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USDA Rural Development

USDA Rural Development. Elsie M. Meeks State Director April 20, 2011. USDA RD Our Mission. To increase economic opportunity and improve the quality of life for all rural Americans. USDA - Rural Development. Rural Business / Cooperative Programs Rural Housing Programs Rural Utilities.

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USDA Rural Development

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  1. USDA Rural Development Elsie M. Meeks State Director April 20, 2011

  2. USDA RD Our Mission To increase economic opportunity and improve the quality of life for all rural Americans

  3. USDA - Rural Development • Rural Business / Cooperative Programs • Rural Housing Programs • Rural Utilities

  4. Business Finance 8 programs

  5. Business and Industry Program Guarantees to local lenders 80% up to $5 million 70% up to $10 million 60% up to $25 million For starting or expanding rural businesses and cooperatives Reduces risk to lenders and raises their lending limits

  6. Business and Industry Guaranteed Loans • Loans are Made by Eligible Lenders • Uses of loans: • Equipment • Construction • Working capital • Refinancing in Certain Situations

  7. Rural Business Enterprise Grant Provides Grants to: Public Bodies (Cities) Non-Profits, Tribes All Serving Rural Areas • Grants can finance small and emerging private businesses and cooperatives, provide technical assistance or fund a revolving loan program • Commonly requests are $99,000 or less have higher priority

  8. Rural Business Opportunity Grants (RBOG) • Eligible applicants: tribes, nonprofits, public bodies • Purposes: • Identify and analyze business opportunities • Provide TA to existing or prospective entrepreneurs • Conduct local or multi-county Econ. Dev. Planning • Conduct leadership training • Pay for professional services for planning or training. • Priority scoring: Applications under $50,000

  9. Rural Economic Development Loan • Zero Percent Interest Loans may be made to RUS Borrowers (Electric or phone Coops) • Supplemental Funding of at Least 20% of the Zero Percent Interest Loan is Needed • $740,000 Maximum Loan

  10. Rural Economic Development Grant • Revolving Loan Fund (RLF) Established by Electric or Telephone Coop • Funding for Community / Medical Facilities and Education Facilities • $300,000 Maximum Per Project

  11. Value Added Producer Grants (VAPG) • Eligible: Individuals, LLC, LLP, For-Profits, or Non-Profits that are owned or controlled by Ag Producers • Funding under a NOFA (Deadline) (likely due in mid July) • Planning Grant $100,000 • Working Capital $300,000. • There is a $1 to $1 match requirement • Must be a change in the physical state of the product

  12. Sec. 9007: Rural Energy for America Program Grants and Loan Guarantees for Farmers, Ranchers, and Rural Small Businesses

  13. Section 9007Renewable Energy and Energy Efficiency Improvement • Purchase renewable energy systems (A system that producesor produces and delivers usable energy from a renewable energy source) • Energy Efficiency Improvements (Improvements to a facility or process that reduceenergy consumption)

  14. RE/EE Program Overview • Section 9007 – Cost Sharing • The amount of the grant shall not exceed 25% of the eligible cost of the activity funded. • The combined loan and grant made or guaranteed shall not exceed 75% of the eligible cost of the activity funded. • Only post-application costs eligible.

  15. What Small Businesses are Eligible? • A private entity including a sole proprietorship, partnership, corporation, & cooperative • Citizenship • Visit http://sba.gov/size/index.html for meeting the size definition. • NOTE: Public or private non-profits are not eligible.

  16. What Agricultural Producers Are Eligible? • Must directly engage in production of agricultural products. • At least 50% of gross income must be from agriculture production. • Citizenship.

  17. Solar Energy Solar Powered Stock Tanks in the Powder River Basin: A Renewable Energy System for Livestock Producers Wind Energy

  18. Geothermal – Direct Use • A system that uses thermal energy directly from a geothermal source • At high temperatures, can directly heat water or buildings • At lower temperatures, temperature difference between earth and air can heat and cool buildings Hydrogen • A renewable energy system that produces hydrogen or a renewable energy system that uses mechanical or electric power or thermal energy from a renewable resource using hydrogen as an energy transport medium.

  19. Energy Efficiency ImprovementsGrain Bin Dryer Replacement 2 projects funded in SD in FY 07 7 projects funded in SD in FY 08 28 projects funded in SD in FY09 40 projects funded in SD in FY10

  20. Energy Efficiency ImprovementsIrrigation Pump Replacement South Dakota 3 projects Example: The project replaced an old, inefficient diesel motor with a new electric, more efficient motor on an irrigation well.

  21. Application Deadline • Funding hasn’t been announced yet, but we’re expecting it in March. We encourage applicants to file early. • $407 million funding in FY10 ($20 mm grants) • $60 million funding in FY09 • $35 million funding in FY08 • $23 million in FY07 • Contact Rural Development office nearest you to start the application process. • Get a firm bid on the equipment • Talk to your banker about the guaranteed loan.

