The requirements for a RES or EEI project for which an Applicant is seeking a combined grant and guaranteed loan are specified in this section.
Terms Used In 7 CFR 4280.165
- Agency: The Rural Business-Cooperative Service (RBS) or successor agency assigned by the Secretary of Agriculture to administer the Rural Energy for America Program. See 7 CFR 4280.103
- Applicant: (1) Except for EA and REDA grants, the Agricultural Producer or Rural Small Business that is seeking a grant, guaranteed loan, or a combination of a grant and loan, under this subpart. See 7 CFR 4280.103
- Eligible Project Costs: The Total Project Costs that are eligible to be paid or guaranteed with REAP funds. See 7 CFR 4280.103
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(a) Eligibility. All Applicants must be eligible under the requirements specified in §4280.112. If the Applicant is seeking a grant, the Applicant must also meet the Applicant eligibility requirements specified in §4280.112. If the Applicant is seeking a loan, the Applicant must also meet the borrower eligibility requirements specified in §4280.127. Projects must meet the project eligibility requirements specified in §§4280.113 and 4280.128, as applicable.
(b) Funding. Funding provided under this section is subject to the limits described in paragraphs (b)(1) and (2) of this section.
(1) The amount of any combined grant and guaranteed loan shall not exceed 75 percent of Eligible Project Costs and the grant portion shall not exceed 25 percent of Eligible Project Costs. For purposes of combined funding requests, Eligible Project Costs are based on the total costs associated with those items specified in §§4280.114(c) and 4280.129(e). The Applicant must provide the remaining total funds needed to complete the project.
(2) The minimum combined funding request allowed is $5,000, with the grant portion of the funding request being at least $1,500 for EEI projects and at least $2,500 for RES projects.
(c) Application and documentation. When applying for combined funding, the Applicant must submit separate applications for both types of assistance (grant and guaranteed loan). The separate applications must be submitted simultaneously by the lender.
(1) Each application must meet the requirements, including the requisite forms and certifications, specified in §§4280.117, 4280.118, 4280.119, and 4280.137, as applicable, and as follows:
(i) Notwithstanding Form RD 4279-1, the SAM number and its expiration date must be provided prior to obligation of funds;
(ii) A combined funding request for a guaranteed loan greater than $600,000 must contain the information specified in §4280.137(b)(1); and
(iii) A combined funding request for a guaranteed loan of $600,000 or less must contain the information specified in §4280.137(c)(1) and (2).
(2) Where both the grant application and the guaranteed loan application provisions request the same documentation, form, or certification, such documentation, form, or certification may be submitted once; that is, the combined application does not need to contain duplicate documentation, forms, and certifications.
(d) Evaluation. The Agency will evaluate each application according to §4280.115(c). The Agency will select applications according to applicable procedures specified in §4280.121(a) unless modified by this section. A combination loan and grant request will be selected based upon the grant score of the project.
(e) Interest rate and terms of loan. The interest rate and terms of the guaranteed loan for the loan portion of the combined funding request will be determined based on the procedures specified in §§4279.125 and 4279.126 of this chapter for guaranteed loans.
(f) Other provisions. In addition to the requirements specified in paragraphs (a) through (e) of this section, the combined funding request is subject to the other requirements specified in this subpart, including, but not limited to, processing and servicing requirements, as applicable, as described in paragraphs (f)(1) through (6) of this section.
(1) All other provisions of §§4280.101 through 4280.111 apply to the combined funding request.
(2) All other provisions of §§4280.112 through 4280.123 apply to the grant portion of the combined funding request and §4280.124 applies if the project for which the grant is sought has a Total Project Cost of $200,000 and greater.
(3) All other provisions of §§4280.125 through 4280.152, as applicable, apply to the guaranteed loan portion of the combined funding request.
(4) All guarantee loan and grant combination applications that are ranked, but not funded, will be processed in accordance with provisions found in §4280.121(d), (e), and (f).
(5) Applicants whose combination applications are approved for funding must utilize both the loan and the grant. The guaranteed loan will be closed prior to grant funds being disbursed. The Agency reserves the right to reduce the total loan guarantee and grant award, as appropriate, if construction costs are less than projected or if funding sources differ from those provided in the application.
(6) Compliance reviews will be conducted on a combined grant and guaranteed loan request. The compliance review will encompass the entire operation, program, or activity to be funded with Agency assistance.