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BTADD LENDING SERVICES
In 1982 ($2.847 million) and 1983 ($12.15 million), BTRHA became the first agency other than the Kentucky Housing Corporation to be successful in issuing tax-free mortgage revenue bonds. The proceeds of the issues were used to make home loans to those who wanted to buy or build a home in the five-county area.
We made over 500 home mortgage loans in less than 4 years. The 1982 and 1983 loans are now paid in full.
In 1982, BTRHA was funded in the amount of $250,000 by ARC and $270,000 by CDBG to make loans to low-income homebuyers to assist in their purchase of a home. Balances in those funds fluctuates, but there is never a lot of money available. As funds come back, we make more loans.
In 1985, BTADD was (in fact, still is) the Program Administrator for the 1985 Kentucky Multi-County Mortgage Revenue Bond Program. This issue involved 53 Counties and the City of Louisville. More than $26 million in home loans were made. All loans received final approval at BTADD before closing.
BTADD staff monitors loans, handles collections and initiates foreclosure actions as a last resort.
HOUSING PROGRAMS OF BUFFALO TRACE ADD AND
THE KENTUCKY HOUSING CORPORATION
BTADD staff makes loans to prospective homebuyers to purchase or build homes or buy manufactured homes in the five-county area through the Kentucky Housing Corporation. A brief description of the Program is as follows:
The CURRENT (January 7, 2010) interest rate is 4.375% for a term of 30 years.
Down payment required is 3% of the sales price.
Closing costs amount to 4% of the purchase price.
Maximum sales price of a home is $258,000, new or existing.
Down payment and closing cost assistance is available from $500 to $2500, based on need.
Maximum family incomes are $63,360 for a 1 or 2-member household and $73,920 for three
members and up in Fleming, Lewis, Mason and Robertson Counties.
In Bracken County the 1-2 member income limit is $83,040 and the 3 plus family limit is
$96,880.
Loans can be insured by HUD or PMI OR guaranteed by VA or RHS.
KHC/ADD's NON-PROFIT HOUSING PRODUCTION LOAN PROGRAM
Beginning with FY98, KHC delivered a pool of funds to participating Area Development
Districts with which to produce units of housing. These funds were divided amongst the ADD's
based on their history of producing housing units. BTADD and Purchase ADD shared the largest
portion of this pool of funds.
These funds may be used to rehab homes, assist with down payment, help pay closing costs, etc.
- anything which assists a low-income family with their housing needs. The maximum assistance
per unit is $10,000.
BUFFALO TRACE ADD BUSINESS LOAN PROGRAMS
BTADD REVOLVING LOAN FUND
In 1979, BTADD was funded by the Economic Development Administration (EDA) in the
amount of $750,000 to make business loans in the Counties of Bracken, Fleming, Lewis and
Robertson. Since that time, Mason County has become eligible for these loans.
An 11-member Revolving Loan Fund Committee makes all decisions regarding loans.
Loans are made to businesses that might otherwise be unable to borrow the necessary funds for
their business. The BTADD/RLF does not compete with our local banks for loans. Whenever
possible, BTADD/RLF will make joint loans with a bank.
The funds may be used for working capital, inventory, equipment purchases and buildings.
Terms of these loans are 3-5 years for working capital and inventory, 5-7 years for equipment
and 7-10 years for land and buildings. Interest rates and repayment terms are established by the
RLF Loan Committee on a case-by-case basis, taking into account the specific needs and ability
to repay of each business.
One full-time job must be created or preserved for every $10,000 in loan amount.
BTADD/RLF RECAPITALIZATION
In 1995, BTADD applied for and was funded for an additional $300,000 from EDA to
supplement the original loan fund. The City of Maysville contributed $100,000 as a match for
these funds.
The same rules apply as apply to the original BTADD Revolving Loan Fund. Total loans are
reflected in the BTADD/RLF section. Both funds operate together.
BTADD EDA/RLF INFRASTRUCTURE LOAN PROGRAM
In July of 1998, the Buffalo Trace Area Development District received funding to establish an
Infrastructure Loan Program. EDA provided $360,000 and BTADD provided a $40,000 match to
establish a $400,000 loan fund. These funds are loaned to local units of government and other
public utilities to help provide low-rate financing for the construction or repair of water lines,
sewer systems, roads, gas lines, etc. These funds are used to leverage other financing and make
projects feasible.
CITY OF MAYSVILLE REVOLVING LOAN FUND
The City of Maysville has established a loan fund for the purpose of making business loans in
the City of Maysville. BTADD staff administers this fund. The same rules apply as to the other
2 RLF funds. BTADD manages this fund for the City of Maysville. This fund and the
BTADD/RLF Recap fund were part of the financing that helped to fund the French Quarter Inn
in downtown Maysville.
