| (a) The board or the commissioner shall consider the
following factors in deciding whether to approve an application for
a loan guarantee:
(1) the anticipated benefits from granting a loan guarantee
to the eligible applicant, including both potential job creation and
commercial benefits to the agricultural industry;
(2) the eligible applicant's qualifications;
(3) the feasibility of the eligible applicant's plans;
(4) other repayment sources available to the eligible
applicant; and
(5) any other factor or circumstance within statutory
authority and reasonably related to the goals and objectives of the
Act.
(b) Eligibility of the lender. The lender originating
a loan must have a continuing ability to evaluate, perform, and service
the loan; to make the necessary reports as identified in the rules
of the program; and to collect the loan, if requested by the Authority,
upon default. The commercial lender must agree to exercise due diligence
in the servicing, maintenance, review, and evaluation of performance
without regard to the existence of the Authority's guarantee or any
other limitation of risk. The board or the commissioner reserves the
right to decline a loan guarantee, or revoke a loan guarantee to a
lender which does not present sufficient evidence that they have the
capacity or interest to appropriately make and service the loan. The
board may revoke or limit a loan guarantee if the lender fails to
substantially comply with financial industry standards pertaining
to reasonably prudent administration, origination, servicing, or underwriting
of loans, or if the lender fails to comply with all obligations required
under agreements with the Authority.
(c) The Authority has adopted a Credit Policy and Procedures
document which contains additional guidelines used by the Authority
in the loan guarantee review and approval process. The Credit Policy
and Procedure document may be obtained from the Texas Agricultural
Finance Authority, Texas Department of Agriculture, P.O. Box 12847,
Austin, Texas 78711.
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