Community facilities — such as health care clinics,

police and fire stations, schools and child care centers

— are essential to the quality of life in any rural community. Through its Community Facilities Loan

Program, USDA Rural Development is striving to

ensure that such facilities are readily available to all

rural Americans. The commitment of USDA to this

effort is at the core of its mission and its promise to

help build stronger, more vibrant rural communities

across the nation.

Rural Development can make and guarantee loans to

develop essential community facilities in rural areas

and towns of up to 20,000 in population. Rural

Development can guarantee loans made and serviced

by lenders such as banks, thrifts, mortgage companies

which are part of bank holding companies, members of

the Farm Credit System, or insurance companies regulated by the National Association of Insurance

Commissioners. Rural Development may guarantee up

to 90 percent of any loss of interest or principal on the

loan. Normally, guarantees will not exceed 80 percent.

Direct loans from USDA can also be made to applicants who are unable to obtain commercial credit.

How May Funds Be Used?

Loans 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

Health Care

Clinics, ambulatory care centers, hospitals, rehabilitation centers, and nursing homes.

Education

Schools, school buses, Headstart centers, pre-schools,

child care centers and college classrooms and dormitories.

Public Safety

Communications centers, police and fire stations, fire

trucks, rescue vehicles, and jails.

Public Services

Adult day care centers, city halls, courthouses, community centers, homeless shelters, domestic abuse centers, food banks, airports, garages, off-street parking

facilities, sidewalks, street improvements, libraries,

museums, fairgrounds, and animal shelters.

Who May Apply?

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.

In addition, applicants must have the legal authority to

borrow and repay loans, to pledge security for loans,

and to construct, operate, and maintain the facilities.

Community Facilities Loans and Grants

Rural Housing and

Community Programs
They must also be financially sound and able to organize and manage the facility effectively.

Repayment of the loan must be based on tax assessments, revenues, fees, or other sources of money sufficient for operation and maintenance, reserves, and

debt retirement.

What Are the Terms?

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.

What Is the Interest Rate?

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. Certain other direct loans

may qualify for a lower interest 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 USDA review

and approval.

What Security Is Required?

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. Taxexempt notes or bonds may be issued to secure direct

loans, but cannot be used for guaranteed loans.

How Are Applications Made?

Applications are handled by USDA Rural Development

field offices. Rural Development staff will be glad to discuss a community’s needs and the services available

from USDA. Field staff can provide application materials and current program information, and assist in the

preparation of an application.

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For More Information

Rural Development field office locations are generally

listed in local telephone directories under the heading

U.S. Government, Department of Agriculture.

Interested applicants and lenders may also contact the

Housing and Community Programs National Office staff

at the following address:

USDA Rural Development

Community Programs Division

1400 Independence Avenue, SW.

Washington, D.C. 20250-0700

Telephone: (202) 720-1490

Fax: (202) 690-0471

Program Aid 1557

Revised March 1997

Reprinted February 2012

The U.S. Department of Agriculture (USDA) prohibits

discrimination in all its programs and activities on the

basis of race, color, national origin, age, disability, and

where applicable, sex, marital status, familial status,

parental status, religion, sexual orientation, genetic

information, political beliefs, reprisal, or because all or a

part of an individual's income is derived from any public

assistance program. (Not all prohibited bases apply to

all programs.) Persons with disabilities who require

alternative means for communication of program information (braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice

and TDD).

To file a complaint of discrimination write to USDA,

Director, Office of Civil Rights, 1400 Independence

Avenue, S.W., Washington, D.C. 20250-9410 or call

(800) 795-3272 (voice) or (202) 720-6382 (TDD).

USDA is an equal opportunity provider and employer.