As part of the national Rural Community Assistance Partnership, Rural Community Assistance Corporation (RCAC) offers an innovative loan program through its Loan Fund to serve the water and wastewater financing needs of rural communities in 13 western states: Alaska, Arizona, California, Colorado, Hawai’i, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming. RCAC strives to work with communities and projects that are underserved by conventional financial institutions.
Eligible projects include water, wastewater, solid waste and storm water facilities that primarily serve low-income rural communities. Eligible applicants are nonprofit organizations, public agencies and tribal governments.
RCAC offers short (1-3 years), intermediate (up to 20 years), and long-term loans. Short term loan limits range from $50,000 for pre-development to $2 million for construction. Intermediate term loans are available for up to $100,000 and can be used for smaller capital needs. Long-term loans are available to projects that meet the requirements of the USDA Rural Utilities Service Water and Waste Disposal Guaranteed Loan Program. Long-term loans are generally used when system improvements are needed if the system does not have priority to qualify for more favorable funding sources. RCAC encourages incorporation of water and energy savings features in new or rehabilitation projects. Loan applications meeting “green” criteria are given funding priority.
There is a 1 percent loan fee for all loans and rates vary, but are generally in the 5 percent range for short term and intermediate loans. For long-term loans, there is an additional 1 percent guarantee fee on the guaranteed portion of the loan (generally 90 percent). Long-term loan interest rates are generally 2-3 percent more than short term rates.
In 1996, RCAC was certified as a Community Development Financial Institution (CDFI) and now operates a successful loan fund with more than $65 million in lending capital. In addition to water and wastewater systems, the Loan Fund finances affordable housing and community facilities and is piloting small business lending programs in select communities. For more information, contact RCAC at 916-447-2854 or visit the website at http://www.rcac.org to get in touch with your local RCAC loan officer.
At the national level, the Rural Utilities Service awarded a total of $248,500 for FY 2010 Revolving Loan Fund grants to the RCAP network. The RCAP network has received RUS grants in FYs 2004, 2006, 2009 and 2010. Since inception, the program has closed 58 loans totaling $3,669,007. These funds have made loans to water and wastewater borrowers in 19 states across the nation.