One RD Guarantee
This program is streamlined under the OneRD Guarantee Loan Initiative. For more information, visit www.rd.usda.gov/onerdguarantee
What does this program do?
- Federal and State-chartered banks.
- Savings and loans.
- Farm Credit Banks with direct lending authority.
- Credit unions.
Other non-regulated lending institutions may be approved by the Agency under the criteria of the OneRD Guarantee Loan Initiative regulation.
- For-profit or non-profit businesses.
- Federally-recognized Tribes.
- Public bodies.
- Individuals engaged or proposing to engage in a business.
- Individual borrowers must be citizens of the United States, or reside in the U.S. after being legally admitted for permanent residence.
- Private-entity borrowers must demonstrate that loan funds will remain in the U.S., and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.
- Rural areas not in a city or town with a population of more than 50,000 inhabitants.
- The borrower’s headquarters may be based within a larger city, as long as the project is located in an eligible rural area.
- The lender may be located anywhere in the United States.
- Projects may be funded in either rural or urban areas under the Local and Regional Food System Initiative.
- Check eligible addresses for Business Programs.
- Business conversion, enlargement, repair, modernization, or development.
- The purchase and development of land, buildings, and associated infrastructure for commercial or industrial properties.
- The purchase and installation of machinery and equipment, supplies or inventory.
- Debt refinancing when such refinancing improves cash flow and creates jobs.
- Business and industrial acquisitions when the loan will maintain business operations and create or save jobs.
- Lines of credit.
- Owner-occupied and rental housing.
- Golf courses or golf course infrastructure.
- Racetracks or gambling facilities.
- Churches or church-controlled organizations.
- Fraternal organizations.
- Lending, investment, and insurance companies.
- Agricultural production, with certain exceptions (1).
- Distribution or payment to a beneficiary of the borrower or an individual or entity that will retain an ownership interest in the borrower.
The loan guarantee percentage is published annually in a Federal Register notice. B&I loans approved in Fiscal Year 2022 will receive an 80 percent guarantee.
The lender, with Agency concurrence, will establish and justify the guaranteed loan term based on the use of guaranteed loan funds, the useful economic life of the assets being financed and those used as collateral, and the borrower’s repayment ability. The loan term will not exceed 40 years.
- Interest rates are negotiated between the lender and borrower.
- Rates may be fixed or variable.
- Variable interest rates may not be adjusted more often than quarterly.
- There is an initial guarantee fee, currently 3 percent of the guaranteed amount.
- There is a guarantee retention fee, currently 0.5 percent of the guaranteed portion of the outstanding principal balance, paid annually (2).
- Reasonable and customary fees for loan origination are negotiated between the borrower and lender.
- Qualifying projects may receive a reduced fee of 1 percent.
- The lender will conduct a credit evaluation using credit documentation procedures and underwriting processes that are consistent with generally accepted prudent lending practices and, also consistent with the lender’s own policies, procedures, and lending practices.
- The lender’s evaluation must address any financial or other credit weaknesses of the borrower and project and discuss risk mitigation requirements.
- The lender must analyze all credit factors to determine that the credit factors and guaranteed loan terms and conditions ensure guaranteed loan repayment.
- Credit factors to be analyzed include but are not limited to character, capacity, capital, collateral, and conditions.
- Applications are accepted from lenders through USDA local offices year-round.
- Interested borrowers should inquire about the program with their lender.
- Lenders interested in participating in this program should contact the USDA Rural Development Business Programs Director in the state where the project is located.
Contact the local Rural Development office that serves your area.
- Code of Federal Regulations, 7 CFR 5001.
- This program is authorized by the Consolidated Farm and Rural Development Act, 7 U.S.C. 1932.
(1) Agricultural production is eligible only if the project is vertically integrated, ineligible for USDA Farm Service Agency (FSA) farm loan programs assistance, and it is part of an integrated business also involved in the processing of agricultural products. Commercial nurseries, forestry, and aquaculture operations are eligible without these restrictions.
(2) The annual renewal fee is currently one-half of one percent (0.5%) of the outstanding principal loan balance as of December 31. The renewal fee rate is set annually by Rural Development in a notice published in the Federal Register. The rate, in effect at the time the loan is made, will remain in effect for the life of the loan. Annual renewal fees are paid by the lender and due on January 31. Payments not received by April 1 are considered delinquent and, at the Agency’s discretion, may result in cancellation of the guarantee to the lender.
Holders’ rights will continue in effect as specified in the loan note guarantee and assignment guarantee agreement. Any delinquent annual renewal fees will bear interest at the note rate and will be deducted from any loss payment due the lender. For loans where the loan note guarantee is issued between October 1 and December 31, the first annual renewal fee payment will be due January 31 of the second year following the date the loan note guarantee was issued.
NOTE: Please speak to your local program specialist before attempting to fill out any forms or applications. This will save you time in completing your application.
Interest rates are negotiated between the lender and borrower, subject to Agency review. They may be fixed, or variable, and variable interest rates may not be adjusted more often than quarterly.
USDA RD State Office
3001 Coolidge Rd.
East Lansing, MI 48823
517-324-5190 | Fax 855-813-7741
Public Information Coordinator
Community Programs Staff
Single Family Housing Staff
Business Programs Staff
Multi-Family Housing Staff
Gladstone Area Office
2003 Minneapolis Ave.
Gladstone, MI 49783
906-428-1060 Ext. 4
Sault Ste. Marie Office
Sault Ste. Marie, MI 49783
906-632-9611 Ext. 4
Traverse City Area Office
1501 Cass St., Suite A
Traverse City, MI 49684
231-941-0951 Ext. 4
West Branch Office
543 Progress St.
West Branch, MI 48661
989-345-5470 Ext. 4
Caro Area Office
1075 Cleaver Rd.
Caro, MI 48723
989-673-8173 Ext. 4
Grand Rapids Area Office
3200 Eagle Park Dr., Suite 100 B
Grand Rapids, MI 49525
616-942-4111 Ext. 6
Mason Area Office
525 N. Okemos St., Suite B
Mason, MI 48854
517-676-4644 Ext. 4
1525 North Elms Rd.
Flint, MI 48532
810-230-8766 Ext. 4
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