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USDA Rural Development BACKING THE BUSINESS OF RURAL AMERICA.

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Presentation on theme: "USDA Rural Development BACKING THE BUSINESS OF RURAL AMERICA."— Presentation transcript:

1 USDA Rural Development BACKING THE BUSINESS OF RURAL AMERICA

2 USDA Rural Development’s Mission Increase economic opportunity Create and maintain jobs Enhance quality of life in our rural communities

3 Building Your Community From the Ground Up Business –growth and establishment of local businesses and cooperatives Community Facilities – programs and technical assistance for schools, health clinics and emergency response facilities Housing –homeownership and development of affordable rental housing

4 Impact of Nebraska Rural Development $243 Million in Nebraska for FY10 (est.) - Business Programs – $82 Million - Community Programs – $77 Million - Housing Programs – $84.2 Million More than $1 Billion Invested in Nebraska Since 2000

5 Guarantees Working for You Rebalance your customer’s balance sheet Better financing for building relationships Share the risk of expanded financial solutions Boost your lending limit to be more competitive

6 Benefits of Rural Development B&I Guarantees Guarantees available up to $25 million Guarantee percentages up to 90% Affordable guarantee fee of 1-2% Some programs have minimal annual renewal/servicing fees Customary origination and servicing fees allowed Premium returns from secondary market $7.5 million loan approval in state

7 Sioux Dawes Box Butte Scotts Bluff Sheridan Banner KimballCheyenne Morrill Garden Deuel Cherry GrantHookerThomas Arthur McPherson Loga n Keith Perkins Lincoln Chase Dundy Hayes Hitchcock Red Willow Frontier Brown Rock Keya Paha Boyd Holt Blaine Knox Antelope Pierce Cedar Dixon Wheeler Greeley Nance Boone Madison Stan- ton WayneThurston Dakota Richardson Pawnee Jefferson ThayerNuckoll s ClayFillmor e Hamilton York Seward Johnso n Nemaha Otoe Cass Saline Gage Lancaster Butler PolkSarpy Douglas Saunders Wash- ington DodgeColfaxPlatte Cuming Burt Loup Garfield Custer Valley ShermanHoward Dawson Buffalo Hall Gosper Furnas Harlan Phelps Franklin Kearney Adams Merrick Rural Development Area Offices FY 2010 Webster Scottsbluff Area Office Brenda Darnell, Area Director Marla Marx, Area Specialist 818 Ferdinand Plaza, St. B Scottsbluff, NE Phone : (308) Norfolk Area Office Dale Wemhoff, Area Director Korey Young, Area Specialist 1909 Vicki Lane, Suite 103 Norfolk, NE Phone : (402) Lincoln Office Roger Meeks, Area Director Jenny Nelson, Area Specialist 8000 S 15th Street, St. E Lincoln, NE Phone : (402) State Office – Lincoln Business Program Director Deb Yocum, BP Energy Coord. Joan Scheel, BP Specialist Deborah Drbal, B&C Specialist Room 152, Federal Building 100 Centennial Mall N. Lincoln, NE Phone : (402) Kearney Area Office Paul Bartlett, Area Director Kelley Messenger, Area Specialist th Ave, Suite 1 Kearney, NE Phone : (308) Ainsworth Area Sub Office Mary Gambill, Area Specialist 731 E. 4th Ainsworth, NE Phone : (402) North Platte Sub Office Lory Cappel, Area Technician 1202 S. Cottonwood, Suite 3 North Platte, NE Phone : (308)

8 USDA Rural Development The Guarantee Programs

9 The Programs – Business & Industry (B&I) % of Loan Guaranteed Up to 80% Loan Amounts Up to $25 million; $7.5 million approval in state Loan Terms Real Estate – 30; Machinery & Equipment – 15; Term Working Capital – 7 FeesOne-time guarantee fee of 2% (1% in special cases) Annual renewal fee of 0.25% on outstanding balance Loan Uses New construction, equipment, expansion, working capital and debt restructuring Borrower Types New or existing businesses. Business does not have to be headquartered in the rural community, just conducting business there. Community size Population up to 50,000

