This directory provides descriptions and contact information for a number of organizations and Web sites that can provide resources to banks interested in lending, investing, or providing retail financial services in rural communities. These activities are organized under following:
Community Development Financial Institutions (CDFI) Fund stimulates the creation and expansion of CDFIs by providing incentives to traditional banks and thrifts through the Bank Enterprise Act awards program. The CDFI Fund also provides relatively small infusions of capital to institutions that serve distressed communities and low-income individuals. Technical assistance grants are also provided to strengthen the capacity of community development financial institutions. Banks can partner with CDFIs to better meet borrower needs.
Small Business Administration (SBA) administers direct loan and loan guarantee programs for developing and expanding small businesses. Additionally, the SBA administers the Small Business Development Centers (SBDCs) designed to offer business development assistance to entrepreneurs. SBA's Web site contains information on:
The National Council of State Agricultural Finance Programs (NCOSAFP) provides national representation for states that operate finance programs for farmers, ranchers and the agricultural industry. Organized in November 1984, the NCOSAFP is a non-profit organization that provides a forum for sharing ideas and serves as an information clearinghouse for its member state agencies and the general public they serve. The council is also involved in the promotion and support of rural economic development programs. Through the Aggie Bond program, the participating state coordinates the creation of a bond that allows lenders to earn federally-tax exempt interest income on loans to eligible beginning farmers and ranchers.
USDA Business and Cooperative Programs - Promoting a dynamic business environment in rural America is the goal of Rural Business-Cooperative Service (RBS), Business Programs (BP). BP works in partnership with the private sector and community-based organizations to provide financial assistance, through grants and loans, and business planning. BP helps fund projects that create or preserve quality jobs and/or promote a clean rural environment. The financial resources of RBS BP are often leveraged with those of other public and private credit source lenders to meet business and credit needs in underserved areas. Recipients of these programs may include individuals, corporations, partnerships, cooperatives, public bodies, nonprofit corporations, Indian tribes, and private companies.
USDA's Business and Industry Loan Guarantee Program provides business and industry loan guarantees up to 90 percent of a loan made by a commercial lender. Loan proceeds may be used for working capital, machinery and equipment, buildings and real estate, and certain types of debt refinancing. The primary purpose is to create and maintain employment and improve the economic climate in rural communities.
USDA Rural Development Business and Industry Guaranteed Loans (PDF) (Community Developments Fact Sheet, February 2010) Learn about a program that guarantees loans made by eligible lenders to rural businesses
USDA Rural Microentrepreneur Assistance Program, launched in June of 2010, is investing $45.1 million for 2010 in organizations that provide training, technical assistance or make small loans to new and existing rural small businesses. The program makes awards quarterly to organizations that give technical assistance and/or small loans to rural small business owners, facilitate access to capital and access to services for rural microenterprises and develop rural entrepreneurs. Organizations eligible to apply for funding include nonprofits, public institutions of higher education, and tribal governments that are not served by a nonprofit development organization. If you are a small business owner looking for training, technical assistance or financing, or a banker looking for a local lending partner, there is a directory to find a program in your area. In October of 2010 the Department of Agriculture announced funding recipients in 36 states. The list of states with local organizations and funding levels can be found at USDA.
CRA Regulators, Joint Final Rule – Effective January 19, 2011, provides CRA credit for supporting Neighborhood Stabilization Program (NSP) projects. The regulatory agencies that enforce the Community Reinvestment Act will give favorable consideration to lenders’ community development activities in Neighborhood Stabilization Program target areas. See Federal Register Dec. 20, 2010.
Federal Home Loan Bank: Programs for Community Investments (PDF) Community Developments Fact Sheet describes a variety of programs that can finance housing and other rural development projects.
FHLBank Community Development Lending Final Rule - Community financial institution (CFI) members (members with assets of less than $1 billion over the past 3 years) of the Federal Home Loan Banks may use community development loans as collateral for FHLBank advances, and FHLBanks may make long-term advances to CFIs for community development activities. The rule also defines “community development” and related terms. See Federal Register, December 9, 2010. Contact Thomas E. Joseph, FHFA, (202) 414-3095.
National Main Street Center has been working with communities across the nation since 1980 to revitalize their historic or traditional commercial areas. Based in historic preservation, the Main Street approach was developed, by the National Trust for Historic Preservation, to save historic commercial architecture and the fabric of American communities' built environment, but has become a powerful economic development tool as well.
