Utah Admin. Code R311-212-6 - Security for Loans
(1) When an
applicant applies for a loan of greater than $30,000, the applicant must pledge
for security personal or real property which meets or exceeds the following
criteria:
(a) the loan amount may not be
greater than 80% of the value of the applicant's equity in the security for
cases where the Department obtains a first mortgage position; or
(b) the loan amount may not be greater than
60% of the value of the applicant's equity in the security for cases where the
Department obtains a second mortgage position.
(2) The applicant shall provide acceptable
documentation of the value of the property to be used as security using:
(a) a current written appraisal, performed by
a State of Utah certified appraiser;
(b) a current county tax assessment notice;
or
(c) other documentation
acceptable to the director.
(3) A title report on all real property and a
UCC-1 clearance on all personal property used as security shall be submitted to
the director by a title company or appropriate professional person approved by
the director.
(4) When the title
report indicates an existing lien or encumbrance on real property to be used as
security, the existing lien holders may subordinate their interest in favor of
the Department.
(a) the director will accept
no less than a second mortgage position on real property pledged for loan
security.
(5) When a
corporation seeks a loan, its principals must guarantee the loan
personally.
(6) The applicant must
provide a complete financial statement with cash flow projections for debt
service.
(7) Aboveground storage
tanks and real property on which they are located will not be acceptable as
security.
(8) USTs and the real
property on which they are located will not be acceptable as security unless:
(a) the UST facility offered for security has
not had a petroleum release which has not been properly remediated;
and
(b) the applicant provides
documentation to demonstrate the UST facility is currently in compliance with
the loan eligibility requirements set forth in Section
R311-212-3.
(9) If a loan is made without
security, the maximum loan repayment period will be seven years.
Notes
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