Wert-Berater, Inc.
USDA RURAL DEVELOPMENT · COMMUNITY FACILITIES

USDA Community Facilities Feasibility Study

Rural hospitals, clinics, schools, fire and EMS stations, libraries and municipal buildings — studies written to the questions a Community Facilities reviewer actually asks.

ProgramsCF guaranteed · CF direct
Guaranteed loans7 CFR Part 5001 (OneRD)
Direct loans7 CFR Part 1942, Subpart A
Core questionEssentiality and revenue support
Standard delivery10–15 business days
Fee basisFixed, never contingent

What a Community Facilities study has to prove

A Community Facilities project is not underwritten like a business. The Agency is financing something a rural community needs — a critical access hospital, a school, a fire station, a clinic, a public safety building — and the analysis has to establish two things at once: that the facility is essential to the service area, and that the sponsor has a revenue base that can carry the debt for the term of the loan.

Those are different burdens of proof than a B&I file. Essentiality is demonstrated with population served, distance to the nearest alternative facility, service-level data, and the condition or capacity limits of what exists today. Revenue support is demonstrated with the sponsor's own financial history, its taxing or rate-setting authority where it has one, payer mix and utilisation for healthcare, enrolment for schools, and the contractual or statutory sources behind each line.

What the file has to answer
  1. Who is served, and how many. A defined service area with a population count and a demographic profile, not a county name.
  2. What exists today. The nearest comparable facility, its distance, its capacity and whether it is accepting the demand.
  3. What the project changes. Capacity, service lines, response times, compliance with a standard the sponsor cannot currently meet.
  4. Where the money comes from. Rate revenue, tax levy, per-pupil funding, patient revenue by payer, contracts, and the history behind each.
  5. Whether coverage holds. Projections tied to the demand findings and stressed, with the point at which coverage breaks stated openly.

Guaranteed versus direct: which rule set applies

Community Facilities financing runs on two tracks, and the applicable regulation depends on which one your file is on. CF guaranteed loans sit inside the OneRD framework at 7 CFR Part 5001, alongside Business & Industry, REAP and Water & Waste. CF direct loans are administered under their own regulation, 7 CFR Part 1942, Subpart A.

The practical difference for the study is who reads it and what they weight. On a guaranteed file, the lender packages the credit and the Agency reviews the guarantee — so the report has to satisfy a commercial credit committee and a Rural Development reviewer with the same set of pages. On a direct loan, the Agency is the lender, and the essentiality and public-purpose analysis carries proportionally more weight. We ask which track you are on before scoping, because the emphasis moves.

The healthcare files, specifically

Rural hospitals, critical access hospitals, clinics and long-term care facilities are the most demanding CF studies, and the most commonly returned. The reason is almost always the same: a demand case built on population alone, with no payer analysis behind the revenue. A rural hospital's viability is a function of service-line volumes, the payer mix behind those volumes, reimbursement policy the sponsor does not control, and a physician and staffing pipeline in a market that is competing for the same clinicians.

We build those files with utilisation and discharge data for the service area, out-migration analysis showing where residents currently go for care and why, payer mix from the sponsor's own history, and a staffing plan tested against what the market can actually recruit. Where the numbers do not support the project as proposed, the report says so and identifies what would have to change — a determination a reviewer can rely on is worth more to a sponsor than an optimistic one that comes back with comments.

How we work a CF engagement

The engagement opens with a data request the day it is signed, because CF files slow down waiting on sponsor information — audited financials, the capital improvement plan, the rate or levy history, service-line volumes — not on the analysis. We work from sources a reviewer can check: Census and American Community Survey data at tract level, state health and education agency series, CMS and HRSA data for healthcare, the sponsor's own audited statements, and primary interviews with administrators and referring providers where the published data stops.

Standard delivery is 10 to 15 business days from a complete data room. The fee is fixed, quoted before work starts, and never contingent on the finding — a contingent fee would defeat the independence the Agency requires of the study's author.

Related reading

Frequently asked questions

Does every Community Facilities loan need a feasibility study?
No. The Agency and the lender decide based on the project and the sponsor. New facilities, significant service expansions, sponsors without an established operating and financial history, and larger requests are the usual triggers. If a study has been made a condition of the file, that condition is the operative requirement.
Who is eligible to borrow under Community Facilities?
Public bodies, community-based non-profits and federally recognised tribes, for essential community facilities in rural areas as the Agency defines them. Eligibility of both the borrower and the location is the Agency's determination, and it should be confirmed before a study is commissioned.
What makes a facility 'essential'?
In practice, evidence that the service area needs the facility and cannot reasonably obtain the service elsewhere — population served, distance and capacity of the nearest alternative, current service levels, and any standard the existing facility cannot meet. It is an evidentiary showing, not an assertion.
Can a municipality's tax base count as the repayment source?
Where the sponsor has taxing or rate-setting authority, that capacity is part of the analysis and is documented with the levy or rate history and any statutory limits on it. It does not remove the need to show the facility's own operating economics.
How is a CF study different from a B&I study?
A B&I study turns on market capture and commercial coverage. A CF study turns on essentiality, service area and the sponsor's revenue base — the same five analytical components, weighted very differently.
How long does it take?
Ten to fifteen business days from a complete data room is standard. Multi-site systems and hospital files with heavy service-line analysis can run longer, and we say so before you engage rather than after.
Talk to the analyst who would run your file
Fixed fee quoted in one business day · never contingent on the finding · 10–15 business day standard delivery
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