Maximizing Opportunities for Rural Community Development

1. Maximizing Opportunities for Rural Community Development • Increasing Economic Development • Enhancing the Quality of Life

2. Rural Development = Economic Development Over 40 Loan and Grant Programs Business - Creates jobs by funding and growing businesses Community Facilities - Addresses needs for community infrastructure such as police, fire and rescue stations, hospitals, libraries, schools and town halls Utilities - Addresses needs for basic services like clean water, sewers and waste disposal, electricity, and telecommunications/broadband Housing - Works to eliminate substandard housing by helping people buy, rent or build decent housing

3. Business & Industry Guaranteed Loan Program • The primary goal of this program is to help create and retain jobs in rural communities by bolstering the availability of private credit by guaranteeing loans for rural businesses. • Eligible “Rural” Area= Any area other than a city or town with a population greater than 50,000 inhabitants, and the urbanized area of that city/town per last decennial U.S. census (2010). • Eligible Borrowers: • Any legal entity, Federally recognized tribal groups, public bodies, cooperative organizations, individuals, and some nonprofits (check with RD*) • Individual borrowers must be U.S. citizens or legal permanent residents. Private entity borrowers must demonstrate loan funds will remain in the U.S. and the project will primarily create/retain jobs for rural U.S. residents.

4. Business & Industry Guaranteed Loan Program • Funds can be used for: • Business conversion, enlargement, repair, modernization or development • Purchase and development of land, easements, rights-of-way, buildings or facilities • Purchase of equipment, leasehold improvements, machinery, supplies or inventory • Debt refinancing when refinancing improves cash flow and creates or saves jobs • Business and industrial acquisitions when the loan will create or save jobs • Maximum amount of guarantee: • 80% for loans of $5 million or less • 70% for loans between $5 and $10 million • 60% for loans exceeding $10 million, up to $25 million

5. Rural Energy for America Program (REAP) • Provides guaranteed loan financing and grant funding to agricultural producers (at least 50% of gross income must come from ag operations) and rural small businesses for renewable energy systems or to make energy efficiency improvements. • Renewable Energy System (RES) = solar, wind, geothermal, biomass, etc. • Energy Efficiency Improvement (EEI) = high energy HVAC, insulation, lighting, cooling/refrigeration units, doors/windows, replacement of energy-efficient equipment

6. Rural Energy for America Program (REAP) • Guaranteed Loans • Min $5,000 / Max $25 million – up to 75% of total eligible project costs * • Grants • Renewable Energy Systems = 25% of project cost/$500,000 maximum • Energy Efficiency Improvements = 25% of project cost/$250,000 maximum • *Combined guaranteed loan and grant funding up to 75% of eligible project costs maximum

7. Community Facilities Program • Provides affordable financing to develop essential community facilities • in eligible rural areas. • An essential community facility is defined as a facility that provides an essential service to the local community for the orderly development of the community and does not include private, commercial or business undertakings. • Eligible “Rural” Area = Unincorporated areas and cities/towns with no more than 20,000 residents. • Eligible applicants: Public bodies, public non-profit corporations, Federally-recognized Tribes

8. Community Facilities Program • Funds can be used to purchase, construct, and/or improve essential community facilities, purchase equipment, and pay related project expenses. • Examples of essential community facilities include: • Health care facilities such as hospitals, medical clinics, dental clinics, nursing homes or assisted living facilities • Public facilities such as town halls, courthouses, airport hangars or street improvements • Community support services such as child care centers, community centers, fairgrounds or transitional housing • Public safety services such as fire departments, police stations, prisons, police vehicles, fire trucks, public works vehicles or equipment • Educational services such as museums, libraries or private schools • Utility services such as telemedicine or distance learning equipment • Local food systems such as community gardens, food pantries, community kitchens, food banks, food hubs or greenhouses

9. Community Facilities Program • Funding available: • Long-term, low-interest direct loans • Up to 40-year payback, based on useful life of the facility financed • Fixed interest rate, based on need for project and median household income of area served • Grants* • Loan Guarantees • *Grant funding is extremely limited. Small communities with a population of 5,000 or less and low-income communities having a median household income below 80% of the state nonmetropolitan household income ($43,673) receive highest priority for grant funding. In most instances, projects which receive grant assistance are highly leveraged with other loan and grant awards.

