Implementing Loan Loss Reserve Fund Agreements
Implementation of a loan loss reserve fund (LRF) program typically involves two agreements:
The LRF Agreement between the financial institution partner(s) and the American Recovery and Reinvestment Act (ARRA) grantee, which addresses the deposit and use of the LRF monies
A less formal energy efficiency loan program agreement between the financial institution partner and the ARRA grantee and/or other program partners, which addresses the full energy efficiency loan origination cycle, including cooperation in loan marketing, credit screening and analysis, and other steps involved in loan origination, as well as marketing and reporting responsibilities.
The typical LRF structure is illustrated in the figure below.