[§514D-12]  Participating community development financial institutions; reserve account.  (a)  To participate in the condominium loan loss reserves program, an eligible community development financial institution shall enter into a participation agreement with the authority that sets out the terms and conditions under which the authority will make contributions to the community development financial institution's reserve account and specifies the criteria for a loan to qualify as a loan under this part.

     (b)  On approval by the authority and after a community development financial institution enters into a participation agreement with the authority, the authority shall establish a reserve account at a participating community development financial institution making a loan under this part and deposit an amount equal to five per cent of the original loan amount.  The reserve account shall be used by the authority to cover any losses arising from a default of the loan made by the participating community development financial institution under this part or as otherwise provided by this part.

     (c)  When a participating community development financial institution makes a loan enrolled in the condominium loan loss reserves program, the participating community development financial institution shall pay to the authority a fee equal to fifty basis points of the amount deposited into the condominium loan revolving fund to support the loan, which the authority shall deposit into the reserve account, and annually thereafter.  The participating community development financial institution may recover from the borrower all or part of the amount the participating community development financial institution is required to pay under this subsection in any manner agreed to by the financial institution and borrower.

     (d)  For each loan under this part, the participating community development financial institution shall provide executed loan documents to the authority, within the period prescribed by the authority, including the amount of fees received from the borrower. [L 2025, c 296, pt of §19]