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Program Overview
USDA Rural Development
(defined herein as either USDA or RD) provides a credit enhancement to
help finance community facilities in rural areas. Through the Community
Facilities Guaranteed Loan Program, RD guarantees up to 90 percent of
loss of principal and interest on loans and bonds made to develop or
improve essential community facilities in rural areas. A broad range of
community facilities are eligible for guaranteed loans. These include,
but are not limited to, community health services (such as health
clinics, assisted-living facilities, hospitals, nursing homes, and
medical and vocational rehabilitation centers); fire, rescue, and
public-safety facilities (such as police cars, fire trucks,
communication centers, and police stations); educational and cultural
facilities (such as schools, libraries, art museums, and theaters);
transportation facilities (such as airports, municipal garages, street
improvements, rail, or bus service); community support services (such as
child or adult day care and business incubators); and public buildings
and improvements (including community and multipurpose centers).
Guarantee
The guaranteed portion
is backed by the full faith and credit of the U.S. government and can be
sold on the secondary market. An Assignment of Guarantee, representing
the guaranteed portion is issued by the Rural Housing Service of USDA
Rural Development; and the agency pays all principal and interest in the
event of a loss. The non-guaranteed portion absorbs the loss, if any.
Overall, USDA guarantees up to 90% of any loss of principal or
interest. The guarantee fee is 1% of the guaranteed portion of the loan
and is paid by the Lender of Record, or may be passed on to the
borrower.
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Program Overview
- Guarantee
Lender of Record
Applicant
Financing
Guaranteed Program
Process Check List
Lenders Handbook
Lender's Info-To-Go
Success Stories
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