Rural Developments Broad Base

of Economic Development Programs

Environmental Justice 2016 Conference
Vernita Dore, Deputy Under Secretary
Gary Bojes, Ph.D., RD Rural Utilities Service
March 10, 2016

United States Department of Agriculture

(USDA)
Seven Mission Areas
Secretary Tom
Vilsack
Farm & Foreign Agriculture
Services
Food Safety

Food, Nutrition and Consumer

Services
Marketing & Regulatory Programs

Natural Resources and

Environment

Research, Education and

Economics

Rural
Development
2

Rural Developments Mission

To assist rural
communities in
creating prosperity so
they are self-sustaining
and economically
thriving through
investments that
create ladders of
opportunity, build
regional resilience and

Rural Development Program Areas

Rural Utilities
Service

Rural Housing & Community

Facilities

Rural Business & Cooperative

Service

Electric Program

Homeownership Loans

Water & Environmental

Programs

Home Repair Loans & Grants

Business and Industry Guaranteed

Loans

Telecommunications
and
Broadband Programs

Mutual Self-Help Technical

Assistance Grants
Multi-Family Housing Loans

Intermediary Relending Program

Rural Business Development
Grants

Farm Labor Housing Loans &

Grants

Rural Energy for America Program

Housing Preservation Grants

Cooperative Development
Assistance

Community Facilities Loans &

Grants

Value Added Producer Grants

USDA Rural Development

National Office
General Field
Representatives

Native American
Coordinators
State Directors

Area Directors

Program Directors

Specialists

Architects

Engineers
Technicians

Rural Development Funding Streams

Programs

Guarante
ed Loans

Direct
Loans

Direct
Payments

Grants

Our Rural Development Partnership with Rural

America
Some Key Public Private Partnership Milestones
1901 to 1926 | Cooperative Programs Evolves
for Rural Businesses
1935 | Rural Electrification Administration
1937 | Water Facilities Act
1949 | The Housing Act (Establishes Singleand Multi-Family Affordable Housing)
1949 | Rural Telephone Program
1968 | The Self Help Housing Program is Established
1990 | Distance Learning/Telemedicine Program
1994 | Restructuring: REA Plus Water
and Waste Programs
Every five years Congress sets some direction for

Rural Developments
Programs

Utilities Programs

History

The USDA Rural Utilities Service evolved from the Rural Electrification Administration (REA) formed as part of
the Federal Governments New Deal programs during the Great Depression, designed to help the neediest in
America.
9

Rural America Before Federal Programs

Labor intensive way of life

10

Rural America Before Federal Programs

Health and financial concerns were

major issue

11

Rural America Before Federal Programs

Private utilities
were unwilling
to serve rural
areas
No industry or large loads for electric,
telephone, or sanitary water service in
rural areas

Low return on investment due to

low population density
12

Utilities Programs
Equal Access to Essential Services
A Cleaner Environment
Infrastructure for Growth

Electric Program
(1935)

Telecommunications Program
(1949)

Water and Environmental

Programs
(1937)
13

Rural Utilities Service Borrowers &

Grantees
Infrastructure for
80% of the nations
land mass
Enhancing the lives
of 25% of the
population

Obligations

Alaska

RUS
WEP

Puerto
Rico
FY 2012 - 2016, as of 12/31/2015
Hawaii

14

The Electric Programs

Principles
Low interest funding;
Area coverage;
Cooperative principles
owned by those we serve;
and
Standardized rural
engineering

15

Rural Development Partners with Local

Leaders
Community involvement was a key to implementation then, and
is still key for
all RD Programs

16

The Electric Programs

In the United States, Electric

Cooperatives:

Provide retail electric power to 42 million nationwide

Service over 13% of the nations meters

Own 42% of total distribution miles

Deliver 11% of the total kWh sold in the U.S. each year

Generate nearly 5% of total electricity produced

Sales - 57% residential and 43% commercial and industrial

According to the National Academy of Engineering, Electrification had

the Number 1 engineering impact of the 20th Century

Source: www.nreca.coop

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The Electric Programs

Energy Efficiency
and Conservation
Loan Program

Assistance to High
Energy Cost Rural
Communities

The technology must be

commercially available,
and

Loans for weatherization of

homes, heating, ventilation
and air conditioning, ground
source heat pumps and lighting

The funds must be spent

on furnishing or
improving electric service
to persons in rural areas

Utility might relend funds to

consumer for Energy Efficiency
upgrades

Utility may charge a 1.5

percent interest rate to the
consumer for the Energy
Efficiency loan

Section 19 of the Rural

Electrification Act of 1936, as
amended (7 U.S.C. 918a)
authorizes three programs to
help rural areas challenged by
high cost energy costs and lack
of adequate energy
infrastructure:

Loans to RUS borrowers my

have terms up to 30 years

Renewable
Energy

Loans for eligible

Renewable technologies
include: Wind, Biomass,
Solar and Geothermal
o

Loans are not limited to

Rural Electric Cooperatives
No waiting in line behind
traditional Fossil Fuel

USDA Rural Development

High Energy Cost Grants and
Loans;

Denali Commission High

Energy Cost Grants and
Loans; and

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The Electric Programs

Financing electric infrastructure in Rural America

2,497 loans outstanding representing $43 Billion in principal
Financing electric service to more than 90% of the Nations
persistent poverty counties that include out-migration or
having other economic hardships

for over 80 years!

