Water and Waste Disposal 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
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.
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
Where to apply: Applications are accepted at any time through our Rural Development State and Area Offices. To locate an office near you go to http://www.rurdev.usda.gov/recd_map.html