USDA Implements OneRD Guarantee Loan Initiative


On August 31, the USDA announced the implementation of the agency’s OneRD guarantee loan initiative and released new information on rates and terms that will help lenders apply for loan guarantees to support rural businesses, community infrastructure and equipment.

The agency released a final rule on the initiative on July 13, noting that the program aims to facilitate lenders’ access to four guaranteed loan programs, including the Rural Energy for America program, the loan guarantee program for water and waste disposal, community facilities guaranteed. Loan Program and the Guaranteed Loan Program for Business and Industry.

The REAP program is particularly interesting for players in the biofuels and bioenergy industry. It provides loan guarantees and grants to agricultural producers and rural small businesses for renewable energy systems or to improve energy efficiency. Solid biomass, biogas and biofuels projects are among the renewable energy systems eligible for the program.

As part of the OneRD Guarantee Loan initiative, the USDA said it is standardizing requirements for credit reviews, loan processing, loan services, and loss claims. The agency said these measures will make the application process simpler and faster for lenders. The changes include a common loan guarantee application and consistent forms that lenders can use across all four programs.

In July, the agency also said it plans to issue loan note guarantees to lenders within 48 hours of providing documentation proving that the requirements of the conditional commitment have been met. USDA will also provide percentage collateral and fee requirements to lenders through a single annual notice at the start of each fiscal year and allow lenders to obtain loan guarantee approval before projects start. of construction. The agency will also provide automatic approval to lenders in good standing who are overseen or created by state or federal regulators to participate in the four programs, while unregulated lenders can apply for approval to participate through a unique certification process that will be valid for five years.

In the announcement released Aug. 31, the USDA said it was providing guarantee percentages, annual fees, periodic retention fees, and optional construction fees before fiscal 2021 to help lenders apply for the four loan guarantee programs involved.

For the REAP program, the loan guarantee fee is set at 1%, the periodic guarantee retention fee is 0.25%, the loan guarantee percentage is 80% and the guarantee issuance fee loan before the completion of construction is 0.5%. The fees in the notice are effective October 1.

Additional information is available on the USDA website.