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RCAC loans strengthen small communities from Arizona to Hawaii

April 23, 2010

West Sacramento, Calif. — In its second quarter of fiscal year (FY) 2010, Rural Community Assistance Corporation’s (RCAC) Loan Fund closed five loans totaling more than $4.47 million for community projects in Arizona, California and Hawaii. The loans cover a range of projects.

Arizona’s Antelope Peak Domestic Water Improvement District received an RCAC loan for a feasibility study to determine how best to replace the district’s aging distribution lines. The feasibility reports will satisfy part of a U.S. Department of Agriculture (USDA) Rural Development – Rural Utilities Services application and meet Water Infrastructure and Finance Authority of Arizona requirements.

Graton Community Services District (Graton CSD) in Sonoma County, California , received an RCAC line of credit to finance a cash flow shortage for a FEMA-funded flood protection project. Once available, FEMA disbursements should be adequate to fund the project for six months, at which time Graton CSD will repay the RCAC loan in full.

Loleta Community Services District (LCSD) in Humboldt County, California received an RCAC line of credit that will enable the district to make timely payments to its contractor and engineer pending stimulus funding disbursements. LCSD received stimulus funding, an American Recovery and Reinvestment Act (ARRA) $1,298,443 zero interest loan with principal forgiveness from the California Department of Public Health (CDPH) Safe Drinking Water Revolving Fund program. The funds will be used for a new water supply and to make needed improvements to the water system.  

Modoc Charter School, Inc., doing business as New Day Academy, in California , faced a cash flow shortage the second half of its school year after the state of California deferred a portion of General Block Grant payments (the school’s main source of funding) to the end of the school year. The RCAC revolving line of credit will finance operating expenses through the end of the school year and provide funding to the academy for the next school year in the event another cash flow shortage occurs.

In Hawaii, Habitat for Humanity Leeward O’ahu, Inc . will use its current RCAC loan to repay a previous RCAC land acquisition loan and to continue site development for 25 finished affordable housing single family lots. Either Habitat, USDA Rural Development 502 self-help loans or other affordable housing loans will be used as the home construction and permanent financing for all the participant families.

“RCAC is happy to provide flexible and much-needed financing in the communities where we closed loans in the last few months. Our lending for vital community infrastructure and facilities continues to increase.” said Michael Carroll, RCAC Loan Fund director.

RCAC created its Loan Fund in 1988 and was later certified as a CDFI. As of March 31, RCAC closed 560 loans which totaled $280,220,743 and leveraged $1,169,508,543 from other sources for projects in rural communities. These loans supported 27,159 individual water and wastewater connections for rural citizens, 11,141 housing units and 823,063 feet of community facility space.

The Loan Fund provides low-interest loans for affordable housing, community facilities, water and wastewater systems and more. Today, the RCAC Loan Fund is capitalized at $70 million.

Founded in 1978, RCAC provides a wide range of community development services for rural and Native American communities, agricultural workers and community-based organizations in 13 Western states. RCAC has strong core services and expertise in housing, environmental infrastructure (water, wastewater and solid waste), leadership training, economic development and financing. To find out more about RCAC and its Loan Fund products, visit www.rcac.org/doc.aspx?82.

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