As a way to decrease risk and provide more value to their customers, lenders all across the state are turning to guaranteed lending programs at record levels this year.
During the past 12 months Rural Development in Iowa worked with 288 lenders to guarantee loans totaling $274.3 million for business development projects, community infrastructure and facilities and housing opportunities.
USDA Rural Development’s guarantee loan program provides lenders a way to reduce their risk portfolio while also improving return on their equity; two very important strategies in today’s tightening lending culture.
Guaranteed loans can be written for business projects located in communities up to 50,000 residents. Our agency can also assist communities with 20,000 or fewer residents with guaranteed loans for community projects, as well as no-down payment home loans for families.
In 2008, Rural Development assisted 24 business loans in Iowa with $134 million in loan guarantees, plus an additional $5.8 million for projects specifically related to energy creation and efficiency in the state.
Freedom Financial Bank in West Des Moines used Rural Development’s guaranteed loan program twice during the past two years to assist with the financing of a feed mill expansion near Ellsworth. The feed mill will now produce enough food each day to feed 1.3 million turkeys.
We have also provided guarantees for 1,320 mortgage loans and $26.1 million for community projects such as hospitals, medical clinics, child care centers and wellness centers.
During his visit to this year’s Farm Progress Show in Boone, Agriculture Secretary Ed Schafer presented a $5 million loan guarantee to the Central Iowa Expo Inc. The loan guarantee assisted with infrastructure development costs at the outdoor event center located east of Boone on Highway 30 and the new bi-annual site of the Farm Progress Show.
We worked with Community Bank of Boone on this loan guarantee.
Lenders play an important role in creating economic opportunities and improving the quality of life in rural America. Partnerships with lenders are critical to our agency’s ability to help rural Iowans achieve their business goals, community plans and homeownership dreams.
With guaranteed loans, communities get a new business, an essential community infrastructure, or a new homeowner will contribute to his neighborhood.
Home mortgage applicants receive a competitive interest rate; no down payment is required and mortgage insurance is not necessary. Guaranteed loans are also available for purchasing, rehabilitating or building new apartments in rural communities.
Mark Reisinger was appointed state director for the USDA Rural Development in May 2005. Rural Development has a state office in Des Moines, along with 10 area offices in Albia, Atlantic, Humboldt, Indianola, Iowa Falls, Le Mars, Mount Pleasant, Storm Lake, Tipton and Waverly.
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