Agriculture Secretary Tom Vilsack committed $401 million to help reduce rural poverty.

The Community Facilities program funds will go to programs that have a proven track record of reducing poverty in rural communities.

Many of the projects will be in some of the nation's poorest rural areas, such as communities in Appalachia, the colonias along the U.S./Mexico border, and in the Mississippi Delta region. Long-term poverty disproportionately affects rural areas. Nearly nine out of 10 counties where 20% or more of the population has lived in poverty for 30 years or more are rural.

Agriculture Secretary Tom Vilsack unveiled an innovative partnership with community development organizations from across the country providing $401 million of Community Facilities program funds to recipients with a track record of successful programs to help reduce poverty. (Photo: urfinguss/Thinkstock)

"This effort builds on our commitment to lifting up the economic prospects of communities that have not benefited from the revitalization of rural America," Vilsack said. "By engaging with local and national partners, private-sector financial institutions and philanthropic organizations, USDA will inject a game-changing level of investment capital to reduce poverty in targeted rural areas where the capacity for growth has not been realized. As we have seen with the Obama Administration's Promise Zone initiative and USDA's StrikeForce effort, targeted, place-based investments can have a real impact on reducing poverty. This funding adds another important tool in that fight."

The financing has two unique features. First, private financial institutions, including Bank of America and others, will be providing guarantees for a portion of the loans. Second, the recipient community development organizations, or "re-lenders," may also have an opportunity to secure grants provided by seven of the nation's premier philanthropic organizations through a $22 million fund to assist in managing and capacity building. The Mary Reynolds Babcock Foundation will manage this grant fund.

Source: USDA