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The Telecommunications Programs

Telecommunications
Infrastructure Loan Program
(Infrastructure)
Distance Learning/Telemedicine
Loan and Grant Program (DLT)
Broadband Access Loan and Loan
Guarantee Program
(Broadband)
Community Connect Grant
Program (Community Connect)

20

The Telecommunications Programs

Telecommunications
Infrastructure Loan
Program (Infrastructure)
Principles

Low interest funding;

Area coverage;

Cooperatives or companies; and

Single-party service

21

The Telecommunications Programs

Infrastructure Program

Assists the private sector in developing,

planning, and financing the construction
of telecommunications infrastructure in
Rural America

Loan funds may be used for full range

of building and modernization activities:
o New Construction
o Improvements
o Expansions and Acquisitions
o Refinancing

Broadband Loan Program

22

The Telecommunications Programs

Distance Learning/Telemedicine Program

The DLT Grant and Loan Programs provide rural communities with opportunities to obtain
educational and medical services from distant locations utilizing communications
technologies

Community Connect Grant Program

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The Telecommunications Programs

According to the National Academy of Engineering, Telephony

had the Ninth greatest engineering impact of the 20th Century
Infrastructure Program

Financing telecommunications infrastructure

in rural America
1,358 loans outstanding representing $4.4 Billion in principal

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Water and Environmental

Programs

Water Programs

Loans, Grants, and Technical Assistance

Engineering & Environmental

Engineering support for Water Programs and Environmental support for all of USDA Rural Developments
utilities programs

Congressional Set Asides

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Water and Environmental

Programs
Different Challenges Require Different
Responses
Focus on replacing well water with public water
Not easily extended to remote locations with low density

Municipal boundaries and political structures fit well

o They provide the organizational structure to manage a system

Water Programs Funds

Drinking water, sanitary sewer, solid waste, and storm drainage
o Bricks and mortar
Planning
o Technical assistance and training
o Improving operator skills, system planning, and solid waste
management

26

Water and Environmental

Programs
Providing safe and abundant water had the Fourth greatest
engineering
impact of the 20th Century According to the National Academy of
Engineering

Financing water and environmental programs

in rural America
16,209 loans outstanding representing $12.6 Billion in principal

27

Business Programs

Strengthening & Diversifying Rural

Communities
Creating Jobs
Business Development in rural areas
o

Loan Guarantees for most any business purpose

o

Job creation and retention

Grants to encourage business development

o

Financial resources are often leveraged with those of other

public and private credit source lenders to meet business and
credit needs in under-served areas

Entrepreneurial support - technical assistance, regional

planning, adult training, feasibility studies, incubators,
infrastructure

Capitalize revolving loan funds

o

Loans or grants to entities that relend the funds to small rural

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$6.7 Billion Portfolio

(as of October 31, 2015)

Number of active loans: more than 4,700

Code 11
Code 21

Code 11: Agriculture, Forestry, Fishing and Hunting

Code 21: Mining, Quarrying, and Oil and Gas Extraction
Code 22: Utilities
Code 23: Construction
Code 31-33: Manufacturing
Code 42: Wholesale Trade
Code 44-45: Retail Trade
Code 48-49: Transportation and Warehousing
Code 51: Information
Code 52: Finance and Insurance
Code 53: Real Estate and Rental and Leasing
Code 54: Profession, Scientific, and Technical Services
Code 55: Management of Companies and Enterprises
Code 56: Administrative and Support and
Waste Management and Remediation Services
Code 61: Educational Services
Code 62: Health Care and Social Assistance
Code 71: Arts, Entertainment and Recreation
Code 72: Accomendation and Food Services
Code 81: Other Services (except Public Admin.)
Code 92:Public Administration
Unknown NAICS

458; 9%

Code 22

186; 4%
57; 1%

Code 23

274; 6%

159; 3%

Code 31-33

127; 3%

Code 42
Code 44-45

24; 0%

Code 48-49

577; 12%
721; 15%

Code 51
Code 52
Code 53
Code 54

100; 2%

Code 55
166; 3%

40;
1%
9; 0%
66;
1%

303; 6%

Code 56
Code 61
Code 62

82; 2%
414; 8%
86; 2%
88; 2%

394; 8%
578; 12%

Code 71
Code 72
Code 81
Code 92
Unknown NAICS

Energy Programs
Financial Support for Sustainable Rural Energy
Development
Loan Guarantees and Grants

