The United States Department of Agriculture (USDA) is taking steps to increase private investment in rural communities across the country by making it easier for lenders to access four flagship loan programs, according to U.S. Secretary of Agriculture Sonny Perdue.
“These enhancements will make it easier for private lenders to use USDA programs to invest in rural businesses and grassroots rural economic development efforts,” Secretary Perdue said in a statement on Tuesday, July 14.
USDA is seeking public comment on a series of regulatory reforms known collectively as the OneRD Guarantee Loan Initiative, according to the news release. Under the initiative, USDA will eliminate duplicative processes and launch a single platform for four key loan programs:
According to the news release, USDA also will standardize requirements for credit reviews, loan processing, loan servicing and loss claims. These measures will make the application process simpler and faster for lenders. Among the reforms, USDA intends to:
· Launch a common loan note guarantee application and consistent forms for lenders to use across the four programs;
· Issue loan note guarantees to lenders within 48 hours after they provide documentation to prove the requirements of the conditional commitment have been met;
· Provide guarantee percentage and fee requirements to lenders through a single annual notice at the beginning of each fiscal year;
· Allow lenders to obtain approval for a loan guarantee prior to the beginning of construction projects. A one-time fee and other requirements may apply; and
· Provide automatic approval to lenders in good standing who are supervised or created by state or federal regulatory agencies to participate in all four programs. This expands the base of eligible lenders for the four guaranteed loan programs. Non-regulated lenders may seek approval to participate through a single certification process that will be valid for five years.
USDA plans to conduct a series of listening sessions this summer on the proposed changes. For more information on how to register, visit: www.rd.usda.gov/onerdguarantee. The changes will take effect on Oct. 1. Additional information is available in the July 13 Federal Register.