Twice a year (generally in the Spring & Fall following the Annual General Meeting and Semi-Annual respectively) the MFA will fund the loan requests of clients which have been vetted through all appropriate approval processes. Dates for regional district submission of loans requests are typically one month prior to the Annual General Meeting and Semi-Annual meeting.
Once a loan has been approved, clients can generally expect funding to occur in April for the Spring Issue or October for the Fall Issue. On occasion, the funding date may vary so please monitor the website for updates. If funds are required prior to issuance, please access our Short Term Borrowing page. The MFA will determine the exact date of funding as it monitors the capital market for the best interest rates available.
Proceeds on a loan request will be 98.40% of the gross amount of the loan. 1.00% is deducted by the MFA for security against loan default (this is held in trust by the MFA in its Debt Reserve Fund* and will be refunded to clients, with interest, at loan expiry). The other 0.60% is deducted as issue expenses to cover the costs of raising money - Bank Syndicate costs.
Each new issue will generally be for a 10 year term, which means the lending rate will be set from the date of funding for a period of 10 years. Members have the option to borrow for periods ranging from of 5 to 30 years, therefore, any terms that exceed the 10 year period will have the lending rate reset starting in year 11. Typically, the rate will be reset for the next 5 years covering the start of year 11 to the end of year 15, and this '5 year reset process' will continue as required (i.e. until loan obligations mature). Interest payments will be required semi-annually; with the first interest payment being 6 months after proceeds are received. Interest costs over the life of the loan are based on the original amount borrowed.