Financial Assistance

Gearing up for FY 2009 --USDA Rural Development Now Accepting Grants

Technical Assistance and Training Grants: 

• Available to private non-profit organizations. 
• Applicants must have proven ability, background, experience, legal authority, and actual capacity to provide technical assistance and/or training on a regional basis to associations. 
• May be used to identify and evaluate solutions to water problems of associations in rural areas relating to source, storage, treatment and distribution, and to identify and evaluate solutions to waste problems of associations in rural areas relating to collection, treatment and disposal; assist associations that have filed a preapplication with the Agency in preparation of water and/or waste loan and/or grant applications; provide training to association personnel that will improve the management, operation and maintenance of water and waste disposal facilities and pay expenses associated with providing technical assistance and/or training.

Solid Waste Management Grants:     

• Available to private non-profit organizations and public bodies, including local governmental-based jurisdictional organizations. 
• Applicants must have proven ability, background, experience, legal authority, and actual capacity to provide technical assistance and/or training on regional basis to associations. 
• Objectives are to reduce or eliminate pollution of water resources and to improve planning and management of solid waste sites in rural areas. 
• May be used to evaluate current landfill conditions to determine threats to water resources, provide technical assistance and/or training to enhance operator skills in operation and maintenance of active landfills; provide technical assistance and/or training to help communities reduce the solid waste stream and provide technical assistance and/or training for operators of landfills which are closed or will be closed in the near future with the development and implementation of closure plans, future land use plans, safety and maintenance planning, and closure scheduling within permit requirements.

Applications are accepted Oct. 1-Dec. 31, 2008 and may be hand-delivered to the State Office by close of business December 31 or postmarked by midnight December 31 to be considered submitted on time. Applications received after December 31 will NOT be considered in that year's review and will be returned to applicant. Check http://www.usda.gov/rus/water/SWMG.htm for Solid Waste Management Grants and http://www.usda.gov/rus/water/tatg.htm for Technical Assistance and Training Grants. Contact: Denise Brosius-Meeks (402) 437-5559.

Low Income Housing Tax Credits (LIHTC)

Most of us have heard of Low Income Housing Tax Credits (LIHTC), but what exactly are they?  Hopefully, the following explanation will answer your questions and provide you with a basic understanding of just what they are and how they can be used. 

In 2007, 95% of the properties funded with a USDA Rural Development Section 538 Guaranteed Rural Rental Housing Program (GRRHP) loan guarantee had tax credits. Because Section 538 guarantees are used frequently with LIHTC, it is important to understand how tax credits are calculated. 

Because each state’s Housing Finance Authority (in Nebraska, it is the Nebraska Investment Finance Authority – NIFA) administers the LIHTC program differently, it is important to review the Qualified Allocation Plan (QAPs) for Nebraska to see how applicants receive tax credits. Tax credits come in two forms, 9% tax credits and 4% tax credits. In essence, the 9% tax credits provide a much larger benefit than the 4% tax credits.

To be eligible for 9% tax credits, there cannot be any federal subsidy in the transaction. By definition, any federal assistance that brings the loan below the Average Federal Rate (AFR) is a federal subsidy. That is the reason the Section 538 program gives Interest Credit that does not bring the loan below the AFR, so these properties qualify for 9% tax credits. Generally, 9% credits are worth approximately 70% of the value of the deal, and 4% credits are worth approximately 30% of the value of the deal. These values are then divided evenly over a 10-year credit period. While the credits are taken over a 10 year period, the compliance period is 15 years.  This means the property must stay affordable for 15 years despite the fact that the tax credits are already fully utilized during the first 10 years.

The tax credit amount is determined by the amount of eligible basis within that property.  The larger the basis, the larger the amount of tax credits.  Given a project’s cost structure, the larger the amount included in the tax basis the more credits are available. Eligible basis is the total amount of costs that can be used to calculate the tax credits. Eligible basis includes (1) the cost of new construction, (2) the cost of rehabilitation, or (3) the acquisition cost of an existing building. The cost of land is not included when determining adjusted basis. 

The tax credit amount is the product of the proportion of low income rental units to the total number of units and the eligible basis.  Within a property only those units that are designated and used as low income rental units are used to generate tax credits; therefore, any market rate units or commercial space is not included in the calculation of tax credits.

Once the tax credit amount is determined, the developer sells those credits to investors who purchase them for cash. This cash is used to do the majority of the renovations in the property.  The value of these tax credits has fluctuated over time from as high as 100% to as low as 75% or 80%.

For a more in-depth understanding of the way tax credits are calculated please refer to Title 26 § 42 of the IRS code.

Contact Linda Anders, (402) 437-5734.

Community Facility Programs

Community Facility Programs are available to public entities, non-profit corporations, and Indian tribes. These organizations must be unable to fund projects from their own resources or through commercial credit at reasonable rates and terms. Entities must be financially sound and have legal authority to own and operate the facility and to borrow and repay loans. Financial assistance is limited to rural communities with populations of 20,000 or less. Project examples: fire & rescue stations/equipment, libraries, hospitals, nursing homes, day-care centers, streets, utilities, etc. 

