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Community Water Facility Revolving Loan Fund
The Community Water Facility Revolving Loan Fund was established by the North Dakota legislature in 1978. Monies transferred to this fund are used primarily for supplementary financing in conjunction with the USDA Rural Development (RD) - formerly FmHA/FSA - for community water projects.
The program was established to provide financing for community water projects
when the project is above the maximum loan limits set by RD. It is also the
intent of this program to provide supplemental financing for federal loan
programs associated with community water projects. Loans from this fund are
made in accordance with N.D.C.C. Chapter 6-09.5.
Qualifying Requirements
Borrower - Eligible applicants are cities, associations, cooperatives and
corporations operated on a nonprofit basis who have the legal authority to
construct, operate and maintain water facilities. These entities should also
show the ability to repay the loan in accordance with the RD requirements.
BND shall cooperate with the State Office of RD in considering applications
to comply with 7 U.S.C. 1926 and 1927, and the rules and regulations relating
to community water facilities.
Borrowing Limitations - The maximum amount of a loan cannot exceed
50% of the total project cost.
Service Area - A borrower selects the most efficient and economically
feasible methods of planning a community water facility project. In addition to
central water systems, the community water facilities may provide service for
individual usage or for small clusters of users within the central system service
area, but who are beyond the physical or economic limits of the central
system.
Use of Proceeds - A maximum lending limit has been established at 50%
of the total project cost or the remaining available funds in the revolving
account. The fundable project cost shall be established by RD in accordance
with their review procedures.
This program may be used for community water projects including:
- Loans for locating, conserving, controlling, treating and distributing water. (These include reservoirs, dams, canals, wells, pumps, treatment plants, mains, pipelines, and other associated features necessary to supply water.)
- Loans for necessary services prior to RD approval.
- Loans to cover operating expenses of projects when the borrower is unable to pay such expenses.
Collateral - These loans are secured by a real estate mortgage or by
revenue bonds.
Application Process
An application may be made either directly to BND or through the State office of RD. Click here for the loan application.
Interest Rate
The interest rate on a loan from this fund is 3%.
Repayment Terms
The maximum term of a loan may not exceed 40 years. BND may defer
interest and principal for up to three years to give a project time to become
self-supporting. Thereafter, BND will establish a simple amortization schedule
for the remaining term of the loan.
For more information on this program or other Bank of North Dakota programs,
contact:
Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5786
1-800-472-2166 ext. 5786
TDD (Telephone Device for the Deaf) 1-800-643-3916
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