California Community Economic Revitalization Team
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California Community Economic Revitalization Team |
Community Facilities Loans/Guaranteed Loans/Grants |
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Agency: USDA Rural Development - Rural Housing Service
Program: Community Facilities Loans/Guaranteed Loans/Grants
Program Description: Rural Housing Service (RHS) can make and guarantee loans to develop essential community facilities in rural areas and towns of up to 50,000 in population. Loan funds may be used to construct, enlarge, or improve community facilities for health care, public safety, and public services. This can include costs to acquire land needed for a facility, pay necessary professional fees, and purchase equipment required for its operation. Examples of essential community facilities include: Health Care; Telecommunications; Public Safety; and Public Services.
Eligibility: Loans and guarantees are available to public entities such as municipalities, counties, and special-purpose districts, as well as to nonprofit corporations and tribal governments. Applicants must have the legal authority to borrow and repay loans, to pledge security for loans, and to construct, operate, and maintain the facilities. They must also be financially sound and able to organize and manage the facility effectively.
Funding Information: Grant assistance may be available for up to 75 percent of project costs. A scale has been developed to predetermine grant funding limitations based on population and income. Grant assistance may be further limited to the minimum amount sufficient to provide economic feasibility to the project and either $50,000 or 50 percent of a State annual allocation, whichever is greater.
The maximum term for all loans is 40 years. However the repayment period is limited to the useful life of the facility or any statutory limitation on the applicant's borrowing authority. Interest rates for direct loans are based on current market yields for municipal obligations, although loans for facilities impacting prime or unique farmland may require a slightly higher rate, depending upon the median household income of the residents of the community to be served. The interest rates for guaranteed loans may be fixed or variable and are determined by the lender and borrower, subject to RHS review and approval.
Bonds or notes pledging taxes, assessments, or revenues will be accepted as security if they meet statutory requirements. Where State laws permit, a mortgage may be taken on real and personal property. Tax exempt notes or bonds may be issued to secure direct loans, but cannot be used for guaranteed loans.
Timelines: Applications are accepted year round.
Contact:
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