Last year, FAME embarked on a collaborative process with its lender partners to discover what programs and enhancements would help them better serve their customers - Maine businesses. The results of that work are three new enhancements to FAME's loan insurance programs that help lenders obtain loan insurance decisions faster, more easily and at a lower cost.
- NEW 3 and 5-year fee options for term loan insurance;
- NEW 3-year fee option for line of credit loan insurance;
- Leveraged insurance in the OnLine Answer (OLA) application process.
Commercial Loan Insurance Now Available in One, Three and Five Year Fee Options
The lender can choose the amount of time they want to insure a loan, and pay the fees once, up-front for these multiple year options. FAME has historically only offered an annual insurance fee paid at each renewal. As of November 1, 2016, FAME is adding three- or five-year options for term loan insurance and a three year option for insurance on lines of credit. These options are available for insurance offered both through the traditional and OLA application processes. Fees for multi-year options are offered at a discount to the annual option. The lending institution may add these fees to the principal amount of the loan, at the time of loan closing, if desired.
Over the years, lenders have told FAME that they experience challenges approaching the borrower each year for FAME's annual fee; these mult0year options can eliminate this challenge. It should be noted that once the multi-year term is over, the insurance will automatically continue on an annual basis unless the insurance is canceled or the lender reapplies for an additional multi-year term.
See FAME Loan Insurance Fee Schedule below for further information.
Leveraged Insurance Option Now Available for OnLine Answer (OLA)
Since its inception in 2006, only pro-rata insurance has been available through OLA. Starting November 1, 2016 lenders can apply for leveraged loan insurance on term loans up to 25% of the original loan balance (20% on lines of credit) up to $250,000 of FAME exposure.
FAME's aggregate exposure per borrower in OLA will continue to be $375,000. This can be a combination of pro-rata and leveraged insurance with a $250,000 limit on leveraged insurance.
Please contact a FAME loan officer or visit
www.FAMEmaine.com/business for assistance determining whether leveraged or pro-rata insurance is right for you.
FAME Loan Insurance Fee Schedule
Loan insurance fees stated below are calculated on the portion of FAME exposure, not the loan amount. (fees as of 11/1/2016)
|
FAME Exposure
|
Commitment Fee
|
Annual Insurance Fee
|
New 3-Year Insurance Fee
|
New 5-Year Insurance Fee
|
OLA Leveraged Term
|
≤$250M
|
0.5%*
|
2%
|
5.75%
|
7.95%
|
|
OLA Leveraged Line
|
≤$250M
|
0.5%*
|
2%
|
5.75%
|
NA
|
OLA Pro-rata Term
|
≤$375M
|
0.5%*
|
1%
|
2.75%
|
3.95%
|
|
OLA Pro-rata
Line
|
≤$375M
|
0.5%*
|
1%
|
2.75%
|
NA
|
Leveraged Term
|
≤$1MM
|
1%
|
2%
|
5.75%
|
7.95%
|
Leveraged Line
|
<$500M
|
1%
|
2%
|
5.75%
|
NA
|
Pro-rata Term
|
<$1MM
|
1%
|
1%
|
2.75%
|
3.95%
|
Pro-rata Line
|
≤$1MM
|
1%
|
1%
|
2.75%
|
NA
|
Pro-rata Term
|
≥$1MM**
|
1%
|
1.25%
|
3.5%
|
4.95%
|
*The commitment fee will be waived on loan applications processed via OLA until 3/31/2017.
**An application fee of 1% of the requested FAME exposure is due with the application for loans equal to or exceeding $1,000,000. If the request is denied, this fee may be partially refundable after deducting FAME's underwriting and processing expenses. If approved, the application fee will be applied to the commitment fee.
