§219-8  Participation in loans by thedepartment.

(1)  The department of agriculture may provide fundsfor a share, not to exceed ninety per cent, of the principal amount of a loanmade to a qualified aquaculturist by a private lender who is unable otherwiseto lend the applicant sufficient funds at reasonable rates where the qualifiedfarmer is unable to obtain sufficient funds for the same purpose from theUnited States Department of Agriculture;

(2)  Participation loans under this section shall belimited by the provisions of section 219-6 and the department of agriculture'sshare shall not exceed the maximum amounts specified therefor;

(3)  Interest charged on the private lender's share ofthe loan shall not be more than the sum of two per cent above the lowest rateof interest charged by all state or national banks authorized to accept or holddeposits in the State on secured short term loans made to borrowers who havethe highest credit rating with those banks;

(4)  The private lender's share of the loan may beinsured by the department up to ninety per cent of the principal balance of theloan, under section 219-7;

(5)  When a participation loan has been approved bythe department, its share shall be paid to the participating private lender fordisbursement to the borrower.  The private lender shall collect all paymentsfrom the borrower and otherwise service the loan;

(6)  Out of interest collected, the private lender maybe paid a service fee to be determined by the department which fee shall notexceed one per cent of the unpaid principal balance of the loan; provided thatthis fee shall not be added to any amount which the borrower is obligated topay;

(7)  The participating private lender may take over alarger percentage or the full principal balance of the loan at any time that ithas determined, to the satisfaction of the department, that the borrower isable to pay any increased interest charges resulting; and

(8)  Security for participation loans shall be limitedby section 219-5(a)(6).  All collateral documents shall be held by the privatelender.  Division of interest in collateral received shall be in proportion toparticipation by the department and the private lender. [L 1977, c 212, pt of§2; am L 1989, c 261, §11; am L 1993, c 350, §10; am L 1997, c 258, §13; am L2001, c 55, §8(3)]