The U.S.D.A. is seeking public comment on changes it claims will make it easier for rural communities to get loans for major projects.

Four loan guarantee programs reassure banks they’ll be repaid when towns borrow for infrastructure. Johnathan Hladik, at the Center for Rural Affairs, says more banks might be willing to work with rural communities under the plan, but he says rural leaders should review it with a skeptical eye.

“There’s every reason to think that this was something that was developed with banks in mind,” Hladik says. “So just to be sure, it’s going to be important for us to read that fine print and to make sure it’s a positive for those communities.” The proposal would streamline the process and is intended to reduce red-tape, according to a U.S.D.A. statement. That could entice more banks to participate. Hladik says the change might make things easier for towns, or it might make more money for large banks.

He has a recommendation for community leaders considering the loan guarantee programs. “Take a look at what these regulations look like and what those restrictions look like because this cannot be something that is good for banks only, it’s got to be good for the community,” Hladik says. Done right, he says, it could achieve the U.S.D.A.’s stated goal of encouraging private investment in rural communities for efforts like rural water, wastewater, energy, and community-building projects.

The public comment period goes through mid-September and the rule is slated to take effect on October 1st.

(By Amy Mayer, Iowa Public Radio)