The Department shall charge a one-time (up-front) insurance premium. Premiums are due at the time financial institutions originate loans and execute loan authorizations with the Department. The Departments insurance is not effective until premiums are paid. It is expected that financial institutions will pass along the cost of premiums to borrowers. Premiums, expressed as a percentage of the Departments maximum liability, shall be charged in accordance with the schedule for the programs available from the agency.
For revolving lines of credit or evergreen facilities, the premium is based on the Departments maximum liability in regard to the credit facility made available to a borrower, regardless of whether or not the line of credit is fully drawn down.
The premium due on a $200,000, five year loan with 80% Conventional Insurance would be $3,200 ($200,000 x .80 x .02);
The premium for a $200,000, eight year loan with 25% First Loss Insurance is $2,500 ($200,000 x .25 x .05);
The premium for a $1,000,000 five-year loan with a 15% Collateral Support Insurance is $5,250 ($1,000,000 x .15 x .035).
The premium for a $200,000 loan with 75% Evergreen Entrants Insurance is $2,625 ($200,000 x .75 x .0175); this amount would be due every year thereafter for up to four additional years, assuming the loan and amount is renewed each year for the maximum term permitted under the Evergreen Entrants program (5 years);
The premium for a $700,000 increment to the line of credit with 30% Evergreen Plus Insurance is $3,675 ($700,000 x .30 x .0175); this amount would be due every year thereafter for up to four additional years, assuming the loan and amount is renewed each year for the maximum term permitted under the program (5 years);