Rural Economic Area Partnership (REAP) Zones - USDA sponsored pilot for rural revitalization and community development in REAP Zones. The REAP Initiative was established to address critical issues related to constraints in economic activity and growth, low density settlement patterns, stagnant or declining employment, and isolation that has led to disconnection from markets, suppliers, and centers of information and finance. The REAP Zones were extended through September 2012.
The White House established the first White House Rural Council in 2011. While rural communities face challenges, they also present economic potential. The Council strives to address these challenges, build on the Administration’s rural economic strategy, and improve the implementation of that strategy. The Executive Order lists the membership, Council chair, and funding
USDA Community Facilities Guaranteed Loan Program (CFGLP) - Through the CFGLP, USDA Rural Development partners with private lenders to finance essential public facilities in rural areas. The guarantee permits a reduction in lender capitalization requirements, may meet community reinvestment act requirements, and may be sold on the secondary market. Borrowers under the CFGLP are public entities such as municipalities, counties, and special-purpose districts, as well as nonprofit and tribal governments.
Farm Service Agency
FSA Guaranteed Loan Program: The USDA Farm Service Agency offers lenders (banks, thrifts, Farm Credit System institutions, credit unions) guaranteed loans for both farm ownership and operating purposes. The guarantee can be up to 95 percent of the loss of principal and interest on a loan. As of March 4, 2013, USDA Farm Service Agency updated the interest rates that banks can charge on these guaranteed loans. Read the letter from Chris P. Beyerftelm, Deputy Administrator for Farm Loan Programs. The letter notifies lenders of the change that will go into effect on May 3, 2013. You can find the letter here or you can also read the interim rule in the Federal Register.
Loans for Beginning Farmers and Ranchers (PDF) - The U.S. Department of Agriculture's (USDA) Farm Service Agency (FSM) makes and guarantees loans to beginning farmers who are unable to obtain financing from commercial lenders.
Your Guide to FSA Farm Loans: This guide was written for people who need assistance starting, expanding, or owning a farm or ranch.
American Community Survey Guidebook Published for ACS Rural Data - A Compass for Understanding and Using American Community Survey Data: What Users of Data for Rural Areas Need to Know is intended to introduce the American Community Survey to those who use rural social, economic, and housing data. ACS will provide regularly updated data that can be updated frequently and will replace some of the data previously provided in the decennial Census.
American Housing Survey 2011 American Housing Survey (AHS) data - AHS is conducted every two years by the Census Bureau and HUD.
Beyond the Farm (David Dangler - 2007) - New trends in rural community development make the work of rural community development corporations appear more in line with their big-city counterparts.
National Association of Development Organizations (NADO) provides training, advocacy, and information for regional development organizations primarily in rural communities. NADO also provides a network for its members to share ideas and innovative projects through its Economic Development Digest, which highlights best practices in rural economic development.
National Rural Development Partnership (NRDP) is a national initiative administered by USDA which uses state collaboratives to bring together key rural players in their states to address critical rural community concerns. The NRDP highlights effective strategies for rural community and economic development and also maintains a web clearinghouse on rural development.
Foreclosure Prevention: Improving Contact with Borrowers (PDF) (June 2007) - This edition of OCC's Insights highlights best practices loan servicers are using to improve their contact rate with delinquent mortgage borrowers. These best practices include, but are not limited to, the use of sophisticated scoring models, customer friendly approaches, partnerships with nonprofit credit counselors, and web-based information on workout options.
Native American Banking Resource Directory - This directory provides descriptions and contact information for a sampling of organizations that can offer resources to banks interested in lending, investing, or providing retail financial services in Indian country.
Understanding Employer Assisted Mortgage Programs: A Primer for National Banks (PDF) (August 2007) Abstract: This edition of OCC's Community Development Insights examines the primary risks and regulatory considerations associated with employer assisted mortgages. The report illustrates how lenders can implement their own successful employer assisted programs or work with other employers to create such initiatives. The paper also discusses how banks participating in these programs may meet their Community Reinvestment Act obligations by providing mortgages to low- or moderate-income homebuyers or purchasers of properties in low- or moderate- income neighborhoods.
Updated Congressional District Profiles - Congressional District Profiles. Each profile pulls from a variety of sources and illuminates several dimensions of housing affordability for renter households in each district, the surrounding area, and the state. Each profile is divided into three sections: District, Constituent Areas, and States.
