FY 1998 Year End Report

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(No Transcript)
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USDA Rural Economic Development Loan and Grant
Program (REDLG)January 14, 2008Oklahoma City,
OklahomaWilliam F. Hagy IIIDeputy
Administrator, Business ProgramsUSDA Rural
Development
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• Overview
• Brief History
• Eligible entities/purposes
• Funding Mechanisms
  
• Historical Funding Perspective
• New Regulations
• Marketing of Program

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• Brief History of REDLG
• Final Rule implementing REDLG program was
  published February 15, 1989
• Administered by REA until FY 94
• Administered by RBS since FY 94

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• Rural Economic Development
• Loans Grants (REDLG)
• Eligibility An organization is eligible to
  apply for REDLG funding if it can be described
  as
• Any former Rural Utility Service (RUS) borrower
  that has repaid or prepaid an insured, direct, or
  guaranteed loan under the Rural Electrification
  Act,
• any not-for-profit utility that is eligible to
  receive an insured or direct loan under such Act
  or,
• any borrower currently in debt under such Act.
• Purpose Revolving loan programs, community
  development, technical assistance, construction,
  capital improvements, purchase of machinery and
  equipment, and working capital.

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• How REDLG is Funded
• Cushion of Credit
• Electric Underwriting Program

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• REDLG Earrings/Obligations
• FY 02 07
• Electric
• Cushion of Underwriting
• FY Credit Program REDL Obligation REDG
  Obligation
• 2002 18,781,606 0 14,966,88 7 2,620,000
• 2003 35,939,626 0 14,869,939 4,066,300
• 2004 71,628,275 0 14,704,169
  10,786,000
• 2005 89,106,402 429,041 24,302,375
  8,120,000
• 2006 69,718,134 4,945,479 25,110,309
  10,000,000
• 2007 37,475,627 6,644,363 26,167,000 9,963,333
• Total 322,649,270 12,018,883
  120,120,679 45,555,633

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• Rural Economic Development Loan and Grant Program
  
• Funding History FY 01 07
• RED Loans RED Grants
• FY No. Amount No. Amount
• 2001 66 22.6M 16 2.96M
• 2002 42 15.0M 15 2.6M
• 2003 43 14.9M 22 4.2M
• 2004 41 14.7M 13 10.8M
• 2005 52 24.3M 31 8.1M
• 2006 46 25.1M 36 10.0M
• 2007 44 26.2M 37 9.96M
• Totals 334 142.8M 170 48.62M

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Rural Economic Development Loan Program FY 2007
NH
In Thousands
VT
ME
WA

ND

MA
MT
0 - 199
MN 1
NY
OR
WI 1

ID
200 - 999
SD 2
RI
MI 1
WY
CT
PA 1
1,000 - 2,999
IA 4
NJ
OH
NE 1
NV
IN
DE
gt3,000
IL 1
WV
UT
MD
CO 1
VA 2
CA
KS 8
KY 4
MO 2

NC
TN 5
Total Loans 44
SC 7
OK 1
AR
NM
AZ
Total Funds 26,167,000
GA 2
MS
AL
LA
TX
WP
FL
AK
PR
HI
VI
As of September 30, 2007
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Rural Economic Development Loan ProgramCaseload
As of September 30, 2007
NH

VT
ME 1
WA
1
MA
ND 20
MT 21
MN 76
NY 1
OR 1
WI 17
ID
SD 21
MI 8
RI
WY 3
CT
PA 4
IA 48
NJ
NE 9
OH 3
IN 8
DE

IL 2
NV
UT
MD
WV
CO 2
VA 5
KS 66
KY 23
MO 14
CA

NC 16
TN 35
SC 12
OK 12
NM 6
AZ
AR 6
GA 14
MS 18
AL 18
LA 2
AK

TX 2
WP
FL 4
PR
VI
HI
0
1 - 999,999
1M - 2,999,999
3M - 5,999,999
6M - 8,999,999
9M - 20,000,000
gt20,000,000
Total Cases 499
Outstanding Portfolio 191,969,677

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Rural Economic Development Grant Program FY 2007
NH
In Thousands
VT
ME
WA

ND

MA
MT 1
0 - 99
MN 3
NY
OR 1
WI

ID
100 - 299
SD 2
RI
MI
WY
CT
PA
300 - 599
IA 13
NJ
OH
NE 3
NV
IN
DE
600 - 999
IL
WV
UT
MD
gt1000
CO 1
VA
CA
KS 4
KY 1
MO 1

NC 1
TN 1
Total Grants 37
SC 2
OK 1
AR
NM
AZ
Total Funds 9,963,333
GA
MS
AL 1
LA
TX
WP
FL
AK
PR
HI 1
VI
As of September 30, 2007
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Rural Economic Development Grant Program
Caseload As of September 30, 2007
NH 1
ME

