F1-31/95 Repayment of Corporation loans from 31 March 1996

Informs associations of changes to permitted methods of payment.

30 Nov 1995

Distributed to: To all registered housing associations in England with Corporation mortgages

Summary: Informs associations of changes to permitted methods of payment.

1 INTRODUCTION

1.1 The due dates for repayments on all Corporation loans are the 31st March and the 30th September. The Corporation expects that payments should be made on the due date in accordance with the terms of the Agreement and Legal Charge entered into by each association.

1.2 The Corporation is concerned that some associations are making late payments on a regular basis. This has an adverse effect upon the Corporation's loan funding arrangements for these loans. For this reason late payment is not acceptable.

2 PAYMENT BY DIRECT DEBIT

2.1 Payments should be made under the terms of the Agreement and Legal Charge in such a manner as the Corporation may from time to time direct. The Corporation now directs that all associations should make payment by direct debit on the payment dates of 31st March and 30th September in each year, beginning with 31st March 1996.

2.2 Where associations already pay by direct debit the date of the direct debit will be changed by the Corporation to 31st March and 30th September.

2.3 As the 31st March 1996 falls on a weekend, the date of the direct debit will be 1st April 1996, the next working day.

2.4 Associations who do not currently pay by direct debit will be sent a form in December authorising utilisation of the direct debit for their Corporation loan payments. This form should be returned by no later than 31st January 1996 to Steve Preston, Director of Finance, Finance Division, The Housing Corporation, 149 Tottenham Court Road, London W1P OBN.

2.5 Payments by other means than direct debit will no longer be acceptable payment methods under the terms of the Agreement and Legal Charge from and including 31st March 1996.

3 NOTIFICATION OF AMOUNT DUE

3.1 In February 1996 the Corporation will send all associations with repayment accounts statements of all the future repayments of their loans. This will form the basis of future payments and the Corporation will only send out further statements if the loan schedule changes. The Corporation will no longer send out invoices or direct debit notification prior to each payment date.

4 FAILURE TO MAKE PAYMENT ON THE DUE DATE

4.1 The Corporation regards any failure by an association to make payment on the due date as a matter for serious concern. Not only does this breach the association's contractual loan arrangements with the Corporation but it may also trigger cross default provisions in the association's private finance arrangements.

4.2 Any failure by an association to make payment by direct debit as required by this circular may result in the Corporation serving notice of default under the terms of the Agreement and Legal Charge declaring the Corporation loans immediately due and repayable. It is for this reason that associations who need to should return the direct debit form as a matter of urgency.

5 ENQUIRIES

5.1 Any queries concerning this circular should be directed to Steve Preston, Director of Finance, Finance Division, 149 Tottenham Court Road, London W1P 0BN. Tel 0171 393 2220.