1. The development and reserve fund shall be used to prevent a default in payment of principal or interest or to defray losses which may be incurred in connection with bonds, notes or loans secured by the development and reserve fund in accordance with the terms and provisions of the resolution or trust indenture of the board authorizing such bonds, notes or loans.

2. Upon certification by a participating lender that a loan secured by the development and reserve fund is in default and noncollectible, and that the property which secured the loan has been liquidated and applied against the debt, and after a review by the board and its determination of the same, the board shall distribute, from funds available in the development and reserve fund, an amount not to exceed ninety percent of the balance remaining to be paid by the borrower to the participating lender. Upon payment to a participating lender to repay any loan, the board shall become subrogated to the extent of such payment to all rights which the participating lender had against the borrower.

Terms Used In Missouri Laws 100.287

  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Property: includes real and personal property. See Missouri Laws 1.020
  • State: when applied to any of the United States, includes the District of Columbia and the territories, and the words "United States" includes such district and territories. See Missouri Laws 1.020

3. A loan or issue of bonds or notes secured by the development and reserve fund shall in no case constitute or be construed as an obligation or an indebtedness of this state or of the board, and neither the state nor the board shall be liable to repay any such loan, bonds or notes upon any condition.

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