A. The division shall administer a program to make direct loans or loan subsidies and shall contract with one or more lending institutions for deposits to be used for the purpose of making or subsidizing loans to property owners for the restoration, rehabilitation or repair of eligible properties.

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B. The committee shall adopt a procedure for the priority ranking of applications and projects, both eligible and ineligible for federal funding assistance, for which loan or loan subsidy applications have been received by the division. The procedure shall be based on factors including geographic distribution of recipient projects, severity of deterioration of the eligible property, degree of architectural and construction detail in the loan application demonstrating the feasibility of the proposed restoration, rehabilitation or repair of the eligible property and availability of other funding for the project. All loans or loan subsidies from the fund shall be granted pursuant to the procedure, and the procedure shall be reviewed annually by the division and the committee.

C. Loans or loan subsidies shall be made by the committee pursuant to the following criteria:

(1)     loans or loan subsidies from the fund shall be made only to property owners who:

(a) agree to repay the loan in a time period not to exceed ten years; (b) agree to maintain the eligible property as restored, rehabilitated or

repaired for the period specified in the loan or five years, whichever is greater;

(c) agree to maintain complete and proper financial records regarding the eligible property and to make these available to the division and the committee on request;

(d) agree to complete the proposed restoration, rehabilitation or repair work on the eligible property within twenty-four months from the date of loan approval by the committee;

(e) provide sufficient collateral security interest, as determined by the lending institution, to the state in accordance with rules established by the committee;

(f) submit conceptual design and business plans with respect to the use of the loan proceeds, prepared with the assistance of the local main street project organization, the state main street program or other professionals with experience in architecture, design or business and financial planning;

(g) agree to all financial and other commitments, terms and conditions for the loan established by the division or the committee; and

(h) agree to any restrictions on assignments of loans from the fund required by the committee or the division;

(2)     a loan shall be made for a period not to exceed ten years with interest on the unpaid balance at a rate not greater than the yield at the time of loan approval on United States treasury bills with a maturity of three hundred sixty-five days plus one-half of one percent. A loan shall be repaid by the property owner in equal installments not less often than annually with the first installment due within one year of the date the loan is issued. If a property owner transfers ownership of the eligible property with respect to which a loan is made, all amounts outstanding under the loan shall become immediately due and payable and the property owner shall make a final interest payment on the principal amount due at a rate equal to the interest rate on the loan plus an additional one percent;

(3)     loans shall be made only for eligible costs. Eligible costs include loan servicing fees, architectural, design, graphic design, construction and engineering documents and planning costs, inspection of work in progress, contracted restoration, rehabilitation and repair costs and costs necessary to meet code requirements. Eligible costs do not include costs of land acquisition, legal costs or certain fiscal agents’ fees as determined by the committee; and

(4)     loans are not assignable.

D. The division shall deposit in the fund all receipts from the repayment of loans made pursuant to the Main Street Revolving Loan Act.