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Message From The State Director

This was a year of strong accomplishment and exciting innovation for Rural Development in Vermont. Our staff put $37 million in grants, loans, and

guarantees to work to help rural Vermonters purchase homes, improve their communities, and expand their businesses. I ampleased and proud to

present to our Vermont customers and partners this report of our activities for Fiscal Year 2000.

Our partnership with local housing agencies in the regional Home Ownership Centers enabled us to help 283 households into home ownership this

year. Many of these came about through the Rural Home Loan Partnership we enjoy with Rutland West Neighborhood Housing Services and Gilman

Housing Trust in the Northeast Kingdom. I attended a number of ribbon-cuttings this year for family apartment complexes, funded by our Rural Rental

Housing Programand developed by local nonprofit housing partners, all of which involved the redevelopment of existing buildings in community

centers such as Rutland, Brandon, and Morrisville.

Funding for two of our Intermediary Relending partners, the Vermont Community Loan Fund and Northern Community Investment Corportation, will

bring $1.25 million in needed capital to small rural businesses. Our first-ever direct business loan for $500,000 will help bring a new cooperative

supermarket to lower-income residents of downtown Burlington and the Old North End.

The persistent efforts of our Congressional delegation, initiated by Congressman Sanders, brought $750,000 in new funds to Vermont for an

agricultural tourisminitiative. These funds will provide low-interest loans, training and e-commerce linkages to many Vermont farmers seeking to

enhance farmincome with tourist products and services.

Nine water and sewage treatment projects got under way across the northern tier of the state this year with RD loans and grants, and the Community

Programs staff helped secure a $99,000 Distance Learning grant to the Vermont Center for the Deaf and Hard of Hearing.

Be sure to check out Rural Development's new and improved web site for Vermont at www.rurdev.usda.gov/vt. All of our staff contributed to making

this an informative, easy-to-use introduction to our many programs and services.

ROBERTA A. HAROLD

State Director

Housing Programs: $21,267,150

Rural Development provides affordable housing options for low and middle-income rural residents in Vermont. For home ownership, we made 110

direct, subsidized loans for a total of $6.5 million, with an additional $1.1 million of funds fromother leveraging partners. In our Loan Guarantee

program, we provided guaranteed loans to 173 families for a total of $13.6 million. This programprovides the lowest cost mortgage insurance on the

market for 100% no-down-payment financing.

For renters, we have a portfolio of 1500 units throughout the state which receive project-based rental assistance subsidies so that tenants do not pay

more than 30% of their income for shelter costs. We are making every effort to expand this base of affordable units through our Section 515 Loan

Program. This past year we were able to secure an additional $568,530 of project-based subsidies for 11 units.

For very low-income homeowners who need essential repairs, access modification, or weatherization, we offer 1% loans up to $20,000, and can offer

grants to elderly households based on need and availability. This past year we helped 56 households and provided a total of $273,000 in loans and

grants to needy people.

We are pleased with our FY2000 results and excited to be part of the Vermont affordable housing network to help Vermont citizens with limited
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resources deal with their housing needs.

Senator Patrick Leahy and State Director Roberta Harold at Open House for Hopkins Street family housing complex.

Business Programs: $9,147,035

Guaranteed Loans: The Business and Industry Guarantee programhelps traditional banks finance high-quality rural businesses that will create and

save quality jobs for Vermont's communities. In FY2000, Vermont RD guaranteed $6,150,000 in loans, leveraged $5.0 million dollars of private

investment and helped create or save 280 jobs paying an average wage of $12.08 per hour. Participating lenders in FY2000 included Community

National Bank, Merchants Bank, National Bank of Middlebury, Passumpsic Savings Bank, and Randolph National Bank.

Direct Loans: Our first direct business loan was approved during FY2000 to support the Onion River Cooperative with development of a retail grocery

store in downtown Burlington.

Grant Activity: Vermont RD awarded a total of $847,035 in grant assistance to support Vermont businesses during FY2000. We are pleased that 100%

of the projects funded willsupport Vermont's small farms or minority businesses. The largest grant recipient at $750,000 was the George D. Aiken

Resource Conservation and Development District. They will use the grant funds to establish a support center and revolving loan fund to support

Vermont farms with agritourismenterprises.

