USDA Rural Development-OR Water and Environmental Program

Oregon Rural Development Water and Environmental Programs

Water and Environmental Program (WEP) Loan Guarantees, Direct Loans and Grants in Oregon

USDA Rural Development's WEP Program (also referred to as the Water and Waste Disposal Program) provides loans, grants and loan guarantees for drinking water, sanitary sewer, solid waste, storm drainage facilities, and water well systems in rural areas and cities and towns of 10,000 or less. Public bodies, non-profit organizations and recognized Indian Tribes may qualify for assistance. The programs also makes grants to nonprofit organizations to provide technical assistance and training to assist rural communities with their water, wastewater, and solid waste problems.

WEP Guaranteed Loans

Purposes: To provide a loan guarantee for the construction or improvement of water and waste disposal projects serving the financially needy communities in rural areas.This purpose is achieved through bolstering the existing private credit structure through the guarantee of quality loans which will provide lasting benefits.The water and waste disposal guarantee loans are to serve a population not in excess of 10,000 in rural areas

Eligibility: Guaranteed loans are made and serviced by lenders such as banks, savings and loan associations, mortgage companies and other eligible lenders under the Guarantee Loan Program. These funds are available to be used by public bodies, non-profit corporations and Indian tribes. To qualify, applicants must be unable to obtain the required credit without the loan guarantee from private, commercial or cooperative sources at reasonable rates and terms. Each borrower must have or will obtain the legal authority necessary to construct, operate and maintain the proposed facility and services. The facilities must be located in a rural area. All facilities financed under this provision shall be for public purposes. Guaranteed loans may be made in combination with direct loans.

Corporations that have been convicted of a felony (or had an officer or agency acting on behalf of the corporation convicted of a felony) within the past 24 months are not eligible. Any Corporation that has any unpaid federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability, is not eligible for financial assistance provided with funds appropriated by the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2012, P.L. No. 112-55.

Terms: The lender will structure repayment as established in the loan agreement between the lender and borrower. Normally, guarantees do not exceed 80 percent of the loan. Interest rates are fixed or variable and are determined by the lender and borrower subject to USDA Rural Development review and approval. The maximum time allowable for final maturity for a guaranteed Water and Waste Disposal loan will be limited to the useful life of the facility, not to exceed 40 years. Balloon payments at the end of the loan are prohibited.

Requirements: The material submitted with the application should include documentation of lender eligibility, an application SF 424.2, two copies of the Preliminary Engineering Report, Environmental Report, population and median household income of the area to be served, audits or financial information for the past three years, evidence of outstanding indebtedness, organizational documents, the applicant's IRS tax identification number, DUNS number, a proposed operating budget, and some certification forms. In addition, the lender should also submit the proposed loan agreement, and financial feasibility analysis and report.

Basic Instruction: RUS Instruction 1779

WEP Direct Loans and Grants

Purposes: To develop water and waste disposal systems in rural areas and towns with a population not in excess of 10,000. The funds are available to public bodies, non-profit corporations and Indian tribes.

Eligibility: To qualify, applicants must be unable to obtain the financing from other sources at rates and terms they can afford and/or their own resources. Funds can be used for construction, land acquisition, legal fees, engineering fees, capitalized interest, equipment, initial operation and maintenance costs, project contingencies, and any other cost that is determined by the Rural Development to be necessary for the completion of the project. Projects must be primarily for the benefit of rural users.

Corporations that have been convicted of a felony (or had an officer or agency acting on behalf of the corporation convicted of a felony) within the past 24 months are not eligible. Any Corporation that has any unpaid federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability, is not eligible for financial assistance provided with funds appropriated by the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2012, P.L. No. 112-55.

Terms: The rates that are used to calculate these loans are subject to change quarterly. Loans are made based on the applicant's authority and the life expectancy of the system's project, which may be up to the maximum of 40 years.

Requirements: The material submitted with the application should include an application SF 424.2, two copies of the Preliminary Engineering Report, Environmental Report, population and median household income of the area to be served, current audits or financial information for the past three years, evidence of outstanding indebtedness, organizational documents, the applicant's IRS tax identification number, DUNS number, a proposed operating budget, and some certification forms. This loan program is based on repayment ability. These loans are calculated on similar systems rates, median household income, financial status of the system, and outstanding indebtedness. There are some systems that qualify for grant funding; however, grant funding availability is limited. Applicant contributions show ownership in the projects and are often recommended. These applicant contributions are the first money spent in any project.

Basic Instruction: RUS Instruction 1780