amount and delinquent charges. Any changes in the borrower's health, family circumstances or financial situation that limit the ability to repay. If an extraordinary personal situation (loss of job, loss of spouse, serious illness, etc.) limits the ability to repay.
If no response is received by the sixty day delinquency date, the Borrower will be reported to all three credit bureau agencies.
Ninety Day Delinquencies
- Can the loan be cured and can the rates and terms be adjusted to allow for affordable payments such that foreclosure is not necessary?
- Can the Borrower refinance with a private lender and pay off the Lender?
- Can the Borrower sell assets and pay off the Lender?
- Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)
If the balance is substantial and all the above factors have been taken into account, the lender may decide to start foreclosure. This notice must include the exact amount of funds that must be remitted to the lender to avoid foreclosure (such as funds to transfer unpaid BMIR current or pay off DPL). After the thirty days have passed, the lender must contact a reputable foreclosure service or local title company to prepare and record the foreclosure documents and send all necessary notices to the owner and subordinate holders.
The service will notify the lender of all necessary documentation to initiate foreclosure (usually the deed and deed of trust) and the funds the owner needs to cancel the foreclosure process. Once the process is complete and the property has "returned to the beneficiary" at the foreclosure sale, the lender can sell the assets themselves or through a local professional.
SUBROGATION AGREEMENT
If the Business has received full payment of the Grant/Loan proceeds, any subsequent DOB proceeds will be retained by the Grantor/Lender and remitted to the [Name of Grantor]. If the Business has not received any payment from the Grant/Loan proceeds, any subsequent DOB proceeds will be used by the Grant/Lender to reduce payments of the Grant/Loan proceeds to the Business, and all subsequent DOB proceeds will be returned to the Business. . If the Business has received a portion of the Grant/Loan Proceeds, any Subsequent DOB Proceeds will be used, retained and/or disbursed in the following order: (A) Subsequent DOB Proceeds will first be used to pay the remaining payments of the Allowance to be reduced /Loan proceeds, and subsequent DOB proceeds in such amount shall be repaid to the Business; and (B) any remaining Subsequent DOB proceeds shall be retained by the Grantor/Lender and remitted to the [Grantor Name].
If the Grantor/Lender determines that the Company does not qualify for participation in the Program or if the Company chooses not to participate in the Program, the subsequent DOB proceeds shall be returned to the Company and this Agreement shall terminate. Upon the Lender/Lender's recovery of an amount equal to the Grant/Loan Proceeds to the Payee Company, the Lender/Lender shall assign to the Company all rights granted to the Lender/Lender under this Agreement.
