A. The State Treasurer may accept or reject a rural housing linked deposit loan package or any portion thereof, which has been recommended for approval by the certifying agency based on the State Treasurer's evaluation of the eligible rural housing developer included in the package, and the amount of the package. If the State Treasurer rejects the application, the written notice of rejection shall include reasons for said rejection in a report to the certifying agency. The Treasurer shall also forward a copy of the rejection notice to the lending institution and the borrower. The borrower may be allowed to bring the application into compliance with the State Treasurer's requirements and resubmit the application. If the State Treasurer rejects the application because sufficient funds are not available for a linked deposit, then the completed application may be considered in the order received when funds are once again available subject to a review by the certifying agency and the lending institution. In evaluating the eligible rural housing developers, the State Treasurer shall consider the recommendation of the certifying agency and the economic needs of the area where the business is located.

B. Upon acceptance of the rural housing linked deposit loan package or any portion thereof, the State Treasurer shall notify the certifying agency, the lending institution, and the borrower. Upon acceptance, the State Treasurer may place certificates of deposit with the eligible lending institution at a rate no more than three percent (3%) below current market rates, or may invest in bonds, notes, debentures, or other obligations or securities issued by the federal farm credit bank with respect to the eligible lending institution at a rate no more than three percent (3%) below current market rates. When necessary, the State Treasurer may place certificates of deposit or may invest in such obligations or securities prior to acceptance of a rural housing linked deposit loan package.

C. The eligible lending institution shall enter into a rural housing linked deposit agreement with the State Treasurer, which shall include requirements necessary to implement the purposes of the Oklahoma Rural and Affordable Housing Linked Deposit Program. Such requirements shall include an agreement by the eligible lending institution to lend an amount equal to the rural housing linked deposit to eligible rural housing developers at an interest rate that reflects a percentage-rate reduction below the present borrowing rate applicable to each specific rural housing developer in the accepted loan package that is equal to the percentage-rate reduction below market rates at which the certificates of deposit that constitute the rural housing linked deposit were placed or at which the investments in bonds, notes, debentures or other obligations or securities that constitute the rural housing linked deposit were made. Such requirements shall also reflect the market conditions prevailing in the eligible lending institution's lending area. The agreement shall also include a specification of the period of time in which the lending institution is to lend funds upon the placement of a linked deposit, and shall include provisions for the certificates of deposit to be placed or the investment in bonds, notes, debentures, obligations, or securities to be made for any maturity considered appropriate by the State Treasurer not to exceed two (2) years and may be renewed once for up to an additional year, at the option of the State Treasurer. Interest shall be paid at the times determined by the State Treasurer.

Added by Laws 2002, c. 287, § 7, eff. July 1, 2002.