Low Interest Revolving Loan Fund
LOAN POLICY
Program Objective
The Warsaw Community Development Corporation Low Interest Revolving Loan Fund was established in 1985 to promote the physical and economic revitalization of downtown Warsaw. The availability of funds at a low interest rate has a proven record of encouraging reinvestment in existing properties located within the C-4 District*. Property owners who elect to implement specific renovation and restoration projects within the C-4 District may be eligible for a WCDC Low Interest Revolving Loan. Tenants with leases equal to the term of the loan, and those buying property on contract, may also be eligible.
* The loan area was expanded in 2002 to correspond with the C-4 district as defined by the City of Warsaw Zoning Ordinance and outlined in red in the attached map. This C-4 district is bounded on the north by Lyon Street, on the east by the railroad tracks, on the south by Winona Avenue, and on the west by Columbia Street. This district also encompasses what is referred to as the Historic Courthouse District.
Project Funding
Owners of individual projects may receive loans up to $40,000 (up to $20,000 for exterior façade renovation, up to $20,000 for second and/or third floor renovation for either residential or commercial use, and up to $20,000 for first floor renovation for commercial or retail use – the total amount of the loan cannot exceed $40,000). The loan may be taken out for a term up to ten (10) years, and there is no prepayment penalty. The interest rate charged is 75% of New York Prime as quoted in the WallStreetJournal on the date of the commitment letter. The commitment shall be valid for 90 days. In the event the project is not complete within the 90-day commitment period, the Loan Committee may at its discretion, recommit at the same or different rate for a time deemed prudent under the circumstances.
All loans with a maturity of no longer than five (5) years will be repriced at the end of the first five-year period at 75% of the then current National Prime Rate. Should any participant contribute funds to the program for which no interest return is requested, such funds will become a part of the loan pool and will serve to lower the rate charged to borrowers.
If the borrower's WCDC membership goes unpaid for 60 days or more during the life of the loan, the interest rate of the loan will be set at a default rate of NY Prime + 2.00% until the borrower's membership is paid.
Applications
Individuals may apply for the Low Interest Revolving Loan through the WCDC. Applications are made on standard forms approved by all lending participants. The completed application is then forwarded to the Loan Committee for evaluation. The Loan Committee contains one representative from each lending participant and a representative of the WCDC Board of Directors. After review, the Loan Committee approves or denies the application based on the applicant's financial background. * Review of the loan application should be completed within 30 days from the date of receipt, unless there is a request for additional information.
*The financial review by the Loan Committee takes place after a review of project merit by the WCDC Design Committee.The Design committee looks at project drawings, cost estimates, and plan of work. The Design Committee verifies that proposed changes fall within the Federal Department of Interior Guidelines, if the request is for exterior façade renovation. The Design Committee does not review the financial portion of the application.
WCDC Revolving Loan App _2.doc
Matching Facade Grant Program
The WCDC also administers a Matching Facade Grant Program. The program is funded by the City of Warsaw and is available to WCDC members that own or operate buildings/businesses in the Historic Courthouse District of downtown Warsaw. Please click on the link below to receive a copy of the grant rules and the application.