ARC 8179C

ARC 8179C

Proposing rulemaking related to Iowa main street loan program
and providing an opportunity for public comment

Additionally, the following changes are proposed:

●Existing rules 265—11.1(16), 265—11.2(16), and 265—11.3(16) are removed because those rules are unnecessary.

●Existing rule 265—11.4(16) is renumbered as rule 265—11.1(16). Unnecessary definitions are removed from the existing rule. A new definition of “authority” is added for clarity.

●Existing rule 265—11.5(16), relating to applications for loans, is removed.

●Existing rule 265—11.6(16) is renumbered as rule 265—11.2(16). The rule is updated to be more concise.

●Existing rule 265—11.7(16) is renumbered as rule 265—11.3(16). The rule is updated to eliminate the criteria for evaluating loans. Only those portions of the rule relating to ongoing administration of outstanding loans are necessary.

A Regulatory Analysis for this rulemaking was published in the Iowa Administrative Bulletin on March 20, 2024. A public hearing was held on the following date(s):

●April 9, 2024

Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Authority and advise of specific needs.

ITEM 1.Rescind 265—Chapter 11 and adopt the following new chapter in lieu thereof:

CHAPTER 11

IOWA MAIN STREET LOAN PROGRAM

265—11.1(16) Definitions. As used in connection with the Iowa main street loan program, the following terms have the meanings indicated.

“Authority” means the Iowa finance authority created in Iowa Code section 16.1A.

“Commercial property” means property formerly or currently used primarily for business, retail, governmental or professional purposes.

“Downtown area” means the business area of a community that is centrally located within the community within the context of the Iowa main street program.

“Housing” means the same as defined in Iowa Code section 16.1(14).

“Infill development” means new construction on a vacant commercial lot currently held as open space.

“Participating city” means a city participating in the Iowa main street program.

“Upper floor housing” means any housing that is attached to or contained in the same building as commercial property, whether located on the ground floor behind the traditional storefront or on other floors of the property.

265—11.2(16) Public benefit. Projects are approved for an Iowa main street loan if they demonstrate one of the following public benefits:

1.Rehabilitation of upper floor housing or commercial properties or new construction development on infill vacant lots located in the downtown area of a participating city;

2.Housing in downtown areas located in a participating city; or

3.Stimulation of downtown area economic development within the context of historic preservation of the downtown area in a participating city.

265—11.3(16) Loan terms.

11.3(1) Amount of loans. The principal amount of each loan is between $50,000 and $250,000.

11.3(2) Term of loan. Loans are amortized over not more than 30 years; the actual term of the loan is determined by the authority depending on the economic feasibility of the project.

11.3(3) Interest rate. Interest is charged on the loan at a rate related to the authority’s cost of funds for the loan term as determined and announced by the authority from time to time.

11.3(4) Loan fee. The authority may charge a fee in the amount of 1 percent of the initial loan amount at closing.

These rules are intended to implement Iowa Code sections 16.5(1)“r” and 16.51.