The North Dakota Rural Water Finance Corporation (NDRWFC) was created in December 1998 by the North Dakota Rural Water Systems Association (NDRWSA). In an effort to assist borrowers across the State of North Dakota with the overwhelming burden of financing capital construction projects, the NDRWFC, in conjunction with Raymond James, has created the Interim Construction Loan Program to provide funding for communities which have received a permanent loan commitment from the USDA, Rural Development (RD) or the Bank of North Dakota’s (BND) Community Water Facilities Revolving Loan Fund (CWFRLF). The program is structured to provide a mechanism for obtaining competitive fixed rate loans for construction projects at a very low cost of borrowing.
The program is designed as tax-exempt pooled financing with the NDRWFC as the program administrator. The loan rate is fixed for generally one year at a time. Loan funds are disbursed on an invoice requisition basis. The effective cost of borrowing is based on the loan rate less an interest earnings credit on undisbursed construction proceeds. The effective rate of funds is estimated at approximately 1.25% - 2.25%. Depending on the success of the program, the potential for an interest rebate to the borrower does exist but is not guaranteed. Should excess funds exist after the closing of the program, an interest rebate will be made to program participants. Any potential rebate will lower the effective cost of funds to the borrower.
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