Presented by Terence McGhee CPA MEd MBA Community Facilities Programs Region Coordinator Rural Developments Mission Rural Development is committed to helping improve the economy and quality of life in all of rural America by providing financial programs to support essential p ID: 681197
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Slide1
Community Facilities Programs
Presented by: Terence McGhee, CPA, M.Ed, MBA
Community Facilities Programs Region CoordinatorSlide2
Rural Development’s Mission
Rural Development is committed to helping improve the economy and quality of life in all of rural America by providing financial programs to support essential public facilities and services as water and sewer systems, housing, health clinics, emergency service facilities and electric and telephone service. Rural Development promotes economic development by providing loans to businesses through banks and community-managed lending pools, while also assisting communities to participate in community empowerment programs.
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Tusculum College
Tusculum, TennesseeSlide3
Community facilities programs funding foot print include investments in communities with a population of 20,000 or less
Eligible applicants include: municipalities, counties, special purpose districts, nonprofit corporations and federally recognized Indian tribes
The applicant must have the
legal authority
to incur debt
Eligible loan purposes include: construct, enlarge, extend or other wise improve essential community facilities
Community Facilities Programs
Program Requirements
3Slide4
Residence Halls
Administrative Buildings
Educational Buildings
Research Facilities
Parking lot paving
Renovation
Debt refinance (Must be less than 50% of funding request)
Interior furnishing
Equipment Purchases
Community Facilities Programs
Types of Projects
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Rollins Campus Center Young Harris CollegeSlide5
Types of Products
Direct Loan Program
Guarantee Loan Program
Community Facilities Programs
Types of Products
5
Rollins Campus Center Young Harris CollegeSlide6
Direct Loan Program
USDA is the lender
Terms
Up to 40 years (based on useful life of project)
Fixed interest rate
Payment options: monthly, semi annual and
annual
*No prepayment penalty
Community Facilities Programs
Types of Products
6
Rollins Campus Center Young Harris CollegeSlide7
Direct Loan Program – Interest Rate(s)
Poverty
The median household income of the service area is below the poverty line for a family of four or below 80 percent of the Statewide nonmetropolitan median household income. Project must address health and sanitary issues.
Intermediate
Apply to loans that do not meet the requirements for the poverty line rate and for which the median household income of the service area is below the poverty line or not more than 100 percent of the nonmetropolitan median household income of the State
Market
The market rate will apply to all loans that do not qualify for poverty or intermediate interest rates
Community Facilities Programs
Types of Products
7
Rollins Campus Center Young Harris CollegeSlide8
Direct Loan Program – Market Interest Rate
Community Facilities Programs
Market Interest Rate
8Slide9
Direct Loan Program
Collateral requirements
Each applicant must have or will obtain the legal authority necessary to
pledge security
for the loan
Loans will be secured by the
best security position practicable
in a manner which will adequately protect the interest of Rural Development during the repayment period of the loan
Community Facilities Programs
Types of Products
9
Mansfield University of PennsylvaniaSlide10
Direct Loan Program
Collateral requirements – Joint Financing
When adequate security of more than one type is available, the lender may take one type of security with the USDA taking another type
Projects utilizing joint financing with the same security to be shared by the USDA and another lender, a parity position may be considered
Community Facilities Programs
Types of Products
10
Under ConstructionSlide11
Direct Loan Program
– Example
Construction of Residence Hall - $28,000,000
40 Years – Term of Loan
3.125% - Interest Rate
$1,235,945 – Annual Payment
Community Facilities Programs
Types of Products
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Your New Campus ProjectSlide12
Guarantee Loan Program
Loan is guaranteed up to 90% by Rural Development
Mitigates risk for lender
Lender must be unwilling to make the loan without obtaining the loan guarantee
Guaranteed portion of loan does not count
against the lender’s
legal lending limits
Expanded project opportunities
*Great program to utilize when there is an established relationship with local lender
Community Facilities Programs
Types of Products
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Black River Technical College
Pocahontas, ARSlide13
Guarantee Loan Program
Lender and applicant negotiate the interest rate
Variable interest rates cannot adjust more than quarterly and must be tied to a base rate (ex. WSJ Prime
or
LIBOR) published in a recognized national or regional publication
