OAR 690-095-0060
Loan Security
(1)
The director shall require repayment of an approved loan to be secured by a first priority lien or by other good and sufficient collateral as described in ORS 541.740 (Liens and other loan security), as applicable to the applicant. The director, in his or her discretion, using the information in an application and any other information available, will determine the security value of the collateral provided under the loan document.(2)
An applicant may demonstrate adequate security or good and sufficient collateral if:(a)
The applicant has ad valorem taxing power that it has exercised and pledged to secure the loan;(b)
The applicant is an individual, profit-making partnership or corporation or non-profit corporation subject to ORS Chapter 65 (Nonprofit Corporations) whose principal income is from farming in Oregon, the loan shall be secured by a mortgage or security agreement in the full amount of the loan and the loan amount does not exceed 70 percent of the appraised value of the security for the loan; or(c)
The applicant is a qualified water developer that is not an individual, profit-making partnership or corporation or non-profit corporation subject to ORS Chapter 65 (Nonprofit Corporations), security may include:(A)
First lien to the State of Oregon attached to the real property of the water developer, and the user charges owed to or received by the water developer;(B)
A lien attached to all real property whether owned by the water developer or others, which is served by the water development project or which is served by a water source enhanced or restored by the water development project; or(C)
An agreement entered into by the water developer wherein assessments, user charges or other revenue is pledged for security of loan repayment and that such revenue shall be maintained at no less than 125 percent of the debt service on the loan.(d)
The commission determines, in consultation with the State Treasurer, that such other good tendered as collateral by the applicant is “sufficient” collateral to secure the loan instead of, or in addition to, a lien.(3)
Real property used for securing the loan shall have been appraised by a licensed appraiser, county assessor, or department appraiser, at the discretion of the director, within six months prior to the date of the letter of intent or if there is no letter of intent, the loan document.(4)
Where the applicant is a water developer described in ORS 541.700 (Definitions for ORS 541.700 to 541.855)(7)(a), (b), (c) or (d), the loan shall be secured by a mortgage or security agreement in the full amount of the loan. The mortgage or security agreement shall be a first lien upon such real property of the water developer as the commission shall require for adequate security. The commission, in consultation with the State Treasurer, may accept other good and sufficient collateral to secure a loan instead of, or in addition to, a lien.(5)
A partial release of lien may be granted by the director upon written request of a borrower if the remaining property provides adequate security as required by law and these rules.
Source:
Rule 690-095-0060 — Loan Security, https://secure.sos.state.or.us/oard/view.action?ruleNumber=690-095-0060.