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April 23, 2002
Financing Rural Western Community Infrastructure
    by Anne Moore Odell

The Rural Community Assistance Corporation helps people in the western United States build homes, strengthen small communities and create environmental infrastructure.

Over the past three years, the Rural Community Assistance Corporation (RCAC)has stood out as a community development leader by making loans in the rural West that have helped to produce 1,580 units of affordable housing. Along with loans and technical support for affordable housing projects, RCAC also offers technical assistance and financing for community facilities and environmental infrastructure. Active in twelve western states—Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico,Oregon, Utah and Washington—RCAC’s staff provides the know-how for rural people to help themselves.

RCAC specializes in providing technical assistance and training to organizations that create farm worker housing. All types of safe and
affordable farm worker housing are supported by RCAC, including single family and multi-family, single rooms, rental housing, and preservation and
renovation of existing housing. RCAC also works as an advocate for farm worker housing issues at both the local and national level.

According to June Otow, RCAC’s Corporate Development Director, "RCAC is the lead agency of the Pacific Mountain Farmworker Partnership. The Partnership consists of 11 well-established farm worker housing agencies. The Department of Labor contracts with the Partnership through RCAC to increase housing for farm workers in the most severely impacted states in the country."

RCAC works with farm worker agencies to determine technical assistance needs, creating a plan in partnership with the agencies, tailored to their
communities’ specific needs. As Otow explained, "RCAC recognizes that sustainable housing development requires well-functioning and accountable organizations."

Along with their focus on farm worker housing, RCAC is one the West’s biggest supporters of self-help home building. Since 1980, RCAC has provided technical and management assistance to the U.S. Department of Agriculture (USDA) state staff and program grantees in eleven western

"In the mutual self-help program, a group of six to ten families and individuals work together under the guidance of a nonprofit housing
developer (self-help grantee) to build each others’ homes," said Otow. "With a construction supervisor, these groups perform at least 65 percent of the construction work and labor required (known as "sweat equity") to build their homes."

RCAC’s third area of affordable housing development is its community facility program. Community facilities include community health care
centers, education centers, fire, rescue and public safety organizations, childcare centers, adult day care centers, city halls, courthouses, business incubators and transportation centers among others. "The community facility lending program has grown to become a major product line," said Otow. "It has moved RCAC into the long term lending arena. Over the past three years we have originated 24 community facility loans totaling $9.9 million, six of which were long term loans."

RCAC has provided technical assistance concerning environmental infrastructure since its inception in 1978, with each state branch utilizing
rural development specialists with environmental certification. RCAC also works with all tribal nations within their eleven state area. The
environmental staff work together with the loan officers, and other staff to create needed services in rural communities. The creation of a sound environmental infrastructure in rural areas means in part that local communities must devise solutions to their own problems, provide
environmental education, and "achieve compliance" with their drinking water, wastewater and solid waste.

As part of their support of environmental infrastructures, RCAC publishes The Pacific Mountain Network News and The Pacific Mountain Review. Both publications are free for RCAC’s partners. These publications help keep
communities up to date and offer ongoing support.

RCAC provided its first loans in 1988; since 1996, RCAC has been certified as a Community Development Financial Institution (CDFI). "As of September 30, 2001 (the end of our fiscal year), RCAC had closed 170 predevelopment loans totaling $52 million," explained Otow. "These loans leveraged over $402 million for rural projects. RCAC also closed 36 long-term loans totaling over $18.5 million, which leveraged over $56 million."

Affordable housing continues to be RCAC’s largest lending area and the foundation of its lending activity. Over the past three years, RCAC has made 51 housing loans totaling $22.7 million.

Two types of loans are usually offered. Short-term loans, limited to three year terms, typically focus on unimproved land purchases, pre-development expenses, on and off site improvements, unit construction, rehabilitation costs and income stabilization. Long term loans are offered to rural communities with less than 20,000 people.

RCAC has formed partnerships with foundations, banks, religious organizations and governmental agencies to create its loan pool that offers low-interest loans to organizations that serve the rural poor. The investment is repaid to the investor with terms and rates negotiable.
Minimum investments are $100,000. At this time, RCAC does not accept investments from individuals although grants and donations from individuals are appreciated and are tax-deductible as allowed by law.

RCAC is in the second year of a 5-year strategic plan. Otow said "We are working hard to define our role in economic development technical
assistance. We are also working to develop a stronger leadership development and community capacity building component to our services. We see an increase in environmental lending and community facility lending."

With more than 115 staff members located in 29 locations throughout the west, RCAC is available to help serve the low and very low-income rural
people in the west. Working with local non-profits and municipalities, RCAC helps provide safe housing, water and community facilities to some of the people who need them most.


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