FUNDS HELD PROGRAM
FCS Financial, ACA
(Unaudited)
The Association offers a Funds Held Program ("Funds Held") that provides for borrowers to make advance payments on designated real estate loans
and intermediate-term loans. The following terms and conditions apply to all Funds Held unless the loan agreement, or related documents, between the
Association and borrower provide for other limitations.
Payment Application
Loan payments received by the Association before the loan has been billed will normally be placed into Funds Held and applied against the next
installment due. Loan payments received after the loan has been billed will be directly applied to the installment due on the loan and related charges, if
any. Funds received in excess of the billed amount will be placed into Funds Held unless the borrower has specified the funds to be applied as a special
prepayment of principal.
When a loan installment becomes due, moneys in Funds Held for the loan will be automatically applied toward the installment on the due date. Any
accrued interest on Funds Held will be applied first. If the balance in Funds Held does not fully satisfy the entire installment, the borrower must pay the
difference by the installment due date.
Account Maximum
The amount in Funds Held may not exceed the lesser of two times the estimated annual payment or the unpaid balance of the related loan(s).
Interest Rate
Interest will accrue on Funds Held at a simple rate of interest that may be changed by the Association from time to time. The interest rate may never
exceed the interest rate charged on the related loan. The interest rate paid is the Federal Funds Target rate plus 0.50%.
Interest rates are currently reported on each borrower’s year end loan statement.
Withdrawals
Money in Funds Held may be withdrawn for the following items, depending on the borrower’s loan program:
Borrowers with real estate loans and intermediate-term loans closed under the loan programs may use Funds Held for future installments,
insurance, or real estate taxes on collateral for the respective loan, as well as for other eligible loan purposes.
Association Options
In the event of default on any loan, or if Funds Held exceeds the maximum limit as established above, or if the Association discontinues its Funds Held
program, the Association may apply funds in the account to the unpaid loan balance and other amounts due, and shall return any excess funds to the
borrowers.
Uninsured Account
Funds Held is not a depository account and is not insured. In the event of Association liquidation, borrowers having balances in Funds Held shall be
notified according to FCA Regulations.
Questions: Please direct any questions regarding Funds Held to your local FCS representative.
Held Program
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