Note 7 Loans Receivable
Loans receivable for the primary government and its component units, as of June 30, 2002, consisted of the following (amounts in thousands):
| Primary Government | |||
|---|---|---|---|
| Governmental | Business-Type | Component | |
| Activities | Activities | Units | |
| Mortgage | $ - | $ - | $ 2,918,424 |
| Industrial | - | - | 116,947 |
| Housing | 202,535 | - | - |
| Clean Water | 51,076 | 468,589 | - |
| Education | - | 20,340 | 80,135 |
| Other | 161,705 | 18,673 | - |
| Less Allowance for Losses | (9,044) | (2,559) | (46,798) |
| Loans Receivable Net | $ 406,272 | $505,043 | $ 3,068,708 |
The mortgage loan program consists of home, multi-family, and construction loan mortgages made by the Connecticut Housing Finance Authority. Most home loans are insured by the Federal Housing Administration or guaranteed by the Veterans Administration. In addition, some home and multi-family loans are insured or guaranteed by private insurers, and the State has guaranteed the repayment of up to $5 million for the Authority's Residential Mortgage Guarantee Program. Permanent loans earn interest at rates ranging from 0 percent to 13.5 percent and have initial terms of 10 to 40 years. Construction loans earn interest at rates ranging from 0 percent to 9.0 percent. Upon completion of each development, the related permanent mortgage loan, which will generally be provided by the Authority, will be payable over 30 to 40 years at annual interest rates ranging from 0 percent to 9.0 percent.
The Clean Water fund loans funds to qualified municipalities for planning, design, and construction of water quality projects. These loans are payable over a 20 year period at an annual interest rate of 2 percent and are secured by the full faith and credit or revenue pledges of the municipalities, or both.
The industrial loan program consists of loans made by the Connecticut Development Authority to finance the purchase of land, buildings, and equipment by qualified applicants and to finance other economic development programs of the Authority. These loans are collateralized by assets acquired from the proceeds of the related insurance fund created by the Authority and by the faith and credit pledged by the State. This insurance fund had net assets of $7.9 million at year-end. Thus, the State is contingently liable in the event of any defaulted loans that could not be paid out of the assets of the insurance fund.