Water and Waste Guaranteed Loan Program

What is the purpose of the program? Who is eligible to apply? How can funds be used? How much assistance can our group apply for?           What are the rates and terms? What are the security requirements? When can we apply for assistance? How will our application be evaluated? How do we apply?

What is the purpose of the program?  return to top
The Water and Waste Guaranteed Loan program provides government-backed credit enhancement to private lenders seeking to finance rural drinking water, sanitary sewage, solid waste disposal, and storm wastewater disposal facilities in rural communities.

Who is eligible to apply?  return to top

• Eligible Lenders
• Eligible lenders include:
• Any federal or state chartered bank or savings and loan association
• Any mortgage company that is part of a bank holding company
• Co-Bank, National Rural Utilities Cooperative Finance Corporation, Farm Credit Bank of the Federal Land Bank, or other Farm Credit System institutions with direct lending authority
• Insurance companies regulated by a state or national insurance agency
• State bond banks or state bond pools
• Lenders must be subject to credit examination and supervision by an appropriate federal or state regulatory agency and have the capability to adequately service loans.
• Eligible borrowers
• Eligible Borrowers include:
• Community based non-profit corporations
• Public bodies, such as municipalities, counties, and special purpose districts
• Federally recognized Native American Tribes
• Facilities must be located in rural areas with less than 10,000 residents.
• Borrowers must be unable to obtain credit at reasonable rates and terms without the guarantee.

How can funds be used?  return to top

• Funds can be used for:
• Purchase, construct, enlarge, extend and/or improve rural drinking water, sanitary sewage, solid waste disposal, and storm wastewater disposal facilities
• Purchase major equipment related to the project
• Pay related project expenses, such as legal, engineering, architectural, and environmental fees
• Refinance existing Rural Development debts
• Examples of recently funded projects:

How much assistance can our group apply for?  return to top

• Maximum loan limits are determined by project feasibility.
• Guaranteed loan funds may be used to pay 100% of the project costs.

What are the rates and terms?  return to top

• Rates and terms are negotiated between the applicant and lender.
• Variable interest rates are allowed
• Maximum allowable repayment term is 40 years or useful life of the facility/equipment

What are the security requirements?  return to top

• Loans must be based upon sound security, repayment ability, and reasonable financial projections.
• Security can include the following:

           Taxable general obligation bonds                   Taxable revenue bonds
           Pledges of taxes or assessments                    Assignment of facility revenue
           Land and buildings                                        Machinery and equipment
           Accounts Receivable                                    Assignments of leases or leasehold interest

When can we apply for assistance?  return to top

• Applications are accepted year round.

How will our application be evaluated?  return to top

• Lender eligibility
• Borrower eligibility
• Proposed loan is for an eligible purpose
• Reasonable assurance of repayment ability, sufficient collateral and equity
• Proposed loan complies with all applicable statutes and regulations
• Compliant environmental review is complete
• Adequate funding is available

How do we apply?  return to top

• Lenders and borrowers are strongly encouraged to contact their local Rural Development Office to discuss potential projects.
• Loans primarily processed on lender forms.
• Rural Development application materials will be available online in the near future.

Please send any comments or suggestions to:
keith.bastow@ia.usda.gov
Iowa Rural Development
Revised on: April 16, 2008