COMMUNITY FACILITIES

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USDA RURAL DEVELOPMENT
COMMUNITY FACILITIES PROGRAM
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Building Essential Community Facilities for
Public Use in Rural America

• USDA
• Rural Development Mission Area
• Rural Housing Service
• Community Facilities Programs

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WHAT IS AN ESSENTIAL COMMUNITY FACILITY?

• Essential service to the local community
• Needed for the orderly development of a community
• May not include private or commercial
• undertakings

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WHO IS ELIGIBLE FOR COMMUNITY FACILITIES
ASSISTANCE?

• Public bodies
• Nonprofit organizations
• Federally recognized Indian tribes

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ELIGIBLE APPLICANTS

• Primarily serve rural areas
• Provide certification they are unable to obtain
  other credit
• Have legal authority to own, construct, operate,
  and maintain the facility, issue security for and
  repayment of the debt

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ELIGIBLE AREAS

• Population of 20,000 or less
• - CITIES AND TOWNS
• - BOROUGHS

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WHAT CAN FUNDS BE USED FOR?

• Construction/Expansion
• Renovations and Improvements
• Equipment and vehicle acquisition

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TYPES OF COMMUNITY FACILITIES FUNDING AVAILABLE

• Loan Guarantees
• Direct Loans
• Grants

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COMMUNITY FACILITIES
All three funding methods can be
combined on the same project depending on the
financial strength of the organization and project

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COMMUNITY FACILITIES

• Advantages of Using Combination of Funding..
• - Direct loan portion can be subordinate to
  the guaranteed loan
• - Direct loan and grant program can be used
  to buy down the overall interest rate.
• - Reduction in overall risk to lender

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GUARANTEED LOANS
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COMMUNITY FACILITIESGUARANTEED LOANS

• All loans eligible for up to 90 guarantee
  against loss
• Interest rates and terms are negotiated between
  lender and borrower.
• No maximum loan limits amount is based on
  project feasibility, reasonable project costs and
  cash-flow

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COMMUNITY FACILITIESGUARANTEED LOANS

• Lender uses own promissory notes, loan agreements
  and security instruments
• Flexible terms allow lenders to extend long term
  loans to their customers
• Only a one time 1 guarantee fee charged and may
  be included in the loan

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COMMUNITY FACILITIESGUARANTEED LOANS

• ELIGIBLE LENDERS
• Any Federal or State chartered Bank or Savings
  and Loan Association
• Any Mortgage Company part of Bank holding
  company
• Credit Unions
• Banks for Cooperatives, State Bond Banks

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COMMUNITY FACILITIES DIRECT LOANS
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COMMUNITY FACILITIES DIRECT LOANS

• Loans made directly to borrowers
• Borrower must certify they are
• unable to obtain credit elsewhere
• No maximum loan amount-based
• projects costs/financial feasibility

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COMMUNITY FACILITIESDIRECT LOANS

• INTEREST RATES------
• Fixed for life of loan
• Based on median household income of area being
  served
• Currently at 4.25

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COMMUNITY FACILITIESDIRECT LOANS

• MAXIMUM TERMS
• - 40 years/fully amortized
• - Lifetime of facility
• - State/Local Laws

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COMMUNITY FACILITIES GRANTS

• Small program
• Grant eligibility determined by median household
  income and population
• Grant amount based on total project costs and
  financial feasibility

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EXAMPLES OF ESSENTIAL COMMUNITY FACILITIES
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COMMUNITY HEALTH CARE

• ASSISTED LIVING CENTERS
• NURSING HOME
• DENTAL CLINIC
• REHABILITATION CENTERS
• HOSPITALS

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CULTURAL AND EDUCATIONAL

• LIBRARY
• MUSEUM
• PUBLIC SCHOOL
• CHARTER SCHOOL
• STUDENT HOUSING

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FIRE, RESCUE AND PUBLIC SAFETY

• COMMUNICATION CENTER
• FIRE DEPARTMENT FACILITY
• CIVIL DEFENSE BUILDING
• FIRE TRUCKS
• POLICE STATION
• MULTI-SERVICE FIRE/RESCUE BLDG.
• JAIL

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PUBLIC BUILDINGS

• ADULT DAY CARE CENTER
• CHILD DAY CARE CENTER
• COURTHOUSE
• MUNICIPAL BUILDINGS
• PUBLIC MAINTENANCE BUILDING
• COMMUNITY CENTER

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TRANSPORTATION

• AIRPORT HANGAR
• BRIDGES
• OFFSTREET PARKING
• SIDEWALKS
• STREET IMPROVEMENTS
• SPECIAL TRANSPORTATION
• EQUIPMENT

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APPLICATION PROCESS

• Contact your nearest Rural Development office for
  pre-application package
• Pre-application submitted Rural Development
  reviews within 45 days for preliminary
  eligibility of applicant and project
• Application meeting held with applicant to
  discuss financing, construction and engineering,
  feasibility, and other project matters

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APPLICATION PROCESS

• Applicant submits complete application
• Rural Development conducts final review for
  eligibility, feasibility, funding and
  environmental requirements
• Letter of Conditions issued to applicant
  conditions and requirements of funding
• Applicant agrees to Letter of Conditions
• Funding approved

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APPLICATION PROCESS

• For construction/renovation projects all plans
  and specifications and contracts must be reviewed
  and approved by Rural Development
• Competitive Bid Process takes place
• Preconstruction Conference Held
• Interim financing or Rural Development financing
  closed
• Construction starts

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Visit Our Website
www.rurdev.usda.gov/pa