UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Utilities Service 

RUS BULLETIN 1780-19 

RD-GD-2020-108

SUBJECT: Water and Waste Letter of Conditions

TO: RUS Water and Environmental Programs Staff.

EFFECTIVE DATE:

OFFICE OF PRIMARY INTEREST: Water and Environmental Programs. 

AVAILABILITY: This Bulletin is available on the Internet at 

http://www.rurdev.usda.gov/RDU_Bulletins_Water_and_Environmental.html 

PURPOSE: The bulletin is issued to establish conditions which must be 

understood and agreed to by you before further consideration may be given 

to the application.

DISCLAIMER: The contents of this guidance document does not have the force and effect of law and is not 

meant to bind the public in any way. This document is intended only to provide 

clarity to the public regarding existing requirements under the law or agency policies. 
RUS Bulletin 1780-19

Name and Address of Applicant 

Dear Applicant:

Loan and Grant Approval Conditions for 

XXXXXXX System Improvement Project

The following are examples of opening paragraphs that may be used in a 

Letter of Conditions. 

This letter establishes conditions which must be understood and agreed to by you before further 

consideration may be given to the application. The (loan and/or grant) will be administered on behalf of 

the Rural Utilities Service (RUS) by the State and Area staff of USDA, Rural Development. Any changes 

in project cost, source of funds, scope of services or any other significant changes in the project or 

applicant, must be reported to and approved by USDA, Rural Development, by written amendment to this 

letter. If significant changes are made without obtaining such approval, Rural Development may 

discontinue processing of the application.

This letter does not constitute loan and/or grant approval, nor does it ensure that funds are or will be 

available for the project.

The interest rate will be the lower of the rate in effect at the time of loan approval or the time of loan 

closing. If you do not want the interest rate changed to the rate at loan closing, you should submit a 

written request to USDA Rural Development staff at least xxx calendar days before loan closing. The 

loan will be considered approved on the date a signed copy of Form RD 1940-1, "Request for Obligation 

of Funds," is mailed to you.

Please complete and return the attached Form RD 1942-46, “Letter of Intent to Meet Conditions," and 

Form RD 1940-1, "Request for Obligation of Funds", within the next xxx days if you desire that further 

consideration be given your application.

Within xxx days of this letter, you must meet all of the conditions set forth which can be met prior to 

calling for construction bids. If you have not done so, Rural Development reserves the right to 

discontinue the processing of your application.

The docket may be completed on the basis of the following:

The following is a list of items that may be included in a Letter of Conditions .

a. RUS funding

b. Other funding sources and amounts

(i) Applicant contribution

(ii) State loan or grant

(iii) Other Federal funding
RUS Bulletin 1780-19

Page 2

(iv) Written evidence of other funding

c. Interim financing

d. RUS repayment schedule

(i) Repayment period

(ii) Deferment of principal

(iii) Interest rate

(iv) Pre-Authorized debit

(v) Debt service and other reserve accounts

e. Breakdown of project budget

f. Required number of new users

g. Security requirements

h. Loan Resolution

i. Land rights

j. Business operations

(i) User charges

(ii) Water meters (if applicable)

(iii) Connection charges

k. Insurance & bonding requirements

l. Obtaining and approval of professional services

m. Engineering & construction requirements

(i) Design

(ii) Bid

(iii) Architectural barriers

(iv) Other project related requirements
RUS Bulletin 1780-19

Page 3

n. Equal Opportunity/Civil Rights/Lobbying requirements

o. Environmental requirements

p. Records and audit requirements

q. Disbursement of RUS funds

u. Graduation requirements

r. Closing instructions

Sincerely,

(Signature)

Rural Development Manager/Program Director/State Director