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INFORMATIONAL LETTER #24
POLICY CODE: FJ
To: Superintendents of Schools
From: J. Duke Albanese, Commissioner of Education
Date: September 18, 2000
Subject: Federal Loans for School Renovation
It has come to the Department’s attention that there are three opportunities for districts to obtain low cost loans for school renovations in rural areas through the US Department of Education and US Department of Agriculture (USDA). These programs are some of the federal money available to schools that you may be reading about in the national press. Your district may be eligible for school renovation funds through the following two programs:
Qualified Zone Academy Bonds
Maine has, or will, receive approximately $4 million dollars over a three year period which is available via low cost (0-2%) through local banks. This money is available to “assist state and local educational agencies in financing the renovation of public school facilities, purchasing equipment, developing curricula, and training personnel”. There is a very limited amount of money available which is available on a first come – first served basis. Districts are eligible for up to $500,000 of QZAB in a three year period.
The USDA administers two other loan programs for rural development, which includes school renovation;
Guaranteed Loans are made by local banks and guaranteed by the USDA. Up to $3 million per loan can be borrowed at rates negotiated with local banks.
Direct Loans are made by the USDA to rural development projects. The amount they have to loan is limited and these loans are usually made to health care, fire department, and similar program, however, school renovation projects are eligible. These loans are made at below commercial market rates.
It is sometimes possible to mix the Guaranteed and Direct loans to achieve very favorable rates.
If you would like more information about any of these loan programs please contact the USDA Business & Cooperative Program Director, Alan Daigle, in Bangor at 990-9168 or your local bank.