Any loan made pursuant to the provisions of § 10.1-638 A may be made for any period not to exceed twenty years and shall bear interest at the rate of one percent annually for the first ten years or until such time as water stored under the provisions of this article is used by the borrower for the purpose stated in the application for the loan, if such use occurs within the first ten years. Interest on the loan for the second ten-year period plus the balance of the first ten-year period during which water was used, if any, shall bear interest at a rate set jointly by the Board and the State Treasury Board. Such interest rate shall conform as nearly as possible to the interest on bonds sold for water development or similar purposes within the Commonwealth within the last six months prior to setting such interest rate, taking into consideration any fluctuations of the money market which may have occurred subsequent to the last sale of such bonds within the six-month period. If no such bonds have been sold within the six-month period, the interest rate shall be set to conform as nearly as possible with the rate charged by the commercial money market for such or similar purposes. However, when the attendant facilities, such as but not limited to a filtration plant, pumping station, and pipelines, necessary for the use of the water stored cost the borrower more than $100,000, interest on the loan for the second ten-year period or the ten-year period plus the balance of the first ten-year period during which water was used, if any, shall be at the rate of three percent annually. Any borrower receiving a loan under the provisions of this article shall agree to repay the loan in equal annual installments of principal together with interest at the applicable rate on the unpaid balance of the loan. Payments of interest and principal shall be made to the State Treasurer and credited to the revolving fund, and evidence of debt taken for such loan shall be deposited with the State Treasurer and kept by him. Whenever a loan is made in accordance with the provisions of this article, a lien is hereby created against all of the funds and income of the borrower, as well as upon any real or personal property acquired with loan proceeds. Prepayment of the principal of any such loan, in whole or in part, may be made by the borrower without penalty; however, the borrower shall be liable for interest accrued on the principal at the time of prepayment.