New refinancing program formed for rural water, wastewater lending
A new financing program for rural water and wastewater systems was announced on Wednesday, Nov. 13.
DENVER, CO, Nov. 13, 2013 -- A new financing program for rural water and wastewater systems was announced on Wednesday, Nov. 13.
Established by CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit System associations throughout the United States, the new "Streamlined Refinance Program" allows U.S. rural water and wastewater providers to utilize a streamlined process to refinance their existing U.S. Department of Agriculture Rural Development loans with maturities of approximately 20 years or less.
Refinanced loans issued under the program will offer multiple benefits to participating customers, including historically low interest rates, a simple credit application packet, flexible structures that reduce payments or shorten maturity, a streamlined approval and closing process, and eligibility for patronage refunds from the bank for loans to qualified borrowers. CoBank has consistently paid 1 percent of eligible loan balances in patronage, of which 75 percent is currently paid in cash.
"For any rural water or wastewater company, whether it's a municipality or a not-for-profit system, we believe this program provides a great opportunity to save money by using a quick and easy loan process to take advantage of historically low interest rates," said Paul Narduzzo, senior vice president for CoBank's Electric Distribution and Rural Water Banking Division. "This program should also help the customers meet their USDA Rural Development graduation requirements."
CoBank is a $94 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.