Newsroom

Date:11/29/04

USDA Rural Development Loans Available

USDA-Illinois

lf you are looking for long term low interest rate financing to construct, expand or improve buildings and to purchase equipment and vehicles USDA Rural Development can help. Direct loans, loan guarantees and for small projects in lower income areas grants are available under the Community Facilities program. Projects in open country and in towns of 20,000 population or less may apply.

USDA Rural Development has the resources to finance a wide variety of qualifying projects. Last year, Rural Development in Illinois offered funding of more than $31 million for 28 projects ranging in size from $6,000 to$7.3 million.

Who is eligible? Non profit corporations and public bodies such as villages; townships; hospitals; fire protection and library districts and others with authority to borrow money and to own and operate a facility.

What types of facilities are financed? Hospitals, assisted living facilities, clinics, doctors' buildings, fire stations, ambulance garages, fire and rescue equipment and vehicles, senior centers, group homes, laptops for police cars, libraries and many others.

How are loans repaid? Usually from regular project income. As an example, fire protection districts make payments from annual tax levy income; some public bodies issue debt certificates and repay loans from their general fund or issue revenue bonds.

Is everyone eligible for a loan? Those able to get affordable financing from conventional sources must do so, and, of course, those with no source of loan repayment cannot be given a loan.

What is the interest rate and loan term? Interest rates on direct loans are currently between 4.5 and 5.5% based on the income of the project area. The interest rate on guaranteed loans is negotiated between the lender and borrower. Loan terms can be as long as 40 years but not to exceed the useful life of the facility or equipment. USDA is an equal opportunity lender.

Are funds available? Funds for direct and guaranteed loans are usually available. Grant funds are limited, but eligible applicants are encouraged to apply.

Tell me more about the grant program. Last year about 2% of our funds went for grants. Funds are limited to lower income areas for small projects and equipment and vehicles and are offered as a percentage of the project cost from 75% to 0% based on the income and population of the area. Last year, our 14 grants ranged in size from $6,000 to $100,000.

How do I get started? Contact your Area or Local USDA Rural Development office. Area Offices are located in Princeton, Galesburg, Jacksonville, Champaign, Effingham, Salem, Nashville and Harrisburg. Or contact the USDA Rural Development State Office at 217-403-6214 or email Gerald Townsend or Karen Lee.

What about websites? http://www.rurdev.usda.gov/i and http://www.rurdev.usda.gov provide more information about these and our housing, water and waste disposal and business programs.

2118 West Park Court, Suite A
Champaign, IL 61821
217-403-6200 - Fax 217-403-6215 -TTY 217-403-6240
Rural Development is an Equal Opportunity Lender, Provider, and Employer. Complaints of discrimination should be sent to USDA, Director, Office of Civil Rights, Washington, D. C. 20250-9410