Together, America Prospers 

Community Facilities Direct Loan & Grant
 

Immediate Measures 

to Support Rural 

Communities Affected 

by COVID-19 

• Rural communities can use

Community Facilities Program

loans and grants to provide a

variety of items, such as 

ventilators, that are needed in 

response to the COVID-19

pandemic.

• Funds also may be used to build,

expand, modernize and renovate

health care facilities such as

hospitals, medical clinics, dental

clinics, nursing homes, or

assisted living facilities

• More than 100 types of projects

are eligible for Community

Facilities funding.

What does this 

program do? 

This program provides affordable 

funding to develop essential 

community facilities in rural areas. 

An essential community facility is 

defined as a facility that provides 

an essential service to the 

local community for the orderly 

development of the community in 

a primarily rural area, and does 

not include private, commercial, 

or business undertakings. 

Who may apply for this program? 

Eligible borrowers include: 

• Public bodies

• Community-based nonprofit

corporations

• Federally recognized Tribes

What is an eligible area? 

Rural areas including cities, villages, 

townships, and towns including Federally 

recognized Tribal lands with no more 

than 20,000 residents according to the 

latest U.S. Census Data are eligible for 

this program. 

How may funds be used? 

Funds can be used to purchase, 

construct, and/or improve essential 

community facilities, to purchase 

equipment, and to pay related 

project expenses. 

Examples of essential community 

facilities include: 

• Healthcare facilities such as

hospitals, medical clinics, dental

clinics, nursing homes, or assisted

living facilities

• Public facilities such as town halls,

courthouses, airport hangars, or

street improvements

• Community support services such as

child care centers, community centers,

fairgrounds, or transitional housing

• Public safety services such as

fire departments, police stations,

prisons, police vehicles, fire trucks,

public works vehicles, or equipment

• Educational services such as

museums, libraries, or private schools

• Utility services such as telemedicine

or distance learning equipment

• Local food systems such as

community gardens, food pantries,

community kitchens, food banks,

food hubs, or greenhouses

For a complete list see Code of 

Federal Regulations 7 CFR, 

Part 1942.17(d) for loans; 

7 CFR, Part 3570.62 for grants. 

What kinds of funding are available? 

• Low interest direct loans

• Grants

• A combination of the two above, as

well as our loan guarantee program.

These may be combined with

commercial financing to finance one

project if all eligibility and feasibility

requirements are met.

What are the funding priorities? 

Priority point system based on 

population, median household income 

• Small communities with a population

of 5,500 or less

• Low-income communities having

a median household income below

80% of the state nonmetropolitan

median household income.
Community Facilities Direct Loan & Grant
 

What are the terms? 

Funding is provided through a 

competitive process. 

Direct Loan: 

• Loan repayment terms may not be 

longer than the useful life of the 

facility, state statutes, the applicant’s 

authority, or a maximum of 40 years, 

whichever is less. 

• Interest rates are set by 

Rural Development, contact us 

for details and current rates. 

• Once the loan is approved, the 

interest rate is fixed for the entire 

term of the loan and is determined 

by the median household income of 

the service area. 

• There are no pre-payment penalties. 

• Contact us for details and 

current interest rates applicable 

for your project. 

Grant Approval: 

Grant funds must be available. 

Applicant must be eligible for grant 

assistance, which is provided on 

a graduated scale with smaller 

communities with the lowest median 

household income being eligible for 

projects with a higher proportion of 

grant funds. Grant assistance is limited 

to the following percentages of eligible 

project costs: 

Maximum of 75 percent when the 

proposed project is: 

• Located in a rural community having 

a population of 5,000 or fewer; and 

• The median household income of the 

proposed service area is below the 

higher of the poverty line or 60 percent 

of the State nonmetropolitan median 

household income. 

Maximum of 55 percent when the 

proposed project is: 

• Located in a rural community having 

a population of 12,000 or fewer; and 

• The median household income of 

the proposed service area is below 

the higher of the poverty line or 70 

percent of the State nonmetropolitan 

median household income. 

Maximum of 35 percent when the 

proposed project is: 

• Located in a rural community having 

a population of 20,000 or fewer; and 

• The median household income of the 

proposed service area is below the 

higher of the poverty line or 80 percent 

of the State nonmetropolitan median 

household income. 

Maximum of 15 percent when the 

proposed project is: 

• Located in a rural community having 

a population of 20,000 or fewer; and 

• The median household income of the 

proposed service area is below the 

higher of the poverty line or 90 percent 

of the State nonmetropolitan median 

household income. The proposed 

project must meet both percentage 

criteria. Grants are further limited. 

Are there additional requirements? 

• Applicants must have legal authority 

to borrow money, obtain security, 

repay loans, construct, operate, and 

maintain the proposed facilities 

• Applicants must be unable to 

finance the project from their 

own resources and/or through 

commercial credit at reasonable 

rates and terms 

• Facilities must serve rural area 

where they are/will be located 

• Project must demonstrate substantial 

community support 

• Environmental review must be 

completed/acceptable 

How do we get started? 

Contact your local RD office to discuss 

your specific project. Applications are 

accepted year round. 

Who can answer questions? 

Contact your local RD office. 

What governs this program? 

• Direct Loan: 7 CFR Part 1942, 

Subpart A 

• Grant: 7 CFR Part 3570, Subpart A 

NOTE: Because citations and other information may be subject to change, 

please always consult the program instructions listed in the section above 

titled “What Governs This Program?” You may also contact your local office for 

assistance. You will find additional forms, resources, and program information at 

rd.usda.gov. USDA is an equal opportunity provider, employer, and lender. 

Last Updated April 2020