The most common RUS program is the direct water and waste disposal loan and grant program. This program is administered following RUS Instruction 1780. Financial assistance is provided in the means of low-interest loans to develop water and wastewater systems, including solid waste disposal and storm drainage, in rural areas. Priority is given to public entities in areas with less than 5,500 people to restore a deteriorating water supply, or to improve, enlarge, or modify a water facility or an inadequate waste facility. Preference is also given to requests that involve the merging of small facilities and those serving low-income families. The maximum term for all loans is 40 years. Guaranteed loans may be made for the same purpose as direct loans. They are made and serviced by lenders such as banks and savings and loan associations. The guarantee will be 90% of the eligible loss incurred by the lender.Grants may be made in conjunction with loans to reduce user costs to a reasonable level.RUS Instruction 1780 - Direct Loans and Grants RUS Instruction 1779 - Guaranteed LoansLoans may be made to develop water and wastewater systems, including solid waste disposal and storm drainage, in rural areas. Priority is given to public entities in areas with less than 5,500 people to restore a deteriorating water supply or to improve, enlarge, or modify a water facility or an inadequate waste facility. Grants may be made in conjunction with loans to reduce user costs to a reasonable level.1777 - 306-CLoans and grants are available to low-income rural communities whose residents face significant health risks because they do not have access to water supply systems or waste disposal facilities. Grants are available to provide water or waste services to designated colonias in Arizona, California, New Mexico and Texas. Grants may be made in conjunction with loans and up to 100 percent of the eligible project cost.Colonia. Any identifiable community designated in writing by the State or county in which it is located; determined to be a colonia on the basis of objective criteria including lack of potable water supply, lack of adequate sewage systems, and lack of decent, safe, and sanitary housing, inadequate roads and drainage; and existed and was generally recognized as a colonia before October 1, 1989.Funds may be used to: (1) Construct, enlarge, extend, or otherwise improve community water and/or waste disposal systems. Otherwise improve would include extending service lines to and/or connecting residence's plumbing to the system. (2) Make loans and grants to individuals for extending service lines to and/or connecting residences to the applicant's system. The approval official must determine that this is a practical and economical method of connecting individuals to the community water and/or waste disposal system. Loan funds can only be used for loans, and grant funds can only be used for grants. (3) Make improvements to individual's residence when needed to allow use of the water and/or waste disposal system.Note: No loan funds have ever been appropriated under this authority.ECWAG -RUS Instruction 1778Environmental Policies and Intended to assist rural communities when disaster strikes and causes significant decline in the quantity or quality of potable water. rocedures for WWD Programs
USDA Rural Development
United States Department of Agriculture Rural Development Michael B. Canales Director, Community Programs USDA Rural Development, Texas Making a difference Everyday Everyway. . .
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!
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.
Community Facilities Direct Loan ProgramApplicant 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
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
How Can Funds Be Used? Eligible Loan PurposesPurchase real estate and improvements (i.e. buildings)Construction, expansion, renovation, and/orimprovements to essential community facilitiesPurchase of vehicles and major equipmentPurchase an existing facility when necessary toimprove or to prevent a loss of service
How Can Funds Be Used? Eligible Loan PurposesRefinancing debts incurred by, or on behalf of, anapplicant 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.
Rates and TermsDirect loans Three levels of fixed interest rates Poverty, intermediate, marketGuaranteed loans Lender’s customary rate for similar projects May be fixed or variableMaximum 40-year term or useful life of facility – subject toState law or organizational structure
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
COMMUNITY PROGRAMSWater and Environmental Programs
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.
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)
Eligible Applicants Public bodies or governmental entities Nonprofit organizations Native American Tribes
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
Types of Eligible FacilitiesWater 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
Types of Eligible FacilitiesSolid Waste Disposal Storm Wastewater Landfills Disposal Incinerators Collection layout Liners for line improvements Holding ponds Pumping stations Recycling equipment Storage Treatment Line improvements
Grant Eligibility FactorsMedian 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
Grant Eligibility FactorsComparable 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.
Other ProgramsRural Housing ProgramsRural Business & Cooperative Programs
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