What's Involved In The Loan Closing Process?

About two weeks prior to your scheduled EIF loan closing, your municipality must hold a meeting at which you will execute your FAA and documents prepared by your bond counsel to issue a tax-exempt bond/note to the EIF as security on the loan. This issuance mirrors the process municipalities must follow for any issuance of debt, either in the public or private markets. The EIF has made this process easier.

Note: For a General Obligation pledge, there must be 2 meetings, one of which is an initial resolution held at least 30 days prior to the loan closing.

When all of the pre-FAA requirements are met, your project manager will work with you to establish a loan closing date. This date is normally the second or fourth Wednesday of the month. Once we establish this date, we can prepare a loan-closing schedule.

Here is a listing of steps in the loan closing process:

1. project manager schedules loan closing and prepares the financial assistance agreement (FAA)

2. bond counsel or local attorney prepares bond resolution and closing documents

3. project manager routes FAA internally for approvals and sends to municipality and bond counsel or local attorney

4. municipality submits first payment (disbursement) request

5. project manager/financial specialist reviews request and submits to DOA for payment

6. municipality signs FAA and other closing documents and returns FAA to DNR

7. loan closes
   • loan must close within 8 months of an application acceptance letter for CWFP

   • loan must close prior to April 30 of the year following an application for SDWLP

   • loan must close within 12 months of funding allocation for LRL

   • municipality receives first disbursement

Additional Information

• When and how are the funds disbursed?
• When and how is a loan repaid?
• What is a project close-out?