Economic Research Service - Measuring Rurality: ERS has developed several classifications to measure rurality and assess the economic and social diversity of rural America. The Rural-Urban Continuum Codes, the Urban-Influence Codes, and the Rural-Urban Commuting Areas are used to classify counties, census tracts, and ZIP codes by degree of rurality. The ERS’s State Fact Sheets provide information on population, income, education, employment, federal funds, organic agriculture, farm characteristics, farm financial indicators, top commodities, and exports, for each state in the United States.
Know Your Farmer, Know Your Food Compass is a digital guide to USDA resources that support regional food production and provide case studies of successful regional food projects. The interactive map feature includes data on food hubs, farmers markets, meat processing facilities and more, as well as data on USDA-supported projects in all 50 states and is searchable by key word and zip code.
National Institute of Food and Agriculture: Extension, research, and educational programs help individuals and families build financial assets instead of debt. Extension provides research-based information and education via courses, Web-based curricula, and other educational outlets for people to acquire knowledge, skills, and motivation to build financial security. The emphasis of programs is on behavioral change-developing a financial plan, managing risk of loss, reducing household debt, and saving and investing to meet life goals.
Recession's Rural Impacts Summarized Rural America At A Glance, The 2012 edition highlights the most recent indicators of social and economic conditions in rural areas for use in developing policies and programs to assist rural areas.
Rural Development Housing Programs 2009, produced by the Housing Assistance Council (HAC), shows that USDA obligated approximately $19 billion in Fiscal Year 2009 for the production, repair, or support of over 350,000 units of affordable housing for low- and moderate-income families in rural areas. Much of the information in this report derives from HAC tabulations of program data provided by USDA.
Updated State Data Sheets This site has the Economic Research Service's State Fact Sheets, which contain data on population, income, poverty, unemployment, and agriculture characteristics, have been updated with 2012 figures.
Public Facilities Lending
Rural Community Assistance Corporation (RCAC) is a nonprofit organization that assists rural communities in 12 western states. They build partnerships, advocate for small communities and develop capacity, especially for the development of public facilities.
USDA Rural Development (RD) provides financial program support for the development of essential public facilities and services such as water and sewer systems, housing, health clinics, emergency service facilities and electric and telephone service. RD supports economic development by guaranteeing loans to businesses through banks and community-based lending pools. RD also provides technical assistance to help agriculture and other cooperatives get started and improve membership services. Technical assistance is also provided to communities in order to assist them in achieving community empowerment.
Rural Development Farm Loan Programs
Farmer Mac is America's secondary market for first mortgage agricultural real estate loans, and was created by Congress to improve the availability of mortgage credit to America's farmers, ranchers and rural homeowners, businesses and communities. Farmer Mac does this primarily by purchasing qualified loans from lenders, thereby replenishing their source of funds to make new loans.
USDA's Farm Service Agency offers direct and guaranteed farm ownership and operating loans to farmers who are temporarily unable to obtain private, commercial credit.
Opening Doors to Rural Homeownership: Opportunities to Expand Homeownership, Build Wealth, and Strengthen Communities, National Rural Housing Coalition, Dec. 2012. This publication explains how two USDA programs (Section 502 Direct Loan program and Section 523 Mutual Self-help Housing program) have expanded homeownership opportunities to some of the nation’s poorest rural families.
Housing Assistance Council (HAC) provides loans at below-market interest rates to rural housing developers as well as technical assistance, research, and training to public and private organizations. HAC publishes Rural Voices, a newsletter that provides ideas on funding, planning, and building affordable housing and livable rural communities; HAC News, a biweekly newsletter with brief updates on topics related to rural housing and community development; and dozens of research reports and technical manuals, most of which are available on HAC's Web site.
Housing Assistance Council Publication Provides Rural Housing Research. Housing in Rural America
What is the Housing Foreclosure Situation in Rural America? (October 2009) reports on available data, notes special rural considerations, and provides recommendations, and is free.
Difficult Development Areas (DDA) And Qualified Census Tracts Designated (QCT). US Department of Housing and Urban Development identifies DDAs and QCTs for the Low Income Housing Tax Credit. See Federal Register, October 6, 2009. Contact Michael K. Hollar, HUD, (202) 402-5878.
HUD 203(k) Purchase/Rehabilitation Program - FHA 203(k) is a mortgage insurance program that enables homebuyers and homeowners throughout the country to finance the purchase or refinancing of a house and the cost of its rehabilitation through a single mortgage. Risk to lenders is reduced because the loan is insured at closing, prior to completion of the rehabilitation work. FHA-approved lenders make these insured loans and supervise the rehabilitation.
