Community Facilities Program

Mon, 05/24/2010 - 12:52 — Web Editor

Community Development

Examples | How Does it Work? | Entrepreneurship Opportunities | Resources | Learn More

The Community Facilities Grant Program provides grants, loans, and loan guarantees to support the construction, purchase, development or renovation of essential community facilities for public use in rural communities with populations of 20,000 or less. These facilities can include schools, libraries, childcare, hospitals, medical clinics, assisted living facilities, fire and rescue stations, police stations, community centers, public buildings and transportation.

Projects that support local and regional food systems that may qualify, include farmers markets, school kitchens and community kitchens, community food banks, food storage and distribution centers or food preparation centers.

Examples

Eagle Grove Community Child Care Center. Photo courtesy of the USDA.

Eagle Grove Community Child Care Center - The Community Facilities Direct Loan Program lent $300,000 to the town of Eagle Grove, Iowa, as part of financing for a complete early childhood facility. It included a childcare center with infant care, a preschool, before- and after-school care, Head Start rooms, and a community meeting room. The center has the capacity to care for 126 children.

Alaskan Health Clinic Project - The Community Facilities Grant Program provided a $74,000 grant to complete a much-needed clinic in Wales, AK. Wales is a very isolated native village whose only access to the outside world is by small plane or by sea. The residents of this isolated village will now have much-needed medical care, helping them to survive a medical emergency even in severe weather conditions.

The Cangleska women's and childrens' center in South Dakota.

Buena Vista Township Emergency Medical Services - The Community Facilities Direct Loan Program lent $32,500 to the Buena Vista township in New Jersey for the purchase of a used ambulance, and a Community Facilities grant provided $17,500 for additional emergency medical equipment.
Cangleska, Inc. - The Community Facilities Direct Loan Program lent $500,000 and guaranteed an additional loan of $500,000 for construction of a women's shelter and children's center for those affected by domestic violence on the Pine Ridge Reservation in South Dakota. The 7,800 square foot facility can house up to 36 women and children.

How Does It Work?

The Community Facilities Program has three tools to help rural communities:

Grant Program (link requires Internet Explorer) provides grants to muniticalities, counties, tribal governments and nonprofits for essential community facilities. Applicants located in small communities with low populations and low incomes will receive a higher percentage of grants. Grants can only cover up to 75% of the project cost.
Direct Loan Program (link requires Internet Explorer) can lend to applicants who are unable to obtain commercial credit. Feasibility studies are normally required when loans are for start-up facilities or significant changes to existing facilities. Three levels of interest rates are available (poverty, intermediate, and market), each on a fixed basis. The Direct Loan Program has a two-step application process.
Guaranteed Loan Program (link requires Internet Explorer) provides a credit enhancement that guarantees the lender up to 90% of loss of principal and interest on loans made to develop or improve essential community facilities in rural areas.

Projects are selected based on a priority point system. Projects that will receive priority are those that:

Serve small communities - with the highest priority going to projects located in a community with a population of 5,000 or less.
Serve low-income communities - with the highest priority going to projects serving communities with median household incomes below the higher of the poverty line or 60% of the state non-metropolitan median household income.
Provide healthcare, public safety, or public and community services

Eligibility
Applicants must:

Be public entities such as municipalities, counties, and special-purpose districts or nonprofit corporations or tribal governments;
Have the legal authority to borrow and repay loans, pledge security for loans, and construct, operate, and maintain facilities;
Have the ability to manage the facilities effectively;
Be financially sound, need funds at reasonable rates and terms;
Demonstrate that the proposed community facility has substantial community support.

Applications are accepted on an ongoing basis and are filed with the USDA Rural Development field offices. Click here to see where your nearest office is.

Definitions

Essential Community Facilities - A list of qualified community facilities is here (link requires Internet Explorer) though the USDA website Know Your Farmer, Know Your Food suggests that projects that support local and regional food systems may also be eligible.

Entrepreneurship Opportunities

Libraries and schools are critical resources to entrepreneurs and to communities. This program would loan or grant money to a community for building, purchasing, or renovating a public library, vocational school, college or public school.
Schools need equipment to store and prepare healthy, local food for school lunches. Having a school as an available market is an entrepreneurial opportunity for farmers and individuals interested in small-scale food distribution.
Medical clinics, day care facilities and nursing homes are vital infrastructure for rural communities so residents can remain in their communities. All of these facilities are also opportunities to create jobs and allow more elderly and families to live in small towns.
Farmers markets and agricultural fairgrounds not only increase food access and knowledge about farming, but also provide a place for communities to come together. While the market or fairground itself would be owned by the community, it provides an opportunity for entrepreneurs to sharpen their business skills.