Bonds or notes pledging taxes, assessments, or revenues will be accepted as security if they meet statutory requirements. A mortgage may be taken on real and personal property when state laws permit. Interest rates will be set periodically and will be based on current market yields for municipal obligations, except that some loans which involve the use of prime or unique farmland may require a slightly higher interest rate. Other loans may be made at a lower interest rate. Interest rates for direct loans for October through December 1999 ranged from a poverty rate of 4.5 percent to an intermediate rate of 5.0 percent to a market rate of 5.5 percent, depending on financial need.
Interest rates change quarterly.
Eligibility Loans and grants are available for public entities such as municipalities, counties, and special purpose districts. Nonprofit corporations and Indian tribes also may receive loans or grants assistance when adequate plans for debt repayment and operation of the facility are made. Be a function customarily provided by a local unit of government. Be a public improvement needed for the orderly development of a rural community. Be the area of jurisdiction or operation for the public bodies eligible to receive assistance or a similar local rural service area of a nonprofit corporation owning and operating an essential community facility.