Rural Development Advance (RDA)

The Rural Development Advance (RDA) provides financing for economic development projects in rural areas that benefit individuals or families with incomes at 115% or less of the area median income. A rural area is defined as a unit of general local government with a population of 25,000 or less.

RDA funding is a non-competitive source of low-priced, long-, medium-, and short-term funds that is available in the form of loans (known as advances) to HLB member community lenders. As part of the suite of Community Lending Programs, RDA Advances are priced below regular HLB advance rates. Long-term funding is available with an RDA Advance, so members can match-fund the duration and structure of the end loan better, locking in a spread for the life of the loan to mitigate interest rate risk. RDA Advances may be used to finance commercial and economic development projects that meet any of the geographic, individual, or small business criteria listed below:

Geographic Criteria:

  1. Located in a neighborhood with a median income at or below 115% of the median income;
  2. Located in a rural Champion Community, or a rural Empowerment Zone, or a rural Enterprise Community, as designated by the Secretary of USDA;
  3. Located in a federal- or state-declared disaster area;
  4. Eligible for a federal Brownfield Tax Credit;
  5. Located in an Indian area, as defined by the Native American Housing Assistance and Self Determination Act of 1996;
  6. Located in an area affected by a federal military base closing or realignment; and/or
  7. Located in an area identified as a designated community under the Community Adjustment and Investment Program.

Individual Criteria:

  1. The annual salaries for at least 51% of the permanent full- and part-time jobs, computed on a full-time equivalent basis, created or retained by the project, other than construction jobs, are at or below 115% of the median income;
  2. At least 51% of the families who otherwise benefit from (other than through employment) or are provided services by the project have incomes at or below 115% of the median income.

Small Business Criteria:

  • Projects that qualify as small businesses as defined by section 3(a) of the Small Business Act and implemented by the Small Business Administration under 13 CFR Part 121.

Examples of commercial and economic projects that qualify for RDA funding:

  • Small business loans
  • Daycare centers
  • Manufacturing facilities
  • Retail stores
  • Mixed-use buildings
  • Healthcare facilities
  • Educational facilities
  • Warehouse facilities
  • Grocery stores
  • Equipment purchases for commercial expansion 
  • Community services, such as fire stations and trucks
  • Acquisition, construction, refinancing or rehabilitation
  • Construction or rehabilitation of public or private infrastructure, such as roads, utilities, and sewers
  • Debt refinancing or consolidation for commercial business

 

RDA Success Stories

2 Developmental Day Centers in Upstate NY
Member: HSBC Bank USA
Sponsor: Heritage Christian Services, Inc.

Home Ownership Center in Norwich, NY
Member: HSBC Bank USA
Sponsor: Quaranta Home Ownership & Housing Services Center

› Other Success Stories