LOAN APPLICATION

							LOAN APPLICATION
(PLEASE PRINT)

Participant Name: Street Address: City: Company Name:

SSN:

State: _____________ZIP:

SECTION 1 - REQUIREMENTS FOR PLAN LOANS TO PARTICIPANTS
Eligibility The plan must allow for loans, and loans must be available to all participants on a reasonably equivalent basis and not discriminate in favor of highly compensated employees. Ask your employer if your plan only allows participant loans in cases of financial hardship. If your plan has a financial hardship provision, you must attach a statement to this application describing your hardship. If you currently have an outstanding loan from the plan, you should also ask your employer if your plan allows you to take an additional loan. Loan Amount A loan cannot be greater than 50% of your vested account balance. In addition, the loan cannot exceed $50,000, reduced by your highest outstanding loan balance during the 12 months prior to the date of this loan. Existing loans, prior loans, and newly requested loans are combined when calculating this limit. Minimum Amount available is $1,000.00. Maximum Loan Term Generally, loans must be repaid within 5 years. This period may be longer only if the loan is used by the participant to purchase a principal residence. Payments The loan must be repaid with level amortized payments, through payroll withholding. If your loan application is approved, you will be provided with an amortization schedule. Interest Rate The interest rate is stated in the plan’s loan procedures. This interest rate should be comparable to the current interest rates charged by financial institutions for similar loans. . Interest Deductibility Generally, interest on loans is not deductible. Collateral The loan must be secured. If vested account is to be pledged as collateral, you may use up to 50% of your account as security. Additionally, if your vested interest is used as security, you must obtain written spousal consent prior to taking the loan. This consent must be obtained, even if your spouse is not your designated plan beneficiary. Default If loan payments are not made when due, the loan will be in default and the entire outstanding loan balance, including accrued but unpaid interest will be considered a taxable distribution to you. You will receive a 1099-R for the entire amount, which means the entire amount must be included in your gross income in the calendar year of default. Interest continues to accrue on the outstanding loan balance from the date of default until the entire outstanding loan balance plus interest is repaid in full (even if you default on the loan, the loan must be repaid) or until you terminate service with your employer, and the Plan offsets the outstanding loan balance plus interest against your account balance. Any Participant who is in default on a loan from the Plan shall not be eligible to receive an additional loan from the Plan. Fees You will be charged a one-time fee of $75.00 to calculate and process your loan application. You will also be charged an annual maintenance fee of $75.00 for each year of your loan (for example, the maintenance fee on a three year loan would be $225.00). The one time fee and the annual maintenance fees are due and payable at the time of your application for a loan. You must attach a check for the appropriate amount to this application in order for the process to begin. Make your check payable to Cremen, Clements and Associates Pension Administration, Inc.

Applications without appropriate fees will not be processed until the appropriate fees are received.

SECTION 2 – LOAN APPLICATION
Participant MUST Complete A through E Below
A. Loan Amount (Check One) $ (Fill in a dollar amount not to exceed the lesser of $50,000 or 50% of your

vested account balance. Minimum amount $1,000.00)

The maximum non-taxable amount available The loan proceeds should be obtained from the sale, liquidation or withdrawal of monies from my assets(s) under the plan. B. Loan Terms (Complete 1 and 2) 1. Loan Term years (Fill In a Number) __________Payment Start Date (to coincide with payroll) . Note: The loan term

can only exceed 5 years if the loan proceeds will be used to purchase a principal residence of the participant (if so, complete the Loan Use Certification below).
2.

Loan Use Certification - I hereby certify that this loan will be used to purchase a primary residence. The loan will be repaid in level amortized payments within the time period specified above, not to exceed my Normal Retirement Age (as defined in the plan document). Attached is a copy of the application for Mortgage Loan. Signed: Participant Date:

3.

Repayment Schedule - If my loan is approved by the Trustees, I hereby agree that I will repay the loan in installments each payroll period through payroll deduction. I further understand that the Plan will charge me a reasonable rate of interest on my loan (in accordance with the Participant Loan Program).

C.

Participant Agreement

I agree to make interest and principal payments when due. I understand that failure to make such payments when due could jeopardize the status of this loan as a non-taxable transaction and could possibly result in the IRS treating these loan proceeds as a taxable distribution to me. I also understand that failure to repay this loan will reduce the benefits available to me from the retirement plan (by the amount of the outstanding loan balance plus accrued interest). Signed: Participant D. LOAN CALCULATION AND PROCESSING FEE I understand that I will be charged $75.00 for the calculation and processing of my loan and a fee of $75.00 per year for maintenance for the length of the loan. (See Fees under Section 1) Attached is my check for the total fee made payable to Cremen, Clements and Associates Pension Administration, Inc. Attached is my check for the total fee made payable to Cremen, Clements and Associates Pension Administration, Inc. I would like to be reimbursed for this fee by making it a part of the total loan. (The loan check that you receive will be the total amount of the loan plus the loan fee.) (Total amount of loan plus the fees cannot exceed your loan limits under Date:

the plan).
Signed: E.

Participant

Date:

Marital Status and Spousal Information 1. Marital Status (Check One) Note: If you are in the process of a divorce, you are still considered married. I am single. (Stop here. Return form to employer for completion of Section 4.) I am married. (Continue to E. 2. below.) 2. Spousal Information (Married Participants Must Check One) My spouse consents to this loan. (If checked; your spouse must complete Section 3.) My spouse cannot be located. (Stop here. Return form to employer.) My spouse and I are legally separated and I have a court order to that effect. Note: A qualified domestic relations order may require you to obtain your spouse's consent (Stop here. Return form to employer.) My spouse has abandoned me and I have a court order to that effect. (Stop here. Return form to employer.)

SECTION 3 - SPOUSAL CONSENT
Spouse MUST Sign Consent - Signature Must Be Notarized A. Spousal Consent I have been informed that this loan is secured by my spouse's vested accrued benefit under the plan. I realize that a failure to repay the loan may reduce the benefits available to my spouse and me upon my spouse's retirement or other termination of employment. Knowing this, I voluntary consent to the loan of plan assets to my spouse according to the terms of the Loan Application. I agree to release and discharge the Trustee, Plan Administrator and Company from all liability for acting pursuant to this consent. Signed: B. Spouse Date:

Witness By Notary Public STATE OF:___________________________ COUNTY OF:______________________________ BEFORE ME, the undersigned authority, a Notary Public in and for said County and State, on this day personally appeared ____________________________________________ and __________________________________, known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledge that they have signed said Waiver as their free and voluntary act for the uses and purposes therein set forth. GIVEN UNDER MY HAND AND SEAL this _____day of ___________________, 20_____. ____________________________________________________ Notary Public ___________________________________________________ Date Commission Expires

SECTION 4 - LOAN AUTHORIZATION
The Trustee is hereby authorized to make the loan as requested to the participant. The payroll frequency is as follows (Choose One) Weekly Bi-Weekly Semi-Monthly Monthly Other (Please Specify Signed: Authorized Plan Representative --------------------------------------------------------------------------------------------------------------------------------------------RETURN THE COMPLETED APPLICATION TO: CREMEN, CLEMENTS AND ASSOCIATES PENSION ADMINISTRATION, INC. 10111 Martin Luther King, Jr. Highway, #109 Bowie, MD 20720-4207 Telephone: 301-459-9555 Fax: 301-459-3487 When the completed application (including appropriate fees) is received by Cremen, Clements and Associates Pension Administration, Inc., an Amortization Schedule will be sent to you along with the Promissory note. You must execute and return the Promissory Note. Upon return of the completed Promissory Note your loan will be processed.

) Date: