§__.12(t) Lost Income from Below Market Loan Rates

§__.12(t) – 6

Q: An institution makes or participates in a community development loan. The institution provided the loan at below-market interest rates or “bought down” the interest rate to the borrower. Is the lost income resulting from the lower interest rate or buy-down a qualified investment?

A6. No. The Agencies will, however, consider the responsiveness, innovativeness, and complexity of the community development loan within the bounds of safe and sound banking practices.

 

Source: Interagency Questions & Answers Regarding Community Reinvestment | July 2016

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