Interest subsidies may be granted when a business is incurring losses. The borrower must have minimum equity of 20 percent of project funding in cash or unencumbered assets to be used in the proposed business. Maturities may extend up to 30 years and vary with the use of funds and repayment capacity of the borrower. Interest rates are variable. Interest subsidy amounts are based on the difference between the Treasury interest rate for direct loans and the interest rate charged by the lender.
Subsidies are limited to the first three years of the loan.
Borrowers must be without decent, safe and sanitary housing. Borrowers must be unable to obtain a loan with reasonable terms and conditions from other sources. Borrowers must have sufficient income to pay mortgage payments, insurance, taxes, and living expenses. Persons with inadequate repayment ability may obtain cosigners for the loan. Loans may be used to buy, build, improve, repair or rehabilitate rural homes and related facilities, and to provide adequate water and waste disposal systems.