We were pleased again to support Vermont Public Television with funding to produce 10 new episodes of the popular "Rural Free Delivery" series.

This is our eleventh year of support to VPT.

Small Business Lending: Vermont RD hosts one of the largest small business lending programs in the country. The Intermediary Relending Program

provides small business loans through locally based lending organizations. In FY2000, Vermont RD provided an additional $1.25 million of capital to

the existing pool of $10 million dollars. Our nine active intermediaries assisted 32 businesses with $2,004,362 in loans that affected 277 rural jobs.

ShorehamApple Cooperative received assistance with re-starting their packing line through the Rural Business Enterprise Grant, Intermediary

Relending and Business Loan Guarantee programs. Our business counselor in Middlebury works with themon a continuing basis.

Community Programs: $6,327,675

Rural Development Community Programs provide funding to rural communities and non-profit organizations for capital improvement projects that

support essential community services such as child care, education, fire and rescue, transportation, and water and sewer systems. We also provide

technical assistance to communities in solid waste management and with the operation of their water and wastewater systems.

During FY2000, $1,242,145 in Community Facility loans, grants and loan guarantees supported 17 communities and organizations. These projects

ranged froma major expansion of Woodbury College in Montpelier and a 20 unit home for developmentally disabled adults in Morrisville to floor

replacement in the Richford Historical Society and the purchase of health equipment and furniture for the Oxbow Senior Center in Newbury, VT.

Our Water and Wastewater programprovided $4,825,630 in loans and grants to nine communities to build, improve or expand public water and sewer
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facilities. This funding included $2,240,000 to interconnect and improve the Montgomery Village and Montgomery Center water systems, alleviating

severe water shortages in Montgomery Center. Three organizations received a total of $161,000 in Solid Waste Management Grants to support

recycling activities.

Funding was provided for an additional circuit rider through the Northeast Rural Water Association. RD now supports two water and two wastewater

circuit riders who provide free on-site operational assistance to water and sewer systems. During 2000, these circuit riders assisted 137 Vermont

communities with 322 assistance visits to water systems and 226 visits to wastewater systems.

The Vermont Center for the Deaf and Hard of Hearing Inc., received a Distance Learning and Telemedicine grant of $98,900 to develop an interactive

video-based learning program.

Community & Business

Outreach Program

Community and Business Outreach Specialists located in St. Albans, Montpelier, Rutland and Brattleboro are committed to supporting and assisting

Vermont's rural communities, small businesses and non-profit organizations.

The specialists assist small businesses through a partnership with the Vermont Small Business Development Center in which they provide direct

counseling to businesses at SBDC offices in Brattleboro, Middlebury, St. Albans, Richford and Grand Isle.

Governor Howard Dean honored our successful working relationship with the SBDC by proclaiming October 19, 2000 as "Rural Development

Appreciation Day". The SBDC link enabled RD 's Community and Business Outreach Specialist to assist 350 small rural businesses, over half of them

owned by women.

The Outreach Specialists continue to assist community development projects, including a community-wide visioning process for Springfield,

redevelopment of the village of Shoreham, and new offices for the Champlain Islands Chamber of Commerce.

Assistance to communities and non-profit organizations can range fromshort termresearch assistance to long termfacilitation of major community

projects. During FY2000 our Specialists played major roles:

Forming a new Fire District that will provide a community

water systemin Castelton Corners

Helping farmers in Rutland and Addison County forma

cooperative to address their labor needs

Facilitating a community visioning process in Springfield

Assisting Alburg with planning for a community center and

identifying and attracting potential businesses to its

industrial park

Developing a comprehensive community development

strategic plan for the Northeast Kingdomthat has resulted in

a Rural Economic Action Partnership (REAP) designation of

the region which will qualify themfor enhanced funding
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opportunities.

U.S. Department of

Agriculture

Rural Development

Fiscal Year 2000 Annual Report

to the Citizens of Vermont

$36,741,860 Invested in Vermont