Community Facilities Guaranteed Loan Program
This program provides loan guarantees to eligible lenders to develop essential community facilities in rural areas.
Average award: $9,321,128 guaranteed loan in FY2021
Number of awards: 26 FY2021
Cost share/matching required: No; however, program will not cover total project costs
Deadline: N/A
Expected Award Cycle: Continual
Applications are accepted on a continual basis.
This program provides loan guarantees to eligible lenders to develop essential community facilities in rural areas. An essential community facility is defined as a public improvement, operated on a non-profit basis, needed for the orderly development of a rural community where the rural community is a city or town, or its equivalent county or multi-county area. The term “facility” refers to both the physical structure financed, and the resulting service provided to rural residents or rural businesses. Examples of essential community facilities that may be relevant to charter schools include community, public, social, educational, or cultural facilities or services; recreational facilities excluding golf courses; telecommunications equipment when not eligible for Rural Utility Services financing; health care facilities and services; and renewable energy systems for eligible facilities.
The maximum amount of a guaranteed loan is $100 million. The loan amount includes the guaranteed and unguaranteed portion. The loan guarantee percentage eligible for coverage is published annually in a Federal Register notice. The OneRD Guaranteed Loan Regulation sets the maximum amount of guarantee at 90% for all programs. However, each program can set a guarantee percent below this maximum based on its evaluation of current Federal credit policy in order to effectively manage its portfolio. Loan guarantees for Community Facilities in FY 2021 received an 80% guarantee. Funds can be used to construct, enlarge, extend or otherwise improve essential community facilities. Guarantee funds can also be used for refinancing the debt of an essential community facility.
Eligible applicants include Federal and State chartered banks, Farm Credit Banks with direct lending authority, Bank for Cooperatives, Savings and Loan Associations, Savings banks, Mortgage companies that are part of a bank-holding company, The National Rural Utilities Cooperative Finance Corporation, Credit unions, State Bond Banks or State Bond Pools. Eligible borrowers serviced by these loans include Public bodies, Indian tribes on Federal and State reservations, Federally-recognized Tribes, and Non-profit organizations. Eligible areas for funds use are rural areas with populations of 50,000 residents or less (the lender may be located anywhere in the United States).
- $1,007,000 to Lowcountry Montessori School (SC) in 2022.
- $38,970,352 to Adrian College (MI) in 2022.
- $2,700,000 to Bayou Community Academy, Inc. (LA) in 2022.
- $1,020,000 to Running River School, Inc. (AZ) in 2022
To file an application for programs under this initiative, lenders are encouraged to complete the following steps: 1. Download the 5001-1 – Application for Loan Guarantee document and 5001-2 – Lender’s Agreement document. 2. Review the final rule to ensure an application meets requirements under the initiative. General application requirements can be found in Subpart D of the regulation and starts at §5001.301. 3. Email a completed application to the local state USDA Rural Development office.
Non-Regulated Lenders are additionally required to request approval to apply through an online portal. Non-regulated lenders include lending entities that are not subject to supervision and examination by an agency of the United States or a State, including entities servicing Tribal Trust Land. To complete this process, entities review a Sample Approval Request form, create a cover letter and submit to [email protected], receive portal log-in and use information, then upload supporting files listed in the sample document.
A listing of local offices is provided online: www.rd.usda.gov/contact-us/state-offices.