FHLB-Des Moines pledges rural capital support

The Federal Home Loan Bank of Des Moines continues to demonstrate leadership on rural economic development issues with its April 26 announcement that it will commit $500 million for investment capital in rural areas over the next five years. The announcement came at the Home Loan Bank's rural issues

With its new Rural Capital Advance program, the Home Loan Bank will set aside $100 million each year for the five states in its service area: Iowa, Minnesota, Missouri, North Dakota and South Dakota. The funds will be available for banks to lend locally and will be earmarked for economic development.

"As the Home Loan Bank that serves hundreds of Main Street banks in small towns, it is important that we work with our members to support and stimulate economic growth in rural America," said Pat Conway, president of the Federal Home Loan Bank of Des Moines. "The lack of investment capital for rural development inspired the Rural Capital Advance. Hopefully, our program will encourage others to invest in rural America."

Conway cited the example of two partners interested in starting a business in a small town. They have $15,000 in owner equity to put toward the purchase and outfitting of a building. A bank that is a member of the Home Loan Bank would be able to finance the remainder of the start-up cost with a Rural Capital Advance.

The Rural Capital Advance program is an outgrowth of the Home Loan Bank's rural issues symposium last year. The advance can be used for many ventures, including business start-ups, business expansions, community facilities and quality of life projects.