Small Town News

Loan programs available to help rural development in state

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The Rural Development Finance Corporation announces two new loan programs to help North Dakota rural development organizations who finance local development projects to build their financial capacity. The first program will assist with Bank of North Dakota PACE and Flex PACE community participation in interest buy downs, and the second will provide loans in participation with other lenders.

The PACE/Flex PACE loan program will lend funds to local development groups at 0 percent to help fund the community participation percentage as defined by the Bank of North Dakota. RDFC will lend up to 50 percent of the local share of the interest buy down, but no more than $10, 000 per project. Repayment will be tailored to the lead lender's original loan terms and Bank of North Dakota restrictions on repayment.

"Communities had indicated they would like to use the PACE and Flex-PACE more frequently, but lacked the funds at the local level, " said RDFC President Terryl Jacobs. "This program has been tailored to help more communities use these popular Bank of North Dakota programs."

The Participation Loan program allows RDFC to participate with a lead lender in a community-based loan. These loans may not exceed 50 percent of the total financing package, or $25, 000 --whichever is less -- per project. The interest rate will be 2 percent for business loans and 1 percent for community essential service projects (i.e., fire protection, emergency services, etc.). The maximum loan term will be 10 years.

The lead lender can be any qualified financial institution, most notably a bank, savings and loan, or credit union, or local revolving loan funds, regional council programs, etc. The lead lender will be responsible for servicing the loan.

"RDFC wants to grow and enhance the local capacity to spur development in our local communities and regions, " said RDFC President, Terryl Jacobs. Our first participation loan with Garrison State Bank in Garrison, ND was used to fund improvements at Ft. Stevenson State Park on Lake Sakakawea. The loan helped meet a local need to preserve over $2 million in annual economic impact from the marina."

Eligible North Dakota communities must be under 5, 000 in population with the suburban communities in the state's metro areas excluded. Casselton, Lincoln, Burlington, Thompson, Horace, Harwood, Surrey, Sawyer, Manvel, Frontier, Reiles Acres, Oxbow/Hickson, Wild Rice, Briarwood, Prairie Rose, Mapleton, and North River are not eligible for the programs at this time.

Application information will be made available to all local development groups, regional councils, banks, and local electric and telephone cooperatives. Contact Pat Downs, ND Association of Rural Electric Cooperatives at 701-356-1049 with questions.



Copyright 2010 Turtle Mountain Star, Rolla, North Dakota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

© 2011 Turtle Mountain Star Rolla, North Dakota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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