Rural Development Advance ("RDA")
The Rural Development Advance ("RDA") provides financing of economic development projects in rural areas that benefit individuals or families with incomes at 115% or less of area median income. A rural area is defined as a unit of general local government with a population of 25,000 or less.
The RDA provides a continuous source of low-priced, long-, medium-, and short-term funds available as advances or loans to members of the FHLBank. The RDA is priced below the FHLBank's regular advance rate. Long-term funding is available with an RDA advance, allowing you to match fund the terms and structure of the end loan, locking in a known spread for the life of the loan to hedge interest-rate risk. These special 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:
- Located in a neighborhood with a median income at or below 115% of the median income;
- Located in a rural Champion Community, or a rural Empowerment Zone, or a rural Enterprise Community, as designated by the Secretary of USDA;
- Located in a federal or state declared disaster area;
- Eligible for a federal Brownfield Tax Credit;
- Located in an Indian area, as defined by the Native American Housing Assistance and Self Determination Act of 1996;
- Located in an area affected by a federal military base closing or realignment;
- Located in an area identified as a designated community under the Community Adjustment and Investment Program.
Individual Criteria:
- 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;
- 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 include the following:
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