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Federal Register / Vol. 86, No. 92 / Friday, May 14, 2021 / Rules and Regulations
1 Type of applicant. The applicant must meet the definition of an MDO as provided in 4280.302.
2 Citizenship. Non-profit entities, to be eligible to apply for status as an MDO, must be at least 51 percent controlled by persons who are either:
i Citizens of the United States, the Republic of Palau, the Federated States of Micronesia, the Republic of the Marshall Islands, American Samoa, or the Commonwealth of Puerto Rico; or ii Legally admitted permanent residents residing in the United States.
3 Legal authority and responsibility.
The applicant must have the legal authority necessary to carry out the purpose of the award.
4 Other eligibility requirements. The applicant must also provide evidence that it:
i Has demonstrated experience in the management of a revolving loan fund; or ii Certifies that it, or its employees, have received education and training from a qualified microenterprise development training entity so that the applicant has the capacity to manage such a revolving loan fund;
iii Is actively and successfully participating as an intermediary lender in good standing under similar loan programs; and iv Provides an attorneys opinion regarding the potential microlenders legal status and its ability to enter into program transactions at the time of initial entry into the program.
Subsequent to acceptance into the program, an attorneys opinion will not be required unless the Agency determines significant changes to the microlender have occurred.
b System for Awards Management.
All applicants must be registered in the System for Awards Management SAM
prior to submitting an application, unless determined exempt under 2 CFR
25.110. Loan and grant recipients must maintain an active SAM registration with current information at all times during which it has an active Federal award or an application under consideration by the Agency. The applicant must ensure that the information in the database is current, accurate, and complete. Applicants must ensure that they complete the Financial Assistance General Certifications and Representations in SAM.
c Minimum score. Once deemed eligible, an entity will be evaluated based on the scoring criteria in 4280.316 for adequate qualification to participate in the program. Eligible MDOs must score a minimum of sixty
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60 points in order to be considered to receive an award under this subpart.
d Ineligible applicants. An applicant will be considered ineligible if it:
1 Does not meet the definition of an MDO as provided in 4280.302;
2 Is debarred, suspended or otherwise excluded from, or ineligible for, participation in Federal assistance programs; or 3 Has an outstanding judgment against it, obtained by the United States in a Federal Court other than U.S. Tax Court.
e Delinquencies. No applicant will be eligible to receive a loan if it is delinquent on a Federal debt.
f Application eligibility and qualification. An application will only be considered eligible for funding if it is submitted by an eligible MDO. The applicant will qualify for funding based on the results of review, scoring, and other procedures as indicated in this subpart, and the applicant will further:
1 Establish an RMRF, or add capital to an RMRF originally capitalized under this program, and establish or continue a training and TA program for its microborrowers and prospective microborrowers; or 2 Fund a TA-only grant program to provide services to rural microentrepreneurs and microenterprises.
g Business incubators. Because the purpose of a business incubator is to provide business-based TA and an environment in which micro-level, very small, and small businesses may thrive, a microlender that meets all other eligibility requirements and owns and operates a small business incubator will be considered eligible to apply. In addition, a business incubator selected to participate as a microlender may use RMAP funds to lend to an eligible microenterprise tenant, without creating a conflict of interest under 4280.323c.
4280.311 Loan provisions for Agency loans to microlenders.

a Purpose of the loan. Loans will be made to eligible and qualified microlenders to capitalize RMRFs that it will administer by making and servicing microloans in one or more rural areas.
b Eligible activities. Microlenders may make microloans for qualified business activities and use Agency loan funds only as provided in 4280.322.
c Ineligible activities. Microlenders may not use RMRF funds for administrative costs or expenses and may not make microloans under this program for ineligible businesses or purposes as specified in 4280.323.
d Cost share. The Federal share of the eligible project cost of a
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microborrowers project funded under this section shall not exceed 75 percent.
The cost share requirement shall be met by the microlender using either of the options identified in paragraphs d1
and 2 of this section in establishing an RMRF. A microlender may establish multiple RMRFs utilizing either option.
Whichever option is selected for an RMRF, it must apply to the entire RMRF
and all microloans made with funds from that RMRF.
1 Microborrower project level option.
The loan covenants between the Agency and the microlender and the microlenders lending policies and procedures shall limit the microlenders loan to the microborrower to no more than 75 percent of the eligible project costs and require that the microborrower obtain the remaining 25
percent of the eligible project cost from non-Federal sources. The non-Federal share of the eligible project cost of the project may be provided in cash including through fees, grants, and gifts or in the form of in-kind contributions.
2 RMRF level option. The microlender shall capitalize the RMRF
at no more than 75 percent Agency loan funds and not less than 25 percent nonFederal funds, thereby allowing the microlender to finance 100 percent of the microborrowers eligible project costs. All contributed funds shall be maintained in the RMRF.
e Loan terms and conditions for microlenders. Program loans will be made to microlenders under the following terms and conditions:
1 Funds received from the Agency and any non-Federal share will be deposited into an account that will be the RMRF account and shall not be mingled with other MDO funds. The Agency will hold first lien position on the RMRF account, the LLRF account, and all notes receivable from microloans using Agency funds.
2 The RMRF account will be used to make fixed-rate microloans, accept repayments from microborrowers and reimbursements from the LLRF, to repay the Agency loan and, with the advance written approval of the Agency, to supplement the LLRF with interest or fee earnings from the RMRF.
3 The term of an Agency loan made to a microlender will be 20 years. If requested by the applicant MDO, a shorter term may be agreed upon by the microlender and the Agency. If a repayment workout is required after loan closing, the term of the loan may not exceed a 20-year period from the loan origination date.
4 Each RMAP loan made to a microlender during its first five years of
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