In an effort to address rural poverty, the U.S. Department of Agriculture, in partnership with the Mary Reynolds Babcock Foundation (MBRF) and others, has awarded low-interest loans totaling more than $400 million to community development finance institutions nationwide.
Through the collaboration, twenty-six CDFIs will receive Community Facilities grants ranging from $800,000 to $50 million to provide long-term low-interest loans to organizations working to build, acquire, maintain, or renovate essential community facilities; build the capacity of local service providers; and/or finance critical services such as education, health care, and infrastructure. The funds are being disbursed in partnership with the Uplift America Fund, a $22 million initiative launched by MBRF with additional support from the Ford, Heron, Northwest Area, Winthrop Rockefeller, Bank of America, and JP Morgan Chase foundations. Designed to strengthen the nonprofit lenders' position as borrowers, the grants can be used either as reserves — CDFIs will be required to hold $1 in reserve for every $5 they borrow — or for capacity-building initiatives. In addition, private financial institutions led by Bank of America will provide loan guarantees of up to $100 million for the first five years of the program.
"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 Michelle Mapp, CEO of the South Carolina Community Loan Fund, which will use its Uplift America grant to increase lending in the state's rural counties, many of which have poverty levels of between 20 percent and 30 percent.
"With vast expertise about the areas they serve, community development organizations are uniquely positioned to tailor place-based solutions," said Mary Reynolds Babcock Foundation 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."