Application Notes:

Prior to submitting an application, applicants must contact the appropriate state business programs director listed online at www.rd.usda.gov/page/state-offices.

Applications are accepted on a rolling basis.

Regulated lenders must email applications to the appropriate local state office listed online at www.rd.usda.gov/browse-state. Non-regulated lenders must email applications to the appropriate address provided in the Contact section.

Regulated lender applications must include:

• Applications for loan guarantee form
• Lender's agreement form

Non-regulated lender applications must include the introductory cover letter. Additional application components will be provided upon submission of the cover letter.

Applications will be evaluated according to criteria in the following categories:

• Population priority
• Location priority
• Guaranteed loan features
• High-impact business development investment priorities
• Administrative priorities

Refer to pages 250-253 of the FinalRule file for additional information regarding application evaluation criteria.

Refer to the NOFA and FinalRule files and the Application folder for additional application information.

Match Notes:

There are no stated matching requirements for this program.

Loan fees will apply as follows:

• Initial guarantee fee: 3 percent of the guaranteed amount
• Periodic guarantee retention fee: 0.55 percent of the guaranteed portion of the outstanding principal balance
• Issuance of loan note guarantee prior to construction completion fee: 0.5 percent

Reduced loan fees may also apply as follows:

• Initial guarantee fee: 1 percent of the guaranteed amount
• Periodic guarantee retention fee: 0.5 percent of the guaranteed portion of the outstanding principal balance
• Issuance of loan note guarantee prior to construction completion fee: 0.5 percent

Refer to pages 3-4 of the NOFA file for additional information regarding fees, including for projects in high-cost, isolated rural areas of the state of Alaska that are not connected to a road system.

Reasonable and customary fees for loan origination are negotiated between the borrower and lender.

Borrowers must provide collateral with documented value sufficient to protect the interests of the lender and of the funding agency. Discounted collateral value will normally be at least equal to the loan amount. Collateral will be discounted by the lender consistent with a sound loan-to-value policy.

Lenders will conduct a credit evaluation using credit documentation procedures and underwriting processes that are consistent with generally accepted prudent lending practices and also consistent with the lender’s own policies, procedures, and lending practices, as detailed on pages 7-8 of the NOFA file.

Funding Notes:

An unspecified amount of funding is available to support guarantees of loans obtained through private lenders through this program. The loan guarantee percentage is 80 percent. The maximum loan amount is generally $25 million; however, the funding agency may award loans of up to $40 million for rural cooperatives that process value-added agricultural commodities.

Interest rates are negotiated between the lender and borrower. Rates may be fixed or variable; however, variable interest rates may not be adjusted more often than quarterly.

The loan term is limited to 40 years.

Funds may not be used for:

• Lines of credit
• Owner-occupied and rental housing
• Golf courses or golf course infrastructure
• Racetracks or gambling facilities
• Agricultural production, with certain exceptions detailed on page 8 of the NOFA file
• Distribution or payment to a beneficiary of the borrower, or an individual or entity that will retain an ownership interest in the borrower
• Timeshares, residential trailer parks, apartments, duplexes, or other residential housing where the primary purpose is independent housing, or housing development sites
• Projects eligible for funding under B&I that are in excess of $1 million that meet the criteria on page 168 of the FinalRule file

Refer to pages 164-166 and 175-176 of the FinalRule file for additional information regarding ineligible costs.

For FY 2023, two loans of $614,226 and $12,810,490 were provided through this program. In May 2022, loans ranging from $180,000 to $25 million were provided. In February 2022, loans totaling $1,151,281,875 were provided. Refer to the Award file for details.