No Second Loans Where Default in Prior Loan Within the Last Five Years Second Loans with Adequate
If you have previously defaulted on a loan in the past, the current rule requires that you must wait five (5) years from the date of default before you are again eligible for a loan.
Once the five (5) year period expires, you can apply for another loan provided you comply with the current IRS regulations. Effective January 1, 2004, IRS regulations require that you provide the Fund office with “adequate security” to secure that second loan. The “adequate security” cannot be the remaining balance in your account. Whether the security you offer is adequate will be determined on a case by case basis by your Fund office in accordance with IRS regulations.
If you are offering real property as your adequate security, then you must submit a current appraisal by a licensed appraiser and a current title search paid for by you with your loan application. In the event the Fund incurs legal fees and costs exceeding $500 for preparation of note, amortization schedule, mortgage, review of appraisal and title search, you will be required to pay for legal fees and filing fees in excess of $500. Please allow one month from the Fund’s receipt of your loan application and offered collateral for processing your loan.
For other existing requirements for loans, please see your Annuity Plan and Summary Plan Description or call the Fund office.