Balloon payments are prohibited
Lender sets the term of the
loan which can not exceed 40 Years
Community Facilities Programs
Types of Products
13Slide14
Guarantee Loan Program
Security must be of such a nature that repayment of the loan is reasonably ensured when considered with the integrity and ability of project management and soundness of the
project
Joint Financing - Projects
utilizing joint financing with the same security to be shared by the USDA and another lender, a parity position may be considered
Community Facilities Programs
Types of Products
14Slide15
Available Funding
Community Facilities Programs
15Slide16
Funding Availability
2016 CF Loan Guarantees amount Includes Carryover Funding
16Slide17
CF Portfolio
Health Care$3.5 Billion
1,488 Facilities
Public Safety & Other
$1.3 Billion
6,172 Facilities
Total $7.7 Billion
Direct & Guaranteed Loans and Grants
Another $3 Billion in Unclosed Obligations
As of February 24, 2016
11,721
FacilitiesSlide18
CF Education Portfolio
Total $1.3 Billion
Direct Loans Only
As of February 24, 2016
Public & Charter Schools
$429 Million
1,009 Facilities
Childcare
$77 Million
265 Facilities
Other Educational
$516 Million
285 Facilities
Colleges
$215 Million
57 Facilities
Libraries
$58 Million
106 Facilities
900 FacilitiesSlide19
Public Private Partnership
Community Facilities Programs
19Slide20
Community
Facilities has taken a leadership role in facilitating Public Private
Partnerships (P3)
to better serve rural communities
The initiative was so successful in FY12 that the initiative was rolled into the White House’s Domestic Policy Council’s “We Can’t Wait” Initiative.
P3 has
bought together critical financial, project development and technical expertise, resources and innovation to large complex community infrastructure projects
The initiative has also spurred strong participation from our private sector lending partners to supplement CF Financing
Public Private Partnership Initiative
20Slide21
From
FY2012 to 2015, CF invested in 416 Public Private Partnership community infrastructure projects across rural America in 49 states.
CF
leveraged over $2.7 billion in CF direct loan funds, with $1.4 billion from institutional investors and the capital credit markets
CF
investments are projected to create or save 97,474 quality paying jobs.
Public Private Partnership Initiative
Continued
21Slide22
Types of Projects Funded
Community Facilities Programs
Types of Projects
22Slide23
Clarion University was established in 1867 and serves 6,520 students, but
had
aging infrastructure that
needed
updating.
728-bed, four-story student dormitory with 245,000 square feet of space that is prewired for internet and cable connections, which replaced two older dorms that were subsequently demolished.
The $66.4 million total cost was financed with a $45 million CF Direct loan and $21.4 million in public market bonds.
Clarion University employs almost 400
people.
Clarion University – Student Housing
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Clarion, PennsylvaniaSlide24
9-story clinical facilities building to increase medical student
capacity.
The $35 million total cost was financed with a $26.5 million CF Direct loan, $4 million in
NMTC’s
, $2.5 million in grants and $2 million from University of Pikeville.
PMC employs over 200 people in a persistent poverty area
The building will allow 200 more medical students to enroll, which will help address physician shortages in the Appalachia areas.
University of Pikeville – School of Osteopathic Medicine
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Pikeville, KentuckySlide25
Claflin
University was founded in 1869.
On campus water system infrastructure was deteriorating
beyond maintenance
repair due to the aging system.
The $2,995,000 total project cost was funded using the USDA Rural Development’s Community Facilities Direct Loan
The project will improve system delivery and adequately address the quality of water on campus.
Claflin
University – On campus water system upgrades
Orangeburg, South Carolina
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Talladega College was founded in 1867.
Construction of a 203 bed, 43,000 square foot student residence hall and 45,000 square foot campus center.
The $16,000,000 total project cost was funded using the USDA Rural Development’s Community Facility Direct loan program
This project upon completion will address the increasing demand for student housing, provide a solution for limited meeting space and student activity common areas.
Talladega College– Residential Halls and Student Center
Talladega, Alabama
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Chambless
King
ArchitectsSlide27
How to get connected?
Community Facilities Programs
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Community Facilities Infrastructure Tool Kit
Best practices and lessons learned when developing infrastructure projects
Community Facilities Programs
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Questions?
Community Facilities Programs
29Slide30
www.rd.usda.gov
Thank youTerence McGhee, CPA, M.Ed, MBA
Terence.mcghee@wdc.usda.gov