RCAC Loan Fund lends more than $5.8 million in rural communities

February 15, 2012

West Sacramento, Calif. — In its first quarter ending, RCAC lent more than $5.8 million to rural communities in Alaska, Arizona, California, Hawaii, New Mexico and Utah to finance much-needed community projects.

In its first quarter of Fiscal Year 2012, RCAC made two environmental infrastructure and three affordable housing loans; financed three community facilities; and made its first loans under two new lending programs.

First quarter, first loans

RCAC also closed its first small business loan and first individual well repair loan this quarter. RCAC received a grant from U.S. Department of Agriculture Rural Development’s Household Water Well System Loan Program last year to finance individual wells. To qualify, borrowers must be low-income, and own a home in a rural area. Typically, the low-interest loans are small, less than $11,000, and are used to repair or replace individual wells. RCAC’s first $2,000 loan under this program was to a low-income single mother in rural Utah whose well had failed completely.

~Michael Carroll

RCAC’s first $150,000 small business loan was to a small fencing company in California. The loan provided the company the working capital it needed to bid on larger jobs and add employees. The fence company has been in business for more than 20 years. After two of its competitors went out of business, demand for business grew faster than the company’s cash on hand and staffing. The business owner submitted its first quarterly report, and noted that the company finished the year booked out two to three weeks for all five of its fencing crews. In addition, the business added five employees and completed several large-scale jobs that would not have been possible without RCAC’s working capital loan.

Community facilities

Demand for RCAC’s community facility financing continues to grow. In the last quarter, RCAC made a loan to a Ferry Authority in Alaska for operating expenses, acquisition and retrofit costs for a passenger/vehicle ferry. Now, transportation service in the area is quite limited. Once the ferry is operating, it will provide year-round transportation between several remote communities; and it will make access to larger communities for supplies and medical care a reality.

RCAC also made loans in California to construct a family resource center and to preserve a theater for the arts. The theater building is an irreplaceable local landmark. Once preserved, it will enrich the community’s cultural arts programming and benefit its economic sustainability.

Housing

Although the housing market has not yet fully rebounded, RCAC made loans to provide land for 76 self-help housing units in Hawaii and for 24 units in California; and another loan in Arizona to rehabilitate 24 foreclosed homes.

Environmental

RCAC made two predevelopment loans for water systems in California and New Mexico this quarter as well. These loans will eventually provide more than 2,400 connections to clean, safe drinking water in two rural communities. RCAC’s loan programs are unique — they provide the early funds small rural communities need to determine feasibility and pay pre-development costs prior to receiving state and federal program funding.

“This year RCAC is expanding lending to small businesses in California and household wells in Colorado and Utah. Both represent our commitment to fill gaps and address unmet needs in rural communities. Our core lending programs remain very productive as well,” said Michael Carroll, RCAC Loan Fund director.

RCAC created its Loan Fund in 1988 and was later certified as a CDFI. As of December 31, 2011, RCAC closed 632 loans which totaled $329,450,209 and leveraged more than $1.33 billion for projects in rural communities. These loans supported 54,041 individual water and wastewater connections for rural citizens, 11,962 housing units; 1,233,364 feet of community facility space; and created or retained 13,710 jobs. RCAC currently has 141 loans under management, totaling more than $54.7 million. Additionally, RCAC manages 40 loans totaling more than $47.7 million on behalf of other lenders and investors.

In FY11, RCAC closed 39 loans which totaled $ 22,961,392 in 10 states. These loans supported 4,942 individual water and wastewater connections for rural citizens, 460 housing units; 50,466 feet of community facility space; and created or retained 235 jobs.

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's Loan Fund products >>

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