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Rural Development is
a mission area of the United States Department of Agriculture that
provides
Guaranteed and Direct Loans and Grants through the Rural
Utilities Program for water, wastewater, and solid waste
projects.
Qualifications:
Rural communities and small incorporated towns/cities with
populations of 10,000 or less based on the latest decennial Census of
the United States are eligible to apply.
Applicants must be unable to obtain the financing from
other sources and/or their own recourses at reasonable rates and terms.
Public bodies and nonprofit corporations can be eligible applicants.
Use:
Funds can be used for construction, land acquisition, legal fees,
engineering fees, capitalized interest, equipment, initial operation and
maintenance costs, project contingencies, and other cost that is
determined by Rural Development to be necessary for the completion of
the project.
Projects must be primarily for the benefit of rural users.
How to Apply:
Applications should be made at the Rural Development Area Office.
The
Area Office staff will be glad to discuss services available from the
Rural Utilities Service and explain how to prepare a written
application.
Scroll down for more
information
To
find the Area Office serving your County
click
here
Direct Loans
Market Rate - Available to applicants whose Median Household Income
(MHI)
for their service area is greater than the non-metropolitan MHI of
Florida ($39,730).
Intermediate Rate - Available to applicants whose MHI is not more than the non-metropolitan MHI ($39,730) of Florida and who otherwise do not qualify for the poverty rate.
Poverty Rate - Available to applicants whose MHI is below the latest
established nationwide poverty level (MHI) of Florida (80% of $39,730 =
$31,784) and there are existing health/sanitation conditions that would
be alleviated with the proposed project so as to comply with regulatory
agencies’ established standards
Guaranteed Loans
As
negotiated by private lender and applicant and determined by RUS to be
reasonable. May be fixed or variable rate.
Rates
-
are subject to change
quarterly (January 1, April 1, July 1, and October 1). The market rate
is based on the performance of the Bond Buyer Index. The poverty rate
has been set at 4.5%. The intermediate rate is set halfway between the
poverty and market rates but not to exceed 7%. Rates are fixed and the
maximum rate is established at the time the loan is approved. If rates
drop by the time the loan is closed, the applicant is afforded the
opportunity to receive the lower rate.
Repayment Terms
- Up to 40 years for both
direct and guaranteed loans based on the applicant’s authority and the
useful life expectancy of the system.
Security - Guaranteed
and Direct Loans
Public Bodies
- Revenue Bonds, General
Obligation Bonds, Special Assessment Bonds, Non-Profit Corporations -
Promissory Notes, Real Estate Mortgages, Financing Statements, Security
Agreements. Obligations that secure a guaranteed loan must be taxable.
Solid waste loans will be secured by a pledge of solid waste disposal revenue only when the revenue pledged includes that from solid waste plus revenue from other facilities of the applicant with tie-in enforcement rights, or by the taxing power of a participating local government.
Maximum Amounts
Direct
loans - may be obtained for 100 percent of eligible project costs subject
to adequate security, ability to repay, applicant’s authority to
borrow and availability of funds.
Guaranteed Loans - Same as for direct loans as determined by the private lender and approved by RUS. However, the Rural Development guarantee cannot exceed 90% of the loan, with the norm being 80%.
Grants - Grants are used to supplement direct loans for the purpose of reducing user charge for the facility to a reasonable level when compared to comparable systems and similar size communities with similar economic and income conditions.
Maximum Grants
Up to 75% of eligible project costs for
applicants whose MHI is below the latest established nationwide poverty
level ($18,550) or below 80% of the non-metropolitan MHI of Florida (80%
of $39,730 = $31,784) and the project is needed to correct health and
sanitation problems.
Up to 45% of eligible project costs for applicants who do not qualify for the 75% category and their MHI is not greater than the non-metropolitan MHI of Florida ($39,730) Applicants with MHI in excess of the above criteria would qualify for no grant consideration.
The actual amount of grant funds awarded to the applicant will be determined based on the grant dollars required to reduce the user rates for users to a reasonable level up to the maximum amount of 45% or 75%
Grant funds cannot be used to pay project costs related to interest, refinancing, purchase of existing systems, and initial operation and maintenance.
Eligibility
Eligibility of an applicant can be determined by filing an
application package with the appropriate USDA, Rural Development
Area
Office. Eligible applicants will be invited to continue processing their
request subject to the availability of funds. USDA, Rural Development
personnel will directly assist the applicant in the preparation of the
loan/grant application package.
After eligibility is determined but
prior to the development of the application docket the agency must be
able to satisfactorily:
Review and approve the preliminary engineering report.
Review and approve the engineering agreement
Complete the environmental review and assessment of the project impact on the human environment to include the applicant’s required advertisements and notifications to interested parties.
Any other item that is related to the above three items or is pertinent in being able to determine project feasibility.
To find the Area Office serving your County click here