BEREA, Ky., Oct. 6, 2016 – Agriculture Secretary Tom Vilsack today unveiled an unprecedented collaboration with banks, philanthropic foundations and community development organizations. In partnership with the Uplift America initiative, USDA is providing $401 million in Community Facilities program funds to local lenders with track records of helping reduce poverty in some of the nation’s most isolated rural communities.
“This effort builds on our commitment to lifting up the economic prospects of communities that have not benefited from the revitalization of rural America," said Vilsack. "By engaging with local and national partners, private-sector financial institutions and philanthropic organizations, USDA will inject a game-changing level of investment capital to reduce poverty in targeted rural areas where the capacity for growth has not been realized."
The long-term, low-interest financing available through Uplift has two unique features: Private financial institutions, primarily Bank of America, provide guarantees for the first five years of the loans. Recipient "relenders" are eligible for net-asset and capacity building grants from a $22 million fund pooled by seven philanthropic foundations: Bank of America, Ford, Heron, JP Morgan Chase, Mary Reynolds Babcock, Northwest Area and Winthrop Rockefeller. MRBF, which is managing the fund, views the partnership as an opportunity to target critical funding to underserved communities while strengthening experienced local lenders.
“With vast expertise about the areas they serve, community development organizations are uniquely positioned to tailor place-based solutions,” said MRBF Executive Director Justin Maxson. “Grants from the Uplift America Fund enable these lenders to attract more federal dollars in the short term, while building their capacity to address rural economic challenges for the long term.”
The CF loans may be used to build, acquire, maintain or renovate essential community facilities. They also can be used for capacity building and to finance community services, such as education, health care and infrastructure. Kentucky-based Community Ventures Corporation plans to use funding from Uplift to open a new office and launch the Build Appalachia Fund.
“Hospitals and colleges are usually the biggest economic drivers in small Appalachian towns. If we can strengthen those facilities by helping them attract more students or serve more patients, it increases the economic vitality of those communities,” said CVC President Kevin Smith. “There are a lot of great ideas in rural communities that never get off the starting block, and through this program, we can make that happen.”
The funding will allow South Carolina Community Loan Fund to boost lending in rural counties, many of which experience poverty levels of 20 to 30 percent.
“The unique partnership that has been established through the Uplift America Fund and Community Facilities Relending Program will help us provide essential services and improve quality of life in low-income, rural communities by providing much-needed, long-term capital,” said Chief Executive Officer Michelle Mapp. “We look forward to continuing to increase the wealth and health of disinvested communities throughout the state.”