Government Shutdown Loan Guarantee Program

The program provides a state‑backed guarantee on certain loans issued by participating Maine financial institutions to federal or state employees who are furloughed or required to work without pay during a government shutdown.

FAME does not lend directly to individuals. Loans are issued by participating banks and credit unions.

An eligible financial institution is a bank or credit union in good standing that is insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).

Financial institutions must submit an application to the Bureau of Financial Institutions, which determines eligibility. Once approved, institutions may begin issuing loans under the program.

Financial institutions apply to the Bureau of Financial Institutions. Once approved, institutions may issue loans during an eligible shutdown period and must notify FAME within five (5) business days of each loan using the required reporting process.

An eligible affected employee:

• Is a Maine resident who is employed by a federal or state agency;
• Is furloughed without pay or required to work without pay during a government shutdown;
• Provides proof of employment, income, and Maine residency; and
• Submits a sworn affidavit confirming eligibility.

Eligibility is not dependent on:

• Applying for unemployment compensation;
• A credit check;
• Membership at, or prior customer status with, a particular financial institution; or
• The ability to appear in person, provided the employee can verify Maine residency and eligibility.

No. An eligible financial institution may not use an affected employee’s creditworthiness as a factor when determining eligibility for a loan under this program.

• Loan amount: The lesser of the employee’s most recent monthly after‑tax pay or $6,000, reduced by four times any weekly unemployment benefits received or eligible to be received during the shutdown.
• Interest: No interest is charged during the grace period or for 180 days after.
• Fees: A loan agreement may include an origination fee not to exceed the lesser of $60 or 1% of the loan amount. If included, the fee is added to the loan amount.
• Repayment: Repayment must be completed within 180 days following the grace period, in three to six equal installments.

The grace period begins when the loan is disbursed and ends on the later of:

• Ninety (90) days after loan disbursement, or
• The end of the government shutdown during which the loan was made.

Yes. One additional loan may be issued for each 30‑day period beyond the first, up to a maximum of three loans per shutdown. Updated documentation is required for each loan.

No. Loan applications and approvals must occur during the shutdown period.

Between 180 and 300 days after the grace period ends, a participating financial institution that has made a good‑faith effort to collect may file a claim with FAME for the outstanding principal.

Approved claims are submitted to the Treasurer of State for payment. Once payment is received, FAME pays the lender the approved claim amount, subject to statutory limits and available funds.

The Government Shutdown Loan Guarantee Program Fund currently has a funded allocation of $500,000.

Total guarantee payments under the program are limited by statute. If guarantee payments reach 50% of the total amount of all loans issued, FAME must cease approving claims and notify participating financial institutions and the Treasurer of State.

State law also requires FAME to notify the Treasurer of State and the Legislature if program claims reach specified thresholds, allowing policymakers to evaluate future funding needs.

Deferred or uncharged interest under this program is exempt from Maine state taxes. Participating financial institutions must inform borrowers of any potential federal tax consequences.

For additional questions about the Government Shutdown Loan Guarantee Program, please contact support@FAMEmaine.com.