The MCRF provides medium term loans for communities recovering from emergency weather events.
The program is designed to provide municipal budgetary relief in the flood recovery effort by lowering the costs of borrowing to bridge FEMA reimbursement or otherwise pay for the many unexpected costs.
The MCRF is funded in partnership with the Vermont State Treasurer’s Office that is providing the Vermont Bond Bank (Bond Bank) with a $20 million loan through the 2.5% in Vermont Program. The Bond Bank is relying on this source to make MCRF loans to Vermont municipalities.
Timeline
The Bond Bank will announce solicitation periods following disasters or as funds become availible.
Process for Allocation
To the extent applications for funding are in excess of available funds, the following allocation methodology will be used to prioritize applications:
Disaster Impact Ratio = (Documented losses – expected insurance payouts + own source revenue loss) / Grand List
Loan Specs/FAQs
- Eligible borrowers are governmental units including: cities, towns, schools, villages and various districts
- Federal, state, or local disaster (or emergency) declaration
- Legal opinion from local bond counsel
- Financial statement
- Disaster inventory
- Summary of expected insurance losses
- Expected revenue loss as applicable
Program funds to be used for the payoff of prior borrowing and/or interfund loans as well as reimbursement of emergency related expenses
| Loan Amount | Subject to availability |
| Term | Up to 5 years with interest only for first 2 years |
| Interest Rate | Based on cost of funds; < 3.5% |
| Closing Costs | None |
| Payment Dates | Semi-annual on March 1 and September 1 |
| Drawdown Period | Fully funded at closing unless authorized by special request |
| Prepayment | At any time with no penalty |
| Requisition of Funds | Certified requisitions with supporting documentation of emergency related expenses |
| Security | General obligation |
| Legal | Local bond counsel opinion |
| Environmental | No programmatic requirement other than borrower's adherence to state law |
| Covenants |
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| Credit / Underwriting | Bond Bank undertakes credit review followed by board approval prior to issuing loan |
| Other | None |
Approved Loan Bond Counsels
Local bond counsel serves a critical role in confirming the legality of our borrower’s debt issuance. Early engagement of local counsel will ensure that they will be able to provide a preliminary legal opinion alongside a loan application to the Bond Bank. Legal opinions for the Bond Bank require specialized firms that must first be pre-approved.
