Title 7

SECTION 1738.153

1738.153 Terms and conditions.

§ 1738.153 Terms and conditions.

Terms and conditions of the loan and loan/grant combinations are set forth in a mortgage, note, and loan contract. Samples of the mortgage, note, and loan contract can be found on the Agency's website.

(a) Unless requested to be shorter by the Applicant, loans must be repaid with interest within a period that, rounded to the nearest whole year, is equal to the expected composite economic life of the assets to be financed, as determined by the Agency based upon acceptable depreciation rates. Expected composite economic life means the weighted average economic life of all classes of facilities necessary to complete construction of the broadband facilities plus 3 years.

(b) Principal payments for each advance are amortized over the remaining term of the loan and are due monthly. Principal payments will be deferred until 3 years after the date of the first advance of loan funds. Interest begins accruing when the first advance of loan funding is made and interest payments are due monthly, with no deferral period.

(c) Awardees are required to carry fidelity bond coverage. Generally, this amount will be 15 percent of the loan or loan/grant combination Award amount, not to exceed $5 million. The Agency may reduce the percentage required if it determines that the amount is not commensurate with the risk involved.

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