Interest Rate Information for Lenders
The interest rate for the deposit with the lender providing a Missouri FIRST loan is based on a formula set by state law. The interest rate is set off of the Market Rate, which is computed based on the average CD rate quoted by Missouri lenders for the comparable term. When the Market Rate is above 5%, the Missouri State Treasurer’s Office may reduce the yield on the deposit to the lender by as much as 3%. When the Market Rate is below 5%, the Treasurer may multiply the rate by as much as 60%.
To calculate interest due please download the Linked Deposit Data Summary Spreadsheet.
State law requires that the amount of the interest rate reduction must be passed on to the loan applicant for a Missouri Linked Deposit Program loan.
Interest Rate on Loans
The loan rate is set based on a certification by the lender of the normal lending rate that would have been offered to the applicant. This lending rate is multiplied by 70% to determine the new loan-ceiling rate for the linked deposit loan applicant.
Interest Owed for Early Principal Payments or Other Situations
The below-market interest rates described above apply only to the amount actually placed with a borrower. For lines of credit or other types of loans, in which the amount of funds actually placed and being used by the client may be less than the amount of the Missouri Linked Deposit Program loan, the lender shall pay the state the usual Market Rate on any portion of a deposit held for any period when there is no corresponding Missouri Linked Deposit Program loan outstanding. Such a situation may arise as the applicant makes principal payments, for instance.
At the anniversary date of each Missouri Linked Deposit Program loan, the lender is required to calculate the loan dollar days for each loan by completing a "Deposit Data Summary" report. Any interest due to the state at the usual market rate is then required to be remitted. A spreadsheet, which can be used to track any interest due, can be downloaded below. Please click here for the actual interest rate factor.