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Fund C - Governmental

 

Interest Rates:

The Fund C program will make loans from accumulated program assets while reserving the right to issue bonds to increase program capacity.  Should the Authority decide to issue bonds the interest rate offered to borrowers of loans funded with bond proceeds will be revised to reflect the cost of funds.

SFY 2019
Loan TermInterest Rate
1-5 years2.50%
6-10 years2.75%
11-20 years3.00%

 

Repayment Period:

First repayment due within one year of project completion.

 

Application Fee:

None

 

Loan Service Fee:

A fee of 0.20% of the unpaid loan balance paid annually.

 

Financing Expenses:

Should the Authority decide to issue bonds, the interest rate offered to borrowers of loans funded with bond proceeds will be revised to reflect the cost of funds.  A pro-rata share of the cost of issuance will be passed through to the projects.

 

Loan Payment Frequency:

Semi-annual payments beginning June 1 or December 1 following the final draw under the loan.  Payments will be set-up on auto-debit from a designated account held by the Borrower.

 

Debt Service Reserve:

None

 

Replacement Reserve :

5% of the gross KIA loan amount funded over 20 years and maintained by the borrower for the life of the loan.

 

Eligibility:

Eligible projects are those permitted by KRS224A.011(16). The applicant must be a governmental agency and the project must be financially feasible as determined by KIA staff.

 

Priority of Loan Awards:

First-come, first-served, as long as funds are available.

 

Loan Application Process:

1.  Prospective borrower submits Letter of Intent to KIA (form located under Financial Assistance Forms)

2.  KIA determines funding availability and project eligibility

3.  KIA distributes either a loan invitation or declination letter

4.  Borrower submits loan application to KIA.

5.  KIA performs credit analysis and presents before KIA board for approval.