HUD Income Data. Estimated median family incomes and income limits for FY2012 are available at http://www.huduser.org/portal/datasets/il/il12/index.html. HUD has also developed a set of income limits specifically for projects that use Low Income Housing Tax Credits or tax-exempt bonds. Information on limits for these "Multifamily Tax Subsidy Projects."
Neighborhood Stabilization Program (NSP) (October 2008). Recently launched by the U.S. Department of Housing and Urban Development, this program was created and funded by the Housing and Economic Recovery Act of 2008. NSP provides CDBG funds to states and entitlement communities to buy and renovate foreclosed properties. HOPE provides FHA insurance for refinances. For NSP details, see http://www.huduser.org/Datasets/nsp.html.
NeighborWorks® in Rural America Initiative (NRI)
NeighborWorks® America administers the NeighborWorks Rural Initiative which provides funding to community development corporations and local non-profit organizations in over 75 rural communities across the country. These organizations provide homeownership education counseling, develop and renovate single- and multi-family housing, and promote economic development in rural areas across the country.
Low Income Housing Tax Credits are used extensively in rural areas to subsidize the cost of creating multifamily rental housing. Under the Low Income Housing Tax Credit Program, taxpayers may take a credit against federal income taxes for qualified rental housing development expenditures. The OCC's Tax Credit Resource Directory page includes a description of the Low Income Tax Credit Program (Spring 2006 Community Development Investments) and a Community Developments Fact Sheet on Low Income Housing Tax Credits (PDF). The OCC's Community Developments insights paper, Low-Income Housing Tax Credits: Affordable Housing Investment Opportunities for Banks (NR-2008-10) (PDF 1.1MB) (February 2008) describes how LIHTCs are used to develop affordable rental housing and how banks can benefit from investing in LIHTC-financed projects. It describes the two approaches for investing in LIHTCs - direct investments in individual affordable housing projects and fund investments that have multiple projects managed by third parties. The report outlines risks and regulatory considerations of LIHTC investments and describes how these investments would be considered under the Community Reinvestment Act (CRA).
USDA Guaranteed Rural Rental Housing Program (Sec. 538) provides up to a 90 percent guarantee (for permanent financing or permanent & construction combined) to banks that finance affordable rural rental housing. The program is described in the OCC fact sheet on USDA Rural Housing Finance Programs. Following up on a demonstration program, the Rural Housing Service (RHS), an agency within the Rural Development mission area, is amending its regulations (as of January 3, 2011) to add an additional form of guarantee that is now available under its Guaranteed Rural Rental Housing Program. A single, continuous guarantee during the construction phase for construction advances and the permanent financing phase of the project (for loans that meet certain criteria) will now be provided in addition to the two existing forms of guarantees under the program.
USDA Guaranteed Rural Rental Housing - Rural Rental Housing Guaranteed Loans are loans that are funded by conventional lenders (banks, mortgage companies, etc.). USDA protects the lender by limiting the loss in the event of default. Qualified lenders are authorized to originate, underwrite, and close loans to eligible borrowers to construct new multi-family housing projects. Lenders may also make loans for the purchase of an existing property where rehabilitation of at least $15,000 per unit is needed. Rural Housing Services will guarantee the lender's loan up to 90% of total development cost. Eligible borrowers include non-profit corporations, public bodies, and for-profit organizations. The program targets small communities with populations of no more than 20,000, located in non metropolitan areas. This program is intended to fund construction, acquisition, or rehabilitation of rural multifamily housing for low-income occupants.
USDA & Federal Home Loan Bank's Mortgage Partnership Finance (MPF) Program
The Mortgage Partnership Finance program of the Federal Home Loan Banks has announced a new partnership with the U.S. Department of Agriculture's Rural Development Program. Under the arrangement, approved FHLBanks participating in the MPF program can purchase RHS Section 502 government-guaranteed loans from qualified members, including commercial banks, thrifts, credit unions, and insurance companies. USDA Rural Development Guaranteed Loans are offered to qualifying low- and moderate-income families to purchase or refinance homes in rural areas with a population of less than 10,000 and non-metropolitan communities with populations of 10,000-25,000, the MPF reported. The partnership enables the FHLBank of Chicago, which pioneered the MPF program, and the FHLBank of Pittsburgh to buy such loans from their members as "a competitive alternative to the secondary mortgage market." The MPF program can be found online at http://www.fhlbmpf.com, and the Rural Development Program can be found at http://www.rurdev.usda.gov.
USDA Preservation Information Exchange (PIX) is a Web site for those interested in preserving affordable multifamily rental properties.
Last Updated: March 2013