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May AY.28.20042,11: 16RM Gradient Technology 763-717-9481110.516 P.2 p. 3 <br /> MAY.28.2004 10;e2AM N0.503 P.3 <br /> • Life Insurance: A collateral assignmast of life insurance in the amount of$500,000 shall be <br /> required during the construction period and until the City of Elk Rivet Loan funds arc advanced <br /> to reduce The Bank of Elk River construction loan to 8883,500 or leas. A final"as-built" <br /> appraisal will also be required to confirm the completed project value supports a 75%loan-to- <br /> value <br /> oan to- <br /> value ratio for the portion of the debt carried by The Bank of Elk River. <br /> Prepayment Penalty: None <br /> II. perinanent Mort ewe Loan: <br /> Borrower: Same as construction loan. <br /> Loan Amount: <br /> A. The Bank of Elk River to provide S1183,500 maximum amount of finding in the form of a <br /> 1"real estate mortgage,not to exceed 75%of the appraised value and in any event not <br /> more than.$883,500. <br /> B. The City of Elk River Revolving Loan Fnnd to provide 5100,000 maximum amount of <br /> funding in the form of a Zee real estate mortgage,not to exceed 8.5%of the appraised <br /> value and in any event not more than S100,000. <br /> Interest Rote: <br /> A.The Bank of Elk Rivet 6.25%,fixed rate for 3 years. <br /> B,The City of Elk River Revolving Loan Fund(subject to approval by City of Elk River)prime <br /> • tate minus 4%with a floor of 2%. <br /> Costs/Fees: No additional fees or costs other than $100.00 extension and modification <br /> recording cost to convert from construction to term loan. <br /> Repayment/Terra: <br /> A. The Bank of Elk River 1'mortgage would be amortized based on a 20-year amortization <br /> with a three-year balloon, <br /> B. The City of Elk River 2M mortgage loan would be attvctured based on the tax rebate <br /> schedule.An assignment of the tax rebate in favor of the lender will be required.This <br /> schedule is anticipated to provide$12,000 in annual loan payment capacity with tax rebate <br /> payments being distributed to the lender semi-annually. The initial loan will be for a five <br /> year period at the below market interest rate. The City Revolving Loan Fund allows for an <br /> additional 2 year extension at market sates.The City Loan is expected to contain a 7-year <br /> balloon(maxamum term on City loan fund). <br /> Collateral: Same as the construction loan. <br /> Guarantees: Same as the construction loan. <br /> • <br />