(1) A financial institution when making a loan to an applicant authorized for
loan consideration by the department, may set the rate of interest on its share
of a loan. The financial institution may charge a fixed or a variable rate on
(2) The department shall
charge a fixed interest rate on its share of a loan. The rate of interest the
department charges on its loan share shall be equal to the federal reserve
discount rate on the day the loan closes.
(3) The effective interest
rate to the applicant will be the weighted average based on the respective prorata
participation of the financial institution and the department.