Community Water Facility Revolving Loan Fund
The primary use for the Community Water Facility Revolving Loan Fund is supplementary financing in conjunction with the USDA Rural Development (RD). It may be used for community water projects when the expense exceeds the loan limits set by RD.
An applicant may be a city, association, cooperative or corporation operated on a nonprofit basis with the legal authority to construct, operate and maintain water facilities. The entity must demonstrate the ability to repay the loan in accordance with RD requirements.
The borrower must select the most efficient and economically feasible methods for the project. In addition to central water systems, the community water facility may provide for individual usage or for small clusters of users within the central system service area, but who are beyond the physical or economic limits of the central system. Examples of community water projects which qualify include:
- Loans for locating, conserving, controlling, treating and distributing water. These include reservoirs, dams, canals, wells, pumps, treatment plants, mains, pipelines and other associated features necessary to supply water.
- Loans for necessary services prior to RD approval
- Loans to cover operating expenses of projects when the borrower is unable to pay the expenses
The maximum lending limit is 50 percent of the total project cost or the remaining available funds in the revolving account. The fundable project cost shall be established by RD in accordance with their review procedures.
Interest rate: 3.00% fixed interest
These loans are secured by a real estate mortgage or by revenue bonds or warrants.
The maximum term of a loan may not exceed 40 years. BND may defer interest and principal for up to three years to give a project time to be self-supporting. Thereafter, BND will establish a simple amortization schedule for the remaining term of the loan.