MI LLR Illustration.xlsx

This file is an illustration worksheet for a Michigan Loan Loss Reserve (LLR) portfolio mechanism related to an Energy Efficiency Revolving Loan program. The document models the financial performance of a revolving loan fund across six months, tracking four individual loans with a combined principal issuance of $285,000. The illustration demonstrates how the LLR portfolio operates as a risk mitigation tool, with the reserve funded at five percent of outstanding loan principal. The worksheet tracks loan principal balances, reserve additions based on new issuances, reserve reductions corresponding to loan repayments, and loss payments triggered when loans become eligible for assistance.

The illustration shows the mechanics of LLR loss payment calculations, demonstrating that loss payments are limited to the lesser of eighty percent of eligible loan losses or the available LLR balance. In the modeled scenario, Loan 1 becomes more than ninety days delinquent by month five, generating an eligible loan loss of $14,922.49. The LLR loss payment for this loan is calculated at $11,379.92, representing eighty percent of the eligible loss, which is lower than the available LLR balance of $13,899.91 at that time. Following this loss payment in month six, the LLR balance decreases to $2,339.76, illustrating how the reserve depletes as it covers eligible loan losses within the revolving loan program structure.