Offer funding to
o Complete energy audits,
o Provide renewable energy development assistance,
o Make energy efficiency improvements, and
o Install renewable energy systems

Programs that help

o
Convert older heating sources to cleaner technologies,
o
Produce advanced biofuels,
o
Install solar panels, and
o
Build biorefineries

Payment programs
o Assist companies that replace use of fossil fuels with renewable biomass

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Energy Programs
Financial Support for Sustainable Rural
Energy Development
Loan Guarantees and Grants
Rural Energy for America Program (REAP) Loan Guarantees and
Grants
Rural Energy for America Program (REAP) Energy Audits &
Renewable Energy Development Grants
Biorefinery, Renewable Chemical, and Biobased Product
Manufacturing Assistance Program
Advanced Biofuel Payment Program
Repowering Assistance Program

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Cooperative Programs
The overall mission of USDA Co-op Programs is to
promote the understanding and use of the
cooperative form of business as a
viable organizational option
This is accomplished through
o Cooperative research,
o Information products,
o Statistics, and
o Technical assistance
A number of USDA Rural Development financial
programs can also provide funding to help new
and existing co-ops
o Value Added Producer Gants
o Rural Cooperative Development Grants
o Socially-Disadvantaged Groups Grants

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Housing Programs

Improving Quality of Life

Strengthening Communities
Building Ownership & Opportunity

Since 1949, USDA Rural Developments Housing

Programs have extended the dream of
homeownership to millions of rural Americans.
Well, built, affordable housing is essential to the
vitality of communities in rural America. Housing
Programs give families and individuals the
opportunity to buy, build, repair, or own safe and
affordable homes located in rural America.
Eligibility for these loans, loan guarantees, and
grants is based on income and varies according to
the average median income for each area.

33

Housing Programs

USDAs Housing Programs help rural communities and

individuals by funding low-interest single family
home loans, apartments for low-income persons or
the elderly, housing for farm laborers, and much
more!
Single Family Housing Direct Home Loans

Single Family Housing Home Loan Guarantees

Single Family Housing Repair Loans and Grants

Mutual Self-Help Housing Technical Assistance Grants

Multi-Family Housing Loans

Farm Labor Housing Loans and Grants

Housing Preservation Grants

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Community Facilities Programs

USDA Rural Developments Community Programs assists rural

communities in financing critical community facilities including:
Schools
Hospitals
Day care centers
Fire and police stations and
much more!
Essential community infrastructure is key in ensuring that rural areas enjoy
the same basic quality of life and services enjoyed by those in urban areas.
Through its Community Programs, USDA Rural Development is striving to
ensure that such facilities are readily available to all rural communities.
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Community Facilities Programs offer

Direct Loans Loan Guarantees Grants
To improve essential public services and facilities in communities across rural
America.
These amenities help increase the competitiveness of rural communities in
attracting and retaining businesses that provide employment and services for their
residents.

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3 Major Community Facilities

Programs

ect Loans Guaranteed Loans Grants

The CF Direct and Guaranteed Loan programs provide direct loans or loan guarantees to
public bodies, nonprofit corporations, and Indian tribes in communities with a population of
20,000 or less.

Applicants must demonstrate sound financial practices, the ability to repay the loan and the
ability to effectively manage the community facility.

CF Grants can be made for up to 75% of the cost to develop a project.

Priority is given to applications received from applicants located in and serving rural areas and
towns with populations of 5,000 or less and where the median household income of the
population to be served by the proposed facility is below the poverty line or below 60 percent
of the State non-metropolitan median household income.

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StrikeForce Initiative

for Rural Growth and Opportunity

To support rural counties suffering from poverty on

a persistent basis, USDA established the
StrikeForce for Rural Growth and Opportunity
Initiative to better coordinate efforts and promote
economic development in these areas.

Fast Facts 2015

Median State Child Poverty Rate

24.9%

Since the StrikeForce launch in 2010, USDA has

partnered with more than 1,500 community
organizations, businesses, foundations,
universities and other groups to bring targeted
assistance to rural areas experiencing chronic
poverty.

Number of Community Partners

These efforts have invested more than $23.5

billion to create jobs, build homes, feed kids,
assist farmers and conserve natural resources
across more than twenty states.

$7.49 Billion

In 2016, USDA StrikeForce teams will operate in

1,596

Total USDA Projects

62,297

Total USDA Investment

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It takes a partnership of willing

community leaders, residents,
bankers, visionaries
AND
USDA Rural Development to revitalize
our rural communities. The
possibilities are endless.

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Gary.bojes@wdc.usda.gov
|
(202) 720-1265
For additional information, please visit: www.rd.usda.gov