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.
How can loan funds be used? Eligible uses include, but are not limited to:
What can loan funds NOT be used for?
Lines of credit
- Owner-occupied and rental housing
- Golf courses or golf course infrastructure
- Racetracks or gambling facilities
- Facilities used for inherently religious activities
- Projects that create, directly or indirectly a conflict of interest
- Inherently commercial enterprises
What is considered an eligible area?
- Rural areas not in a city or town with a population of more than 50,000 inhabitants, with certain exceptions
- The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible rural area
Who may qualify for these loan guarantees?
Eligible borrowers are:
- Public bodies
- Indian tribes on Federal and State reservations
- Federally-recognized Tribes
- Non-profit organizations
Additional entities may be eligible for other types of loan guarantees under the OneRD Guarantee Loan Initiative.
Are there additional requirements?
- Applicants must have legal authority to construct, operate, and maintain the proposed facilities and services and to obtain, give security for, and repay the proposed loan
- Applicants must be unable to finance the project from their own resources or through commercial credit at reasonable rates and terms
- Applicants must provide evidence of significant community support
- Non-profit organizations must have significant ties to the project service area
- Tax exempt financing cannot be guaranteed by this program
- Facilities must be for public use and serve the rural area where they are/will be located