GUARANTEED COMMUNITY FACILITY LOANS are originated and serviced by commercial lenders. USDA provides a loan guarantee to the issuing bank offering risk protection. Guarantees are available for 100 percent of project costs with no minimum equity or down payment requirements. Rates and terms are negotiated, with fixed or variable interest rates for a maximum of 40 years.

DIRECT COMMUNITY FACILITY LOANS are issued and originated by USDA Rural Development. The maximum term is 40 years or for the useful life of the facility. Interest rates are determined on the median household income of the project’s servicing area.

COMMUNITY FACILITY GRANTS are available at a maximum of 75 percent of the eligible project costs not to exceed $100,000 per project. The applicant must be unable to meet the funding needs through their own resources or loan assistance. The priority of funding will be for small rural communities with very low incomes. Contact Denise Brosius-Meeks, (402) 437-5559.

June issue of "The Connection" available

The Rural Development Commission’s June issue of “The Connection” is available for viewing at www.ruralnebraska.info. This issue focuses on BECA – sharing the first of many success stories, a few grant statistics and information about the LB609 changes that will be incorporated into the August 15, 2008 application cycle. In addition, the revised BECA application can be found on the RDC’s Web site. For more information, e-mail Sandra Kaskie at sandra.kaskie@nebraska.gov.

NEP Assistance Services

Do you need help completing and submitting forms (i.e., reporting requirements)?
Understanding new and updated regulations?
Securing financial assistance (i.e., waste and/or litter reduction, abandoned wells, State Revolving Fund, etc.)?
Finding answers to miscellaneous questions that occur daily (i.e., open burning, demolition of old buildings)?; or
Knowing whom to contact?

The Nebraska Environmental Partnerships Program can help. NEP will come to your community and visit with your Board to discuss how NEP through the DEQ can help you. If you have questions, or concerns, and would like NEP to visit your community, please contact Jackie Stumpff. Each visit will be based on your community’s particular needs.

Jackie Stumpff, Coordinator
Nebraska Environmental Partnerships Program (NEP)
402/471-3193
1/877-253-2603 (toll free)
jackie.stumpff@ndeq.state.ne.us
For more information about this or any other NDEQ program, please contact
Jackie Stumpff.
www.deq.state.ne.us

CDAA Information

The Community Development Assistance Act (CDAA) empowers the Department of Economic Development (DED) to distribute a 40 percent state tax credit to individuals, businesses, corporations, insurance firms or financial institutions that make eligible contributions of cash, services or materials to approved community betterment projects.
CDAA was created in 1985 by the Nebraska Legislature to encourage financial support for community betterment organizations in their efforts to implement community service and development projects in chronic economically distressed areas.

Applicants must be a village or county government, or a non-profit 501 (c) (3) organization designated by the Internal Revenue Service.  The area to be served by the project must be designated by DED as an area of chronic economic distress.  Five types of projects can qualify through the program, including: employment training, human and medical services, physical facility and neighborhood development services, recreational and educational activities, and crime prevention.

No more than $25,000 in state tax credits can be approved per project per year, with a total of $350,000 in state tax credits to be allocated each fiscal year by DED.  Funding can be received for three years within a five year time period.  This is a great way to leverage the funds that people are willing to donate to community betterment.  Only funds donated to the project after applying to CDAA will be eligible for tax credits.   Applications are accepted on a continual basis and can be downloaded at www.neded.org. 

For more information, contact Lindsay Papenhausen, CDAA coordinator, at 800-426-6505 or email: lindsay.papenhausen@nebraska.gov.

Grant submission deadline August 15

Watch for upcoming information about the expanded uses for the Building Entrepreneurial Communities Act incorporating LB609.  Next grant application deadline is August 15, 2008.  New application information and forms will be available on www.ruralnebraska.info mid-June. Contact Linda Fettig, Rural Development Commission, linda.fettig@nebraska.gov or (308) 380-4966 for more information.

Value-Added Grants due Oct. 3

The next grant application deadline for the Value-Added Agriculture and Agricultural Innovation program is October 3, 2008. There will be changes in grant match requirements and guidelines. Watch for new application information and forms on www.ruralnebraska.info by early July. Contact Linda Fettig, Rural Development Commission, linda.fettig@nebraska.gov or (308) 380-4966 for more information.

Intern reimbursement program

The Nebraska EPSCoR office is again pleased to subsidize another round of our cost-share internship program. The Nebraska Engineering, Science and Technology Internship Program (NESTIP) has been created to defray some of the costs of employing a talented student studying at a Nebraska four-year college or university. The program will reimburse a Nebraska business up to fifty percent of the cost of employing a college or university student studying in Nebraska. Qualifying students are juniors, seniors, or graduate students majoring in science, technology or engineering at one of Nebraska's four-year colleges or universities. Maximum reimbursement is $5,000 per student per company during a six-month funding period. Application and reimbursement processes are very simple and require a limited amount of paper work. A NESTIP reimbursement request requires a completed student application and a completed company application and a completed mentor form if the student is a graduate student. Funding of requests is a competitive process. For application forms and a full listing of program regulations, please visit the Nebraska EPSCoR web site at http://epscor.unl.edu/programs/ or call us at (402) 472-8946.
Contacts: General information about EPSCoR and/or NESTIP: Dr. Fred Choobineh, P.E. fchoobineh1@unlnotes.unl.edu
Information about applications: Ms. Nancy Simnitt epscor@unl.edu