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Iowa |
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Community Facilities
Community facilities are essential to the quality of life in any rural community.
Rural Development (RD), through the Community Facilities Program (CF), provides funds and technical assistance to help
communities meet the basic needs of its citizens, as well as build a stronger, more vibrant rural community.
Funds may be used to construct, enlarge, or improve community facilities for purposes such as health care, public safety, and
public services. This can include costs to acquire land for a facility, pay professional fees, or purchase operating equipment.
Community Facilities Direct Loans and Grants and Community Facilities Guaranteed Loans are used to construct, enlarge, extend,
or otherwise improve community facilities providing essential services in rural areas and towns with a population of 20,000 or less.
The funds are available to public entities such as municipalities, counties, special purpose districts, Indian tribes, and corporations
not operated for profit.
Essential Community Facilities include:
- Health Care - Clinics, ambulatory care centers, hospitals, rehabilitation centers and nursing homes.
- Public Safety - Communications centers, police and fire stations, fire trucks, rescue vehicles, fire and rescue equipment, and jails.
- Public Services - Child care centers, assisted living projects, sheltered workshops, community centers and buildings, airports and libraries.
Eligibility Requirements:
- Applicant must be unable to obtain funds from commercial sources at reasonable rates and terms.
- Applicant must have the legal authority to own, construct, operate, and maintain the proposed facility.
- applicant must provide for facilities needed for orderly community development, consistent with the State Strategic Plan.
Terms for Community Facilities Direct Loans:
- The maximum term for all loans is 40 years; however, the repayment period is limited to the useful life of the facility or any statutory limitation
on the applicant's borrowing ability.
- Bonds or notes pledging taxes, assessments, or revenues will be accepted as security if they meet statutory requirements. Mortgages may be
taken on real and personal property.
- Interest Rates:
- Interest rates for direct loans are based on current market yields for municipal obligations.
- Direct loans may qualify for a lower interest rate depending upon the median
household income of the residents of the community to be served.
- Tax-exempt notes or bonds may be issued to secure direct loans.
- The poverty rate is appropriate if the median household income of the service area is below 80%
of the state nonmetropolitan median household income ($31,984) and the loan is to upgrade existing facilities or construct new facilities
required to meet applicable health or sanitary standards. Currently, the poverty rate is 4.5%.
- The intermediate rate applies to loans that do not meet the requirements for the poverty line rate or for which the median household income
in the service area more than 100% of the nonmetropolitan median household income of the state ($39,981). The intermediate rate is midway
between the poverty and market rates.
- The market rate applies to all loans that do not quality for the poverty or intermediate rates. The market rate is adjusted quarterly based
on a bond buyer index.
Community Facility Grants:
- Rural Development has a limited amount of grant funds for community facilities projects.
- Grant assistance may be available for up to 75 percent of the project costs. Grants are authorized on a graduated scale.
- Grant assistance is limited to the following percentages of eligible project costs:
- 75 percent when:
- Population of 5,000 or less
- MHI of 23,988 or less
- 55 percent when:
- Population of 12,000 or less
- MHI of 27,986 or less
- 35 percent when:
- Population of 20,000 or less
- MHI of 31,984 or less
- 15 percent when:
- Population of 20,000 or less
- MHI of 35,982 or less
- Grants are further limited to the minimum amount needed for economic feasibility of the project and with consideration to the availability of
funds.
Child Care:
Please send any comments or suggestions to:
keith.bastow@ia.usda.gov
Iowa Rural Development
Revised on: July 23, 2004