(1) For loans to private applicants the borrower shall provide security which is at least equal to 125% of the principal value of the loan.

(2) Private borrowers shall provide security with:

(a) a first or second real estate mortgage;

(b) an assignment of accounts receivable;

(c) certificates of deposit or similar securities;

(d) a turn off authority; or

(e) other security as accepted by the department.

(3) Private water users association or ditch company borrowers may provide security in the following manner, which may be in addition to any security items listed in (2):

(a) a lien on the shares of stock in the association;

(b) a lien on the revenues of the association;

(c) a lien on the accounts receivable of the association; and/or

(d) a lien on any water purchase agreements of the association.

(4) At the department's request, the private borrower shall also provide an appraisal of the real property used as security for the loan.

(5) A partial release of lien may be granted by the department upon written request of the private borrower if the remaining security is at least equal to 125% of the outstanding principal value of the loan and the department establishes that the loan will remain adequately secured.

(6) The private borrower shall be apprised of state law governing foreclosure on delinquent loans at the time of loan closure.