VT

WA 2
ND 13
MA
MT 2
MN 49
NY
OR 1

WI 15
ID
SD 32
MI 3
RI
WY 3
CT
PA 2
IA 108
NJ
IN 2
OH 2
NE 8
DE

IL 5
NV
UT
WV
MD
CO 3
VA 3
KY 7
KS 24
MO 10
CA
CA
NC 18
TN 13
SC 5
OK 7
NM 4
AZ
AR 1
GA 4
MS 2
AL 21
LA
AK
1
TX 2
WP
FL 5
PR
HI 2
VI
0
1 - 999,999
1M - 1,999,999

2M - 3,999,999
gt4M - 8,999,999
gt9,000,000
Total Cases 380
Outstanding Portfolio 109,321,888

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• 4280-A Rural Economic Development
• Loan and Grant Program
• New RD Instructions, 4280-A replace the old,
  1703-B,
• Website http//www.rurdev.usda.gov/regs/regs/pdf/
  4280a.pdf
• Scope Program Administration, application
  processing,
• disbursement, monitoring, and
  reporting

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• Highlights of Changes from the Old Regulations to
  the New
• Listing of definitions as used in Subpart 4280-A
• RUS Borrower is now referred to as the
  Intermediary
• The Rural Development plan is replaced with the
  Revolving Loan Fund Plan.

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• Highlights of Changes
• REDLG Projects must be located in a Rural Area
• Definition of Rural Area
• New Definition Any area other than a city or
  town that has a population of greater than 50,000
  inhabitants and the urbanized area contiguous and
  adjacent to such city or town.
• Old Definition Any area not included within
  boundaries of any urban area as defined by the
  Bureau of the Census.
• Interest rates on Ultimate Recipient loans funded
  with revolved funds will be at the discretion of
  the intermediary as shown in the RLF Plan, but
  not to exceed the prevailing prime rate.

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• Highlights of Changes
• Agricultural production is an eligible purpose
  only where the
• project
• Benefits farmer-owned cooperatives or a similar
  farmer-owned organization
• The agricultural production portion of the loan
  will not exceed 50 of the loan amount

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• Highlights of Changes
• Loan Fund Usage Intermediary must loan funds
  to ultimate recipient within one year
• Maximum Loan Term Maximum of 10 years including
  principal deferent period
• To provide consistency with other Agency
  programs, Letter of Agreement is now referred
  to as the Letter of Conditions.
• Supplemental Contribution Provides option for
  Intermediary to use supplemental contributions
  for same project or separate eligible project
  within 3 years

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• Highlights of Changes
• Principal Deferment Period Upon request by
  intermediary, a one year deferment will
  automatically be granted for established projects
  and two years for start-up ventures or community
  facilities projects.
• Limitation of Number of Awards Annually
  Depending on the amount of funds available, the
  Agency may publish an announcement limiting an
  Intermediary to one selected Grant application
  and two selected loan applications in a fiscal
  year

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• Highlights of Changes
• Completely new application evaluation and scoring
  criteria

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• Marketing of Program
• RUS/RBS Collaboration
• Field Office Training
• Success Stories

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• REDL, Best Practices - Iowa
• 400,000 REDL to Iowa Electric Cooperative.
• Pass through loan to an LLC to assist financing
  of 40 mgy ethanol plant.
• Operational in April 2004

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• REDL, Best Practices - Iowa
• Co-Line Welding, Inc.
• 450,000 loan funds to provide grants to RUS
  borrowers to provide economic development.
• 15 jobs were created and 70 jobs were saved.

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• REDL, Best Practices - Kentucy
• P.J. Murphy Forest Products Corporation
• 250,000 loan funding was used to purchase new
  equipment for animal bedding facility.
• The facility created 8 jobs. Indirectly 7 jobs
  will be created through transportation of raw
  materials.

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• REDL, Best Practices - Kansas
• Clasen Inc. is a grocery store serving 3,000
  residents.
• The store will provide a deli , flower shop, and
  catering services.
• 450,000 will be used for expansion.
• 10 new jobs will be created.

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• REDL, Best Practices - Oklahoma
• The Northpark Professional Center project lies
  within Caddo County, which is one of our fourteen
  targeted poverty counties.
• 352, 000 REDL funds were used to assist with
  remodeling of facility.
• 3 jobs was created with 30 jobs indirectly
  created in a town with a population of 6,600.

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• REDL, Best Practices South Dakota
• The Artesian /Lectcher School District Project
  needed funding for construction of K-12 school
  building.
• 450,000 loan funds resulted in 55 jobs.

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• QUESTIONS