10. Water and Environmental Program Provides funding for clean and reliable drinking water systems, sanitary sewage disposal, sanitary solid waste disposal, and storm water drainage to entities that serve rural households and businesses. Eligible “Rural” Area = Unincorporated rural areas and cities/towns with no more than 10,000 residents. Eligible applicants: Public bodies, private non-profit corporations, Federally-recognized Tribes

11. Water and Environmental Program • Funds may be used to finance the acquisition, construction or improvementof: • Drinking water sourcing, treatment, storage anddistribution • Sewer collection, transmission, treatment anddisposal • Solid waste collection, disposal andclosure • Storm water collection, transmission anddisposal • In some cases, funding may also be available for related activities suchas: • Professional services (engineering, environmental consultant, legalfees) • Land acquisition, water and land rights, permits andequipment • Start-up operations andmaintenance • Interest incurred duringconstruction • Purchase of facilities to improve service or prevent loss ofservice

12. Water and Environmental Program • Funding available: • Long-term, low-interest direct loans • Up to 40-year payback, based on useful life of facilities being financed • Fixed interest rate, based on need for project and median household income of service area • Grants* • Loan Guarantees • *If entity is eligible and funds are available, a grant may be combined with a loan if necessary to keep user costs reasonable, provided there is a demonstrated financial need for grant assistance.

13. Affordable, Decent & Safe Housing “A Place to Live” • Section 502 Single Family Housing Loans • Assists applicants in obtaining decent, safe and sanitary housing in eligible rural areas. Funds can be used to build, repair, renovate or relocate a home. • Eligible “Rural” Area = Generally, unincorporated areas and cities/towns with no more than 10,000 residents. • Direct Loans: • Low and very-low income families/households • Owner-occupied • May provide payment subsidy • Up to 100% financing (no down-payment) • Guaranteed Loans: • Moderate-income families/households • Owner-occupied • Up to 100% financing (no down-payment)

14. Affordable, Decent & Safe Housing “A Place to Live” • Section 504 Single Family Housing Repair Loans & Grants • Provides assistance to repair, improve or modernize homes • Applicants must own their home and the property it sits upon • Very-low income families/households • Loans up to $40,000 • If 62 and over, potential for grant up to $10,000 • (grants must be for health and safety issues) Examples of eligible use of funds: • New Roofs • Weatherization • Leveling of home • Electrical or plumbing repairs • Septic systems • Water wells • Accessibility

15. Affordable, Decent & Safe Housing “A Place to Live” • Section 515 Rural Rental Housing • Provides affordable multi-family rental housing for low-income, elderly, or disabled individuals and families in eligible rural areas. Rental subsidy may be available to tenants. • https://rdmfhrentals.sc.egov.usda.gov/RDMFHRentals/select_state.jsp • Multi-Family Housing Loan Guarantees • Works with qualified private-sector lenders to provide financing to qualified borrowers to increase (build or preserve) the supply of affordable rental housing for low- and moderate-income individuals and families in eligible rural areas and towns. • Eligible “Rural” Area = Rural areas and towns with 35,000 or fewer people • Eligible borrowers: Most state and local governmental entities; Nonprofit organizations; • For-profit organizations, including LLC’s; Federally-recognized Tribes

16. USDA - Texas

17. ContactInformation Local Area Office Hillsboro Area Office 1502 Highway 77 North Hillsboro, Texas 76645 Phone – 254-582-7328 x 4 Fax – 844-496-7984 www.rurdev.usda.gov/tx Rural Eligibility determination website: https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do USDA is an equal opportunity provider, employer, and lender.