PROGRAM DESCRIPTION: Funds are for essential community facilities such as hospitals, schools, clinics, roads, fire stations, child daycare and adult daycare.
TYPE OF ASSISTANCE: Loan guarantees only.
ELIGIBILITY REQUIREMENTS: Applicants can be public bodies (city, township, county or special district), Indian tribes, cooperatives or other non-profit organizations. Service area must be under 20,000 in population.
INTEREST RATE: The lender (bank, S&L, PCA, insurance company) buys the guarantee from Rural Development for 1% of the amount guaranteed. Interest rates are negotiated between the lender and business.
TERMS AND COLLATERAL: Term of the loan is 40 years maximum or the useful life of the facility, whichever is less. The lender is responsible for seeing that proper and adequate security is obtained. It may be such things as general obligation or revenue bonds, pledge of taxes or assessments, land, easements, rights, buildings, machinery and equipment, accounts receivable and assignment of leases. Appraisals are required.
CREDIT REQUIREMENTS: No marginal loans can be guaranteed. However, the borrower must be unable to obtain credit at reasonable rates and terms from other sources. No guarantee can be made to a Federal or State agency, or for a tax-exempt obligation. Guarantees will not exceed 90%. The guaranteed portion of the loan does not count against a financial institution's lending limits.
CONTACT: Applications are made at Rural Development Area offices.
For assistance, please contact the Area Office which serves the area you are interested in, or Jennifer Sass at 919-873-2070 or email@example.com
Please send any comments or suggestions to:
Revised on: August 2011