  22. Intermediary Relending Program • Eligible applicant: non profits, Tribes, public agencies • Purpose: start a revolving loan fund • Rates & Terms – 1% for 30 years to the intermediaries and they relend • Deadline to apply: quarterly

  23. Rural Housing Program

  24. 502 Direct Housing Loans are at 100% financing for low & very low income families. Guaranteed Loans are at 100% financing for households with higher incomes. 502 Single Family Housing Program

  25. Benefits of the SFH Program • No down payment. • Generous ratios of 29% PITI and 41% TD. • Closing costs can be financed.

  26. Guaranteed Loan Program Guidelines • Available to families or persons whose incomes at time of initial occupancy do not exceed 115 percent of Median Household Income. • Up to 90 percent Guarantee.

  27. 504 Single Family Housing Program • Loans or grants for elderly single family home owners 62 years of age or old. • Loans are at 1% interest rate for 20 years with a maximum amount of $20,000. • Maximum grant amount is $7,500 life time.

  28. Rural Rental Housing Direct Loans Section 515. MFH in communities of 20,000 population or less. Rental Subsidies available to low income tenants. Housing built with 515 loansis for families, people 62 years of age or older, and people with disabilities. Serves mostly low income families. Multi-Family Housing Program

  29. Multi-Family Guaranteed Loans Section 538 • Guarantee loans by conventional lenders for affordable • rental housing. Aimed at low to moderate income tenants. • Develop affordable rental housing in rural areas (20,000 • and less) through use of loan guarantees combined with • risk sharing partnerships of public and private lenders. • 90% guarantee

  30. Rural Utilities Programs

  31. Water and Environmental Program Direct and guaranteed loans and grants to install, expand, and improve water and wastewater systems, solid waste disposal, and storm sewers. In towns under 10,000 population.

  32. Applicant Eligibility • Public Body, town or county • Not for profit organization • Associations • Indian Tribes

  33. Drinking Water Projects • New Rural Water System • Rural Water Extensions & Upgrades • Water Storage Tanks • Water Treatment Plants

  34. Sanitary Sewer Projects • New Sewer Systems • Sewer System Extensions • Wastewater Treatment Plant Improvement

  35. Solid Waste Disposal Projects • Equipment • Trash trucks • Transfer stations • Landfill

  36. Water & Environmental Programs • Terms – up to a 40 year loan or useful life of the security • Rates – usually around 4.0 to 4.5%

  37. WEP Grants… • Grant funds are limited. • MHI Below $33,795 • Project is necessary to alleviate a health or sanitary problem then MHI needs to be at 80% of MHI. • Pre Development Planning Grants • max. $20,000 (not to exceed 75% of cost) • 80% of MHI

  38. Community Facilities Program Direct and guaranteed loans, and grants, to public entities, Indian tribes, and nonprofits. Improve the economic and environmental climate of rural communities. • Examples: • Health Care – hospitals, clinics, nursing homes; • Public Services – adult & child care, airports, schools, libraries; • Public Safety – police & fire stations, vehicles, jails.

  39. Community Facilities Guaranteed Loans • Community facilities - such as health care clinics, assisted living facilities, police and fire stations, and schools -are essential to the quality of life in rural communities • Work with local lenders - to offer loan guarantees • 90% guarantee • Banks rates & terms

  40. Community Facility Direct Loans • Fixed Interest Rates usually around 4.5% • Up to 40 Year Terms • Available in communities under 20,000 population.

  41. Grants used to assist lower income rural areas in developing essential public community facilities Very modest funding available in normal yearly funding - $150,000 06/01/2011 usual deadline to request funds from National Office FY 2011 special Economic Impact Initiative grants for qualified counties based on unemployment and poverty levels (not sure of funding). Community Facilities Grants

  42. Are you CF Grant Eligible? • Factors the agency considers • Available resources • Cash flow /budget • Median Household Income • Kadoka, SD – MHI is $26,875 so 35% eligible • Jackson County MHI is $23,945 so up to 55% eligible • Belvidere, SD – MHI is $26,250 up to 35% eligible • Consider service territory of who will be served

  43. Aberdeen (605)224-3360 Mitchell (605)996-1564 Pierre (605)224-8870 Rapid City (605)342-0301 Sioux Falls (605)330-4515 Watertown (605)886-8202 Yankton (605)665-2662 www.rurdev.usda.gov/sd South Dakota RD Office Locations

  44. USDA Rural Development State Office 200 4th Street SW, Federal Building Rm. 210 Huron, SD 57350-2477 (605) 352-1100 or 1-800-670-6553

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