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.

Who may apply for this program?

Lenders who have the legal authority, financial strength and sufficient experience to operate a successful lending program. This includes lenders that are subject to supervision and credit examination by the applicable agency of the United States or a State, including:

• 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
• Other non-regulated lending institutions may also be approved by the Agency under the criteria of the OneRD regulation.

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

How may funds be used?

Each year the Agency will reserve funds for projects located in rural areas with a population of not more than 20,000 inhabitants based on the following reservation of funds schedule:

• 100% of the first $200,000,000 made available
• 50% of the next $200,000,000 made available
• 25% of all amounts exceeding $400,000,000 made available

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.