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**[Rural Broadband Access Loan & Loan Guarantee Program]{.underline}**

*Broadband Service means any technology identified by the Administrator
as having the capacity to transmit data to enable a subscriber to
originate and receive high-quality voice, data, graphics and video. For
funding under 7CFR 1738, projects must offer data transmission services,
and may provide voice, graphics and video.*

**General Program Description**

This program is designed to provide loans for funding, on a technology
neutral basis, for the costs of construction, improvement and
acquisition of facilities and equipment to provide broadband service
***(minimum of 200Kb/s upstream and downstream)*** to eligible rural
communities. The program's goal is to ensure that rural consumers
benefit from the same quality and range of telecommunications services
that are available in urban and suburban communities.

**Applicant Eligibility**

The Rural Development Utilities Program (RDUP) makes broadband loans and
loan guarantees to legally organized entities providing, or proposing to
provide, broadband services in eligible rural communities. Types of
eligible entities include: cooperative, nonprofit, limited dividend or
mutual associations, limited liability companies, Indian tribes and
tribal organizations, and commercial organizations. Individuals or
partnerships of individuals are not eligible.

![](media/image1.png)An eligible rural community is defined as any
incorporated or unincorporated place in the United States, its
territories and insular possessions (including any area within the
Federated States of Micronesia, the Republic of the Marshall Islands,
and the Republic of Palau) that has no more than 20,000 inhabitants
based on the most recent available population statistics of the Bureau
of the Census.

To be eligible to receive a loan under this program, an entity: (1)
cannot be serving more than 2 percent of the telephone subscriber lines
installed in the United States; and (2) must have sufficient authority
to enter into a contract with RDUP and to carry out the purposes of the
proposed loan.

**Eligible Loan Purposes**

RDUP makes broadband loans and loan guarantees to:

-   Finance the construction, improvement, and acquisition of facilities
    and equipment to provide broadband service in eligible rural
    communities;

-   Finance broadband facilities leased under the terms of a capital
    lease, as defined in generally accepted accounting principals;
    financing will be limited to 5 years of lease costs;

-   Finance the acquisition by an eligible entity of another system,
    lines or facilities if the acquisition is necessary and incidental
    to furnishing or improving rural broadband service (can not exceed
    50 percent of requested loan amount); and

-   Refinance an outstanding obligation on another telecommunications
    loan made under the RE Act. The refinancing cannot exceed\
    40 percent of the loan amount.

**Types of Loans, Rates, and Terms**

-   **Direct Cost-of-Money Loan--** This loan will bear interest at a
    rate (the "Cost of Money Interest Rate") equal to the cost of
    borrowing to the Department of Treasury for obligations of
    comparable maturity.

-   **Private Loan Guarantee --** This loan shall bear interest at a
    rate set by the lender consistent with the current applicable market
    rate for a loan of comparable maturity.

-   **Direct 4 Percent Loan --** To be eligible for this loan bearing an
    interest rate of 4 percent, the applicant must be proposing to serve
    a rural community that:

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-   Has a population of less than 2,500 inhabitants;

-   Is not currently receiving broadband service;

-   Is located in a county with per capita personal income that is less
    than or equal to that percent of the national average per capita
    personal income which RDUP will publish in the Federal Register at
    the beginning of each fiscal year; and

-   Has a service area with a certain maximum population density,
    calculated as the total number of persons in the service area
    divided by the square miles of the service area. The maximum
    population density will be published by RDUP in the Federal Register
    at the beginning of each fiscal year.

**Security**

Terms and conditions of loans are set forth in a mortgage, note, and
loan contract. RDUP must be able to determine that the security for the
loan is reasonably adequate and that the loan will be repaid on time.

###### Credit Support

To be eligible for a loan, RDUP will require, as a condition to RDUP
financing, that an applicant provide credit support in an amount equal
to\
20 percent of the requested loan amount. The applicant must have, as
part of the minimum 20 percent requirement, cash or, in the case of
state and local governments, cash equivalents in an amount equal to
operating expenses for the first full year of providing service, as
determined by a feasibility study satisfactory to RDUP. If one full year
of operating expenses exceeds the minimum requirement, applicants will
be required to provide the entire amount for the full year of operating
expenses.

***Please visit our web site:***

**<http://www.usda.gov/rus/telecom/broadband.htm>**

For more information contact your nearest USDA Rural Development state
or local office: or you may contact Rural Development\'s national office
at (202) 720-4323. Or write to:

USDA Rural Development

Stop 0705

1400 Independence Avenue, SW

Washington, DC 20250-0705

Information is also available on our website at
http://www.rurdev.usda.gov

U.S. Department of Agriculture

Rural Development - Rural Business-Cooperative Program

(Revised December 2007)

National Office Web Site: http://www.rurdev.usda.gov\
South Dakota Web Site: http://www.rurdev.usda.gov/sd/

South Dakota State Office Telephone Number: (605) 352-1100

South Dakota State Office Facsimile Number : (605) 352-1146

South Dakota State Office TDD Number : (605) 352-1147

E-Mail Address: tammi.schone@sd.usda.gov

*The U.S. Department of Agriculture (USDA) prohibits discrimination in
all its programs and activities on the basis of race, color, national
origin, age, disability, and where applicable, sex, marital status,
familial status, parental status, religion, sexual orientation, genetic
information, political beliefs, reprisal, or because all or part of an
individual\'s income is derived from any public assistance program. (Not
all prohibited bases apply to all programs.) Persons with disabilities
who require alternative means for communication of program information
(braille, large print, audiotape, etc.) should contact USDA's TARGET
Center at (202) 720-2600 (voice and TDD). To file a complaint of
discrimination, write to USDA, Director, Office of Civil Rights, 1400
Independence Avenue, S.W. Washington, D.C. 20250-9410, or call (800)
795-3272 (voice), or (202) 720-6382 (TDD). "USDA is an equal opportunity
provider, employer, and lender." (RUS-3)*