Information About the Loan Application Process
The availability of funds for new Loans is often limited. Any local government or authority that contemplates a Loan from DelVal should contact the Program Administrator and should submit an application. The submission of an application is not binding on either DelVal or the prospective borrower.
The DelVal Loan process begins with the submission of an application. The Loan must be approved by the Program Administrator and the DelVal Board of Directors. Following those approvals, the borrower would enact an ordinance (or for Authorities and School Districts adopt a resolution) to authorize the Loan. The closing of the Loan typically occurs 8-12 weeks after the application is submitted.
The borrower is obligated to pay DelVal's costs to originate the Loan; the origination fees equal 0.50% of the Loan principal. DelVal assumes responsibility for the preparation of the following:
- Ordinance (or Resolution) to authorize the issuance of debt,
- Ordinance for a guaranty of lease rental debt (if applicable),
- Advertisements of consideration and enactment (or adoption),
- Application to the Department of Community and Economic Development ("DCED") for approval of the new debt or guaranty,
- Opinion of bond counsel, and
- Loan Closing Documents (principally the Loan Agreement, Note, Tax Compliance Agreement, Continuing Disclosure Agreement, and related certificates).
If the borrower does not have a published rating and the permanent financing portion of the loan exceeds $1 million, the Program Administrator will require the borrower to secure a published rating or bond insurance for the Loan. In this event, the Program Administrator will provide the rating agency or bond insurer with the information prepared for DelVal's credit review. In addition to DelVal's origination fee, the borrower will be responsible for the rating fee or insurance premium (if either is required), newspaper advertisements, the DCED application fee, its solicitor's fees, and the fees of any consultants that represent it. The total costs of issuance are generally less than half the costs of a public sale of bonds.
The applications for the various types of political subdivisions are posted at the URL below, "Applications for Prospective Borrowers". The appropriate Word and Excel files should be submitted to the Program Administrator. Current rates can be found on the "Home" webpage. Please contact the Program Administrator (See contact information in the footer of this webpage.) for additional information and for pro forma debt service schedules.