Q: Which programs are included under the OneRD Guarantee Loan Initiative?

• Water and Waste Disposal Loan Guarantees Program;
• Community Facilities Guaranteed Loan Program;
• Business and Industry Guaranteed Loan Program; and
• Rural Energy for America Program Loan Guarantees.

Q:What are the major changes in this final rule?

• Visit the OneRD Guarantee Loan Initiative Fact Sheet for an overview of changes included in the final rule.

Q: When did changes in the regulation take effect?

• Changes took effect on Oct. 1, 2020.

Q: Whom do I contact for more information?

• You may submit questions to .

Q: Will this regulation affect my Fiscal Year 2020 guarantee loan application?

• No. Changes in this regulation took effect on Oct. 1. 2020 and do not affect applications filed prior to Oct. 1, 2020.

Q: When did the application windows open for the four programs under OneRD Guaranteed Loan Initiative?

• The application window for each program under the OneRD Guarantee Loan Initiative opened on Oct. 1, 2020, applications are accepted on a rolling basis.

Q: When will forms and other materials to help me apply for loan guarantee programs under this initiative become available?

• Forms and other application resources are now available at www.rd.usda.gov/onerdguarantee

Q: Will USDA provide training to lenders to help prepare for the new policies and procedures under the OneRD Guarantee Loan Initiative?

• Yes. USDA has hosted multiple listening sessions and Office Hours for lenders. Attendees and registrants received access to the recorded sessions. Future sessions will also be recorded and provided to registrants. Training sessions will be announced at a later date and posted to www.rd.usda.gov/onerdguarantee

Where can lenders apply?

• As of Oct. 1, 2020, lenders may apply for loan guarantees under the OneRD Guarantee Loan Initiative using the common application form at www.rd.usda.gov/onerdguarantee

Can lenders pay brokers for referrals or packaging under the regulation?

• No. this is an ineligible use of loan guarantee funds. For more information, please refer to 5001.122 (d) in the regulation.

What are the Agency’s credit evaluation standards for lenders under this initiative?

• Please refer to 5001.202 in the regulation for the Agency's credit evaluation standards that are based on the “Five C’s of Credit,” which are character, capacity, capital, collateral and conditions.

How can lenders become approved to participate in programs under the OneRD Guarantee Loan Initiative?

• USDA is providing automatic approval to participate in all four loan guarantee programs to regulated lenders in good standing who are supervised or created by state or federal regulatory agencies, enroll in the online eAuthentication system, and complete a new lender’s agreement with the Agency. Please refer to Section 5001.130(b) of the regulation.
• Non-regulated lenders may seek approval to participate through a single approval process that will be valid for five years. To request approval, non-regulated lenders must submit a cover letter and documentation outlined in Section 5001.130(c) to OneRDlenderapproval@usda.gov Lenders may review a template for the cover letter and instructions on how to file requests. This also applies to non-regulated lending entities serving tribal trust lands except that Section 5001.130(d) governs these requests.

Is interim financing an option with OneRD guarantee?

• Yes. Please refer to Section 5001.121(c)(6) of the regulation for more information.

Q: What are the eligible uses for a OneRD guaranteed loan?

• Water and Waster Disposal Guaranteed Loan Program.
• Community Facilities Guaranteed Loan Program.
• Business and Industry Loan Guarantee Program.
• Rural Energy for America Guaranteed Loan Program.

Q: What are the loan requirements for a loan guarantee under this initiative?

• The lender participating in programs under the initiative has the responsibility to submit applications for quality loans that are underwritten with generally accepted prudent lending practices for commercial, public and project financing. The lender will determine the loan term, interest rate, and collateral requirements, though these must be approved by the Agency. .

Q: What Collateral Is Required?

• Collateral must have documented value sufficient to protect the interest of the lender and the Agency. Lenders will discount collateral consistent with sound loan-to-value policy with the discounted collateral value at least equal to the loan amount. The lender must provide satisfactory justification of the discounts being used. Hazard insurance is required on collateral (equal to the loan amount or depreciated replacement value, whichever is less).

Q: Can programs under the OneRD Guarantee Loan Initiative be used to finance construction?

• Yes. All programs under the initiative may issue a loan note guarantee prior to completion for projects that demonstrate use of approved technologies. The lender filing the application must adequately mitigate project-risk by meeting requirements as listed in Section 5001.205 (e) (2) of the regulation. If the Agency approves the lender's proposal to provide the loan note guarantee prior to completion, the loan must identify payments required during the construction period and convert to permanent financing. The loan must not include a balloon payment.

Q: What amount of equity is required for nre businesses and existing businesses?

• All borrowers are required to have sufficient capital or equity to mitigate the ongoing financial and operational risks of the business. Only REAP loans require a minimum of 25% of total project costs from other funding be placed into the project.

Q: Are there feasibility study requirements?

• The OneRD Guarantee Loan Initiative provides discretion and flexibility based on the complexity of the project in addition to the loan amount. Lenders may provide adequate discussion of project risks in the credit evaluation or in other application documents which may negate the need for an independent feasibility study.
• For B&I loans more than $1 million, the Agency has discretion in the scope of the feasibility study based on the complexity of the new business operation and the history of the borrower. The Agency may also reduce the scope of the feasibility study if the lender's analysis provided sufficient information and analysis regarding the technical and economic feasibility that would be contained in an independent feasibility study.

Q: What fees are associated with the OneRD Guarantee Loan Initiative?

• All programs have an initial guarantee fee that is published annually in a Federal Register notice. Additional fees, such as a periodic guarantee retention fee, will also be published annually.

Q: What is the maximum amount of a loan guarantee for is programs under the initiative?

• The loan guarantee percentage for programs under the initiative is published annually in a Federal Register notice. According to this year’s annual notice, loans approved in Fiscal Year 2021 will receive an 80 percent guarantee regardless of the loan size.

Q: Does this regulation apply to the Business and Industry CARES Act Program?

• No. Provisions of the B&I CARES Act Program are contained in 7 CFR 4279.190.

Q: Does this regulation apply to the Business and Industry CARES Act Program?

• No. B&I CARES Act applications will be reviewed pursuant to the B&I CARES Act regulation. Applicants should continue to use the B&I forms developed prior to the OneRD Guarantee Loan Initiative.

Q: How should multi-state lenders submit applications for B&I CARES Act loans?

• I CARES Act loans from multi-state lenders should be uploaded to the lenders unique OneRD Guarantee CloudVault, regardless of loan amount.

Q: How should in-state lenders submit applications for B&I CARES Act loans?

• I CARES Act loans from in-state lenders should be filed with the appropriate RD State Office.

Q: Are Rural Energy for America Program (REAP) grants affected by the OneRD Guarantee Loan Initiative?

• No. This initiative only impacts loan guarantees. 7 C.F.R. 4280 will continue to govern REAP grants.