Qualifications for Rural Housing Service Community Facility Loan

A rural loan through the Community Facility loan program helps rural communities build essential facilities. This includes hospitals, schools, medical clinics, police and fire departments. The program is administered through the U.S. Department of Agriculture (USDA) and provides both loan guarantees and direct loans. The loans are available to any rural government, not-for-profit organization and American Indian tribe residing in a rural community.

Qualifications Basis

Qualifications for guaranteed or direct loans are based on several factors. Since the money made available through the program can fund both new and existing projects within a rural community, a lender will require certain documentation to determine whether funding the project is in the interest of the community and is a good use of funds.

Feasibility Study

The funding programs require a feasibility study conducted by an independent consultant. The study provides information about a proposed or existing project, the use of the funds and how the project affects the community. The feasibility study provides lenders with the information necessary to make the loan.

Project Location

A project seeking funding must be in a rural community as determined by the USDA. The loan amount is used for specific community facilities that provide general services and other community based programs for the benefit of its residents. Given the remoteness of some rural communities, the proceeds from either the guaranty or direct loan programs can provide an important funding source to fund an essential community service.

Direct and Guaranteed Loan Programs

Other qualifications for the program are established by the lender providing the loan in the case of the guaranteed loan. The direct loan program will take the feasibility study provided by the outside independent consultant and with the application use the information to arrive at a decision within 45 days. This decision may include a request for additional or supporting information necessary to determine whether to go ahead with the loan. Private lenders participating in the loan guarantee for community facilities may require credit and other qualifications for the borrower when making a loan for a new facility.

A rural community, not-for-profit agency or American Indian tribe interested in applying for either the Community Facilities Direct Loan or Guaranteed Loan programs should check out the information provided by a private lender or the USDA. This information can give specific requirements regarding loan qualifications for a loan made from the USDA or through a private lender.