BTADD/RURAL DEVELOPMENT INTERMEDIARY RELENDING PROGRAM
In 1985, BTADD was successful in securing funds from the United States Department of
Agriculture, Rural Development in the amount of $500,000. These funds are used to make
business loans in the BTADD Counties. BTADD repays these funds to RD at a 1% rate of
interest, with BTADD earning the interest on loans above the RD rate to BTADD. This gives us
yet another source of funds with which to stimulate economic growth and job creation in our
area.
To date, BTADD/RLF has made 20 loans though this fund, totaling $1.4 million. These loans
have leveraged more than $4 in private sector loans and owner injections.
This fund has been used primarily to assist fire departments.
BUFFALO TRACE AG LOAN PROGRAM
In 2004, Buffalo Trace was awarded a grant in the amount of $1,000,000 from the Kentucky
Master Tobacco Settlement Trust Fund. BTADD used these funds to assist a local manufacturing
company. The repayment of that loan provides funds for this loan fund, which will be used to
make new AG loans in our 5-County area.
SBA MICROLOAN PROGRAM
Buffalo Trace was funded for an SBA Microloan Program in late 2003. This fund is used to
make agriculture-related loans to the farmers in our 5-County area. The maximum available loan
is $35,000 at an interest rate of 5 7/8% interest for a term of 6 years. The match was provided by
a grant from the Kentucky Master Tobacco Settlement Trust Fund.
BUSINESS LOAN APPLICATION PROCESS
Applicants contact the BTADD/RLF - either from word-of- mouth or from bank referrals.
BTADD/RLF staff meet with the potential client to discuss the proposal. Once it is
determined that the proposal is a "doable" deal, the application is completed, a field visit is made to view the business, credit checks are made, etc.. Each applicant must submit a letter detailing how much they want to borrow and telling exactly what the funds will be used for. A financial statement of the individual and the business is required, along with a cash flow projection for 3 years. If a purchase of an existing business is involved, we will request the last 3 years' Schedule C, 1040, federal tax return. We always require personal signatures along with corporate if the business structure is that of a corporation. Husbands and wives both must sign.
Once the application is complete, a meeting is scheduled for BTADD/RLF Loan Committee. This Committee has 11 members from all five counties.
We prefer to make joint loans with the banks.
Minimum loan $5000, maximum loan $250,000. The lowest interest rate we can charge is four percent.
Loan Terms
3 years for working capital; up to 7 years for equipment; 10 years for real estate.
We can defer, but not forgive, interest in an emergency situation.
IF THE CLIENT CAN OBTAIN A LOAN FROM HIS/HER BANK, HE/SHE WILL BE EXPECTED TO DO SO. WE ARE NOT A PRIMARY LENDER. WE ARE A SECONDARY LENDER. WE DO NOT COMPETE WITH THE BANKS FOR BUSINESS.
We have been very involved with the industrial authorities in Bracken, Fleming, Lewis and Mason Counties and we like to use our resources to attract new business to our area.
MOREHEAD STATE UNIVERSITY SMALL BUSINESS DEVELOPMENT CENTER
Since the early-to-mid 1980's, a staff person of MSU's Small Business Development Center
visited our office one day per week to assist area clients with market demand studies, business
plans and other things. That program is funded by the Small Business Administration and MSU.
This is an essential tool in the overall business finance program of BTADD. They do not lend
money, they help clients prepare a package to present to a lender for funding.
Today, the person who represents SBDC is Mike Jackson, who shares office space at the Mason
County Area Chamber of Commerce, 201 East Third Street, Maysville. The phone number is
606-564-5534 inside Mason County or toll-free 888-875-6297.
As stated earlier, one criteria for obtaining a business loan from BTADD is that one job must be
created or retained for every $10,000 borrowed. We do require adequate security as any other
responsible lender would. We require credit reports and personal signatures from all involved
parties. BTADD is NOT a lender of last resort.
BUFFALO TRACE AREA DEVELOPMENT DISTRICT
201 GOVERNMENT STREET, SUITE 300
MAYSVILLE KY 41056
Robert F. Money, Senior Loan Officer bmoney@btadd.com
606-564-6894 MASON COUNTY
800-998-4347 OUTSIDE MASON COUNTY
"EQUAL OPPORTUNITY LENDER"
 Bobby Money - Senior Loan Officer
The Buffalo Trace Area Development District provides services on a non-discriminatory basis.
Reasonable accommodations will be made upon request for those with hearing, visual and all other handicaps.
© 2009 BTADD. All Rights Reserved. All Logos and Trademarks are property of their
respective owners.
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