Financial Program Frequently Asked Questions

How does the loan process work?

The loan process has several steps before loans are submitted to the board for approval. First contact must be made with the financial coordinator. If the project sounds like something that falls under the guidelines the coordinator will have the applicant fill out a loan form and send it in with the required documents.

The paperwork is then reviewed and assets verified for securing the loan. Calculations are done to estimate cost assessments to the borrower at different terms. This information is then placed into a memo to the Board to be presented at their bi-monthly meeting.

The board will then review the application and either approve or disapprove the application.

What is the term of the loan?

The loan term can range from 5 to 60 years. Currently the average term for loans is 10 to 15 years.

What will be the interest rate?

The board sets the rate at their first meeting of the year. There are generally 2 rates set one for irrigations related projects and one for municipal water systems. The current rates can be found on the Financial Program web page.

Does a representative from the organization need to be present at the board meeting when the loan is being reviewed?

It is recommended that a representative be present during the loan review. This will aid the Board should they have any question which falls outside of the scope of the coordinators memo to the Board.

How can I get a loan form?

Loan form can be obtained in 2 ways. They can be down loaded from this web site or you can call and have one either faxed or mailed to you.

What if all the funds loaned are not used?

It is not required that all funds appropriated for the loan be used. Funds that are not used remain in the revolving loan account. The loan repayment is based on the funds appropriated.

What are the minimum and maximum amounts that can be borrowed?

The minimum amount is $5,000. With changes enacted by the 2007 legislature there is no longer a maximum cap for loans.

The project was financed by splitting the project into several smaller projects. How will repayment be scheduled?

According to the State Code, each loan must be repaid upon completion of the project. If one of the projects is completed before the other, payment will be due on the completed project one year from date of completion.

The project ran into unforeseen costs, how can additional funds be obtained?

In the event that the project is running over budget and additional funds are required. An increase in the loan can be authorized by the board. An additional application will need to be filed out and the same process is followed. Upon approval an amendment to the loan will be made and the loan restructured.

Is there a penalty for paying off the loan early?

No. Loans can be paid off any time after completion of the project. However payment will require for the principle, interest and accrued interest from construction be paid.