Direct Community Facility Loans (CF)
These loans are made directly by USDA/Rural Development at favorable interest rates. Loans are made to construct, equip and otherwise improve essential community facilities which provide health care, public safety and public service in rural areas and towns with populations less than 20,000. Health care facilities include hospitals, nursing homes, dental or medical clinics or rehabilitation centers. Public safety facilities include fire stations and buildings to house fire and rescue equipment. Funds may also be used for the purchase of fire trucks, ambulances or emergency communications equipment, police stations, jails and the necessary costs associated with these facilities. Public service facilities include community buildings, courthouses, libraries, schools, industrial parks and airports. Other types of community facilities that provide essential services to rural residents, such as day care facilities are also eligible. Eligible applicants include nonprofit corporations and public bodies, such as municipalities, counties, townships, special purpose districts and authorities.
Community Facility Loan Guarantees
Loans made by eligible lenders for the same purposes as listed above can be guaranteed by USDA/Rural Development. Eligibility is limited to the same type nonprofit or public body as listed above. Eligible type projects include those relating to health care, public safety and public service, as also detailed in our explanation of the Direct CF Loan described above. Rates and terms are negotiated between the lender and the borrower. The only fee is a 1 percent guarantee fee paid by the lender at the time the guarantee is issued. This fee is 1 percent of the guaranteed portion of the loan and is usually passed on to the borrower. Funding is readily available under this program.
Community Facilities Grant Program
Grant funds are also available under the Community Facilities Program,
but on a very limited basis. These grants will normally be made in
conjunction with a direct CF Loan in areas of the greatest need to make
the project affordable. Priorities include the smaller, lower income
communities involving health care or public safety projects.