USDA Rural Development presentation at LCRA's Economic Development Forum in Austin on December 16th 2011.

1. United States Department of Agriculture
Rural Development
Michael B. Canales
Director, Community Programs
USDA Rural Development, Texas
Making a difference Everyday
Everyway. . .

2. Did you know that an ENTIRE community can
be built with funding from ONE Agency?
“How can this be possible?”
Let us SHOW you what WE CAN DO!

3. Community Facilities Programs
Programs designed to develop essential
community facilities and services for public
use in rural areas.
Schools, libraries, child care, hospitals, clinics,
assisted living facilities, fire and rescue
stations, police stations, community centers,
public building, etc.

4. Community Facilities Direct Loan Program
Applicant and Project eligibility are the same as the
Guaranteed Loan program
Municipal Entity
Broadly Based Non-Profit
Federally Recognized Tribal Entity
Located in a rural area with a population of 20,000 or
less

5. Grants
• Grant percentage determined by:
- Population
- Income
• Maximum grant allowed is 75% of total project cost,
if eligible
- Grant funds from all Federal sources
cannot exceed 75% of project cost
• Average grant amount $45,000

6. How Can Funds Be Used?
Eligible Loan Purposes
Purchase real estate and improvements (i.e. buildings)
Construction, expansion, renovation, and/or
improvements to essential community facilities
Purchase of vehicles and major equipment
Purchase an existing facility when necessary to
improve or to prevent a loss of service

7. How Can Funds Be Used?
Eligible Loan Purposes
Refinancing debts incurred by, or on behalf of, an
applicant when all of the following conditions exist:
•debts being refinanced are a secondary part of the
total loan, (less than 50 percent);
•debts were incurred for the facility;
•arrangements cannot be made with creditors to
extend or modify terms in order to cash flow.

8. Rates and Terms
Direct loans
Three levels of fixed interest rates
Poverty, intermediate, market
Guaranteed loans
Lender’s customary rate for similar projects
May be fixed or variable
Maximum 40-year term or useful life of facility – subject to
State law or organizational structure

9. Lender Benefits
•90% guarantee in the event of a loss
•A reduction in capitalization requirements
•Loan may be sold on the secondary market
•Lender’s own documents
•No loan limit
•Short approval time

10. COMMUNITY PROGRAMS
Water and Environmental Programs

11. Program Objectives
* Develop infrastructure in rural communities which
promote rural economic development and improve
public health, safety and overall quality of life.
* Provide affordable financial assistance to rural areas
and towns to develop water supply, sewage,
stormwater, and solid waste disposal systems.

12. Water and Waste Disposal
Programs
• Water and Waste Disposal (WWD) Loans
and Grants
• Water and Waste Facility Loans and
Grants to Alleviate Health Risks (Section
306C Program)
• Emergency Community Water Assistance
Grants (ECWAG)

13. Eligible Applicants
 Public bodies or governmental entities
 Nonprofit organizations
 Native American Tribes

14. Eligible Applicants
• Must serve rural areas
Cities, towns, or unincorporated areas that have a
population of 10,000 or less inhabitants.*
Eligible facilities must serve rural areas only.
WWD loans and grants must finance only the portion
of facilities serving rural areas, but the facilities may
be located in non-rural areas.
*based on 2000 Census data for Texas

15. Types of Eligible Facilities
Water Waste
Wells Wastewater
treatment plants
Water supplies
Sewer collection
Water distribution lines
lines
Water storage tanks
Collection tanks
Water testing equipment
Monitoring
Computers equipment
Buildings Effluent

16. Types of Eligible Facilities
Solid Waste Disposal Storm Wastewater
Landfills Disposal
Incinerators Collection layout
Liners for line
improvements
Holding ponds
Pumping stations
Recycling equipment
Storage
Treatment
Line
improvements

17. Grant Eligibility Factors
Median Household Income (MHI) of service area
MHI must be less than 80% of the state non-
metropolitan MHI ($32,682*) to qualify for up to 75%
grant and/or the poverty rate of interest.
MHI must be less than the state non-metropolitan
MHI for the state ($40,853*) to qualify for up to 45%
grant and the intermediate rate of interest.
If MHI exceeds state non-metropolitan MHI
($40,853*) applicant qualifies for market rate of
interest … no grant consideration.
*based on 2000 Census data for Texas

18. Grant Eligibility Factors
Comparable System Costs
Grant assistance may not be used to lower the
user cost of the service below that provided by
similar systems.
Availability of Funds
Even though an applicant may meet all the
requirements for a grant, the actual grant they
receive may be limited by the amount of funds
available from the WWD allocation, the amount of
cash on hand, or the amount of funding from other
sources that is available for use in the project.

19. Other Programs
Rural Housing Programs
Rural Business & Cooperative Programs

20. How To Learn More About USDA Rural Development
Contact Your State Rural Development Office
http://www.rurdev.usda.gov/recd_map.html
Michael B. Canales
Phone: 254-742-9789
E-mail: Michael.Canales@tx.usda.gov