USDA, RURAL DEVELOPMENT FUNDING PROGRAMS

Transcription

1 USDA, RURAL DEVELOPMENT FUNDING PROGRAMS COMMUNITY FACILITIES LOAN PROGRAM

2 U. S. Department of Agriculture Rural Development Other Agencies: FSA, NRCS, etc. Housing Programs Community Programs Business Programs Community Facilities Water and Waste Disposal Loan & Grant Program

3 COMMUNITY FACILITIES LOAN PROGRAM

4 PROGRAM OBJECTIVE: FINANCE THE DEVELOPMENT AND IMPROVEMENT OF ESSENTIAL PUBLIC FACILTIES THAT SERVE RURAL AREAS AND ARE FOR PUBLIC USE ANY FACILITY NEEDED FOR THE ORDERLY DEVELOPMENT OF A RURAL COMMUNITY. MEDICAL CLINICS, FIRE STATIONS, FIRE TRUCKS, ASSISTED LIVING FACILITIES, ROADS, BRIDGES, ETC.

5 Three Types of Community Facilities Loan Assistance: Direct Loans Guaranteed Loans

6 Eligible Organizations Public Bodies - City, Town, County, District, etc. Non-Profit Corporations Federally Recognized Indian Tribes

7 Non-Profit Eligibility Broadly based board representing community served Association with or controlled by a local public body Substantial public funding through taxes or other local government sources

8 FACILITY MUST BE LOCATED IN AND PRIMARILY SERVE A RURAL AREA DEFINED AS: Incorporated communities and Census Designated Places (CDP s) with a Population of 20,000 or less per the 2010 Census All Other unincorporated communities and areas

9 FUNDS MAY BE USED FOR: Virtually any expense relating to the development or improvement of an eligible facility Land purchase, construction costs, architectural fees, construction interest, equipment purchase, etc.

10 Loan Rates & Terms Direct Loans - Up to 40 year repayment term Interest Rate Currently 3.375%. Fixed rate for life of loan. Guaranteed Loans- Negotiated between lender and borrower Can be fixed or variable Both direct and guaranteed CF loans may be made for 100 % financing.

11 Feasibility & Loan Security All loans must be documented to be adequately secured and be based on satisfactory sources of repayment. Non-Profits - Real Estate, Equipment, Revenues, etc. Public Bodies - Usually Revenue or G.O. Bonds A very important consideration is...

12 SIGNIFICANT COMMUNITY SUPPORT

13 Unavailability of Other Credit Eligibility Requirement: The Agency must determine and document that credit to finance the proposed project is not available at reasonable rates and terms from commercial credit sources. Statutory requirement the agency must address. Likely the most often misunderstood and problematic of our requirements. Unique to Rural Development Why? Intended to protect the legitimate business interests of private lenders from competition from the Government.

14 Unavailability of Other Credit: How is this documented: Letter from commercial lenders- Often not the best option for public body applicants. Analysis by finance professional comparing financing options and costs Investment banking firms, consultants, etc. More difficult for financially strong applicants. Documentation must be credible and in writing. Applicant s should not try to get a turn down letter.

15 OTHER GOOD THINGS TO KNOW: THERE ARE NO APPLICATION PROCESSING FEES OR ADMINISTRATIVE CHARGES LOANS CAN BE PAID OFF AT ANY TIME WITH NO PREPAYMENT FEES OR PENALTIES. USE RD FUNDS TO JOINT FINANCE WITH OTHER FUNDING SOURCES; CDBG, EDA, State Appropriations, ETC. PROSPECTS FOR FUNDING ARE GOOD!

16 OTHER GOOD THINGS TO KNOW: Applications may be submitted at any time. Costs incurred prior to the date of funding approval are eligible as long as they are otherwise eligible and related to the project. Assistance in preparing the application is available from RD staff. Florida has 6 RD Area Offices located around the state.