10 Business & Industry Success Story – Transfer of ownership Existing owner retained as employee to ensure success Guarantee allowed bank to finance the deal Extended terms provided benefit to borrowers Retention of 3 employees

11 The Programs – Energy % of Loan Guaranteed Up to 85% Guaranteed portion up to 75% of total eligible project costs Loan Amounts Minimum: $5,000. Maximum: $25 million Grant Amounts Efficiency projects $1,500 to $250,000; up to 25% Renewable projects $2,500 to $500,000; up to 25% Loan Terms Real Estate – 30; Machinery & Equipment – 20; Term Working Capital – 7 FeesOne-time guarantee fee of 1%. Annual renewal fee of 0.25% on outstanding balance Loan Uses Purchase and installation of renewable energy systems or improvements in energy efficiency Borrower Types Farmers, ranchers, livestock operations, rural electric cooperatives and rural small businesses Community size Population up to 50,000

12 Energy Success Story – Mr. J’s Affiliated Foods, Burwell Energy Efficiency Improvements Replacement of Freezers and Compressors 62% Energy Savings 8 Year Payback Project Costs – $16,800 –Grant $3,200 –Bank Loan $13,600

13 The Programs – Community Facilities (CF) % of Loan Guaranteed Up to 90% Loan Amounts Based on project; no maximum; the amount is based on project feasibility, reasonable project costs & cash flow Loan Terms Limited to useful life of security; maximum 40 years Fees1% of guarantee; no renewal fee Loan Uses Land acquisition, construction, expansion or improvement, equipment, fixtures, legal and other professional fees Borrower Types Public bodies, not-for-profit organizations and Indian tribes Community size Population up to 20,000

14 Community Facility Success The Siouxland Y – Norm Waitt Sr. YMCA Fitness Recreational Facility Community Support Expanded Services Estimated Cost – $10.9 MM -Guarantee $3.8MM -Pledges & $7.1MM Donations

15 The Programs – Home Ownership % of Loan Guaranteed 90% Guarantee Loan Amounts There is no maximum mortgage or loan limits 100% financing, No PMI Loan Terms 30 years, fixed rate FeesOne-time 2% guarantee fee Loan Uses Construct new (stick built, modular or manufactured) or the purchase an existing single family home, including modular homes. Funds for repairs can be included with the purchase of an existing home. Borrower Types Individuals and households Community size Populations up to 20,000 and Norfolk & Columbus

16 Home Ownership Success Story – David & Karrie Huryta, Ravenna Making Homeownership a REALITY Teamwork Approach –City –Contractor –Lender –USDA Rural Development Financing with USDA guarantee Guarantee – $82,235

17 The Programs – Rental Housing % of Loan Guaranteed Up to 90%. Loan Amounts No maximum or minimum loan amounts Interest credit is not available in FY 2009 Loan Terms Minimum 25 years; maximum 40 years; max 40 year amort. 90% LTV for profit and 97% for non-profits FeesFor loan guarantees obligated under the 2009 NOFA, there will be no guarantee fees Loan Uses New construction or purchase of existing building with rehab needs Borrower Types Individuals, partnerships, non-profit and for-profit corporations, and limited liability companies Community size Populations up to 20,000 and Norfolk and Columbus

18 Rural Rental Housing Success Kelley Creek Apartments, McCook 24 units Assist low and moderate income families Total project costs, $1.8MM –Guarantee of tax exempt bonds$928M –DED - Trust $459M –Tax Credits $260M –Owner$140M

19 American Recovery and Reinvestment Act Available Funds Housing –502 Direct –502 Guaranteed (funding 100% utilized) Community Programs –CF Direct Loan & Grant Utilities –Broadband Investment Loans & Grants Business Programs –Business & Industry--funding 100% used –Rural Business Enterprise Grants

20 Meeting Your Needs! $7.5 million in-state approval authorities Quick approval turnaround High loan limits Local customer service BACKING THE BUSINESS OF RURAL AMERICA

21 Building Communities from the Ground Up

22 USDA Rural Development BACKING THE BUSINESS OF RURAL AMERICA USDA Rural Development is an Equal Opportunity lender, Provider and Employer. Complaints of discrimination should be sent to USDA, Director, OCR, Washington, DC


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