USDA Rural Development works to assure access to

affordable, high-quality utility infrastructure for all people in rural America.

Rural Development’s Rural Utilities Programs serve a

leading role in improving the quality of life in rural

America by administering its electric, telecommunications, and water and environmental programs in a service-oriented, forward-looking, and financially responsible manner.

USDA Rural Development also acts as a catalyst for

private sector investment in rural areas through its utilities programs. Rural America's ability to succeed in the

new century depends, to a large extent, on investments in productivity-enhancing, modern infrastructure.

USDA stands ready to help rural America meet the

challenges of the future.

Electric Program

USDA Rural Development's Electric Program makes

loans and loan guarantees to finance the construction

of electric distribution, transmission and generation

facilities, including system improvements and replacements required to furnish and improve electric service

in rural areas, and for demand-side management,

energy conservation programs, and on-grid and off-grid

renewable energy systems. 

The Electric Program makes loans to corporations,

states, territories and subdivisions and agencies such

as municipalities, people's utility districts, and cooperative, nonprofit, limited-dividend, or mutual associations

that supply retail electric service to rural areas or that

provide for the power supply needs of rural distribution

borrowers. The program also provides financial assistance to rural communities having extremely high costs

to acquire, construct, extend, upgrade, and otherwise

improve energy generation, transmission, or distribution facilities. The Electric Program services approximately 700 active electric borrowers in 46 States.

Most USDA-financed rural electric systems have a twotiered organizational structure. Retail consumers are

members of the distribution cooperative that provides

electricity directly to their homes and businesses. Most

distribution cooperatives, in turn, are members of power

supply cooperatives, also called "generation and transmission" or "G&T" cooperatives, which generate and/or

procure electricity and transmit it to the distribution

member systems.

The Electric Program offers the following sources of

financing assistance: Hardship Loans, Municipal Rate

Loans, Treasury Rate Loans, Guaranteed Loans,

Renewable Energy Projects (solar, wind, hydropower,

biomass, or geothermal), and Assistance to Rural

Communities with Extremely High Energy Costs (loans

and grant assistance). The primary differences between

the programs are the qualifying criteria and the interest

rate for each type of financing.

Telecommunications 

Programs

Rural Development telecommunications borrowers

today provide single-party service to nearly all customers over a digitally switched, state-of-the-art network. By providing a leadership role in financing and

telecommunications standards, USDA continues to

help build the high-quality information pathways that

serve rural America today. 

The level of investment required to continue providing

the infrastructure needed for rural economic development is higher today than ever before. New information

capabilities need advanced technologies, less developed rural areas need better infrastructure, and some

areas still have no service at all. USDA Rural

Development offers the following sources of financing

assistance to telecommunications providers in rural

America: Hardship Loans; Cost-of-Money Loans; Rural

Telephone Bank (RTB) Loans; and Guaranteed Loans.

Providing Rural America With Essential

Utility Services

Rural Utilities Programs
Distance Learning and Telemedicine Program

USDA Rural Development's Telecommunications

Program also administers the Distance Learning and

Telemedicine (DLT) Program, which is designed specifically to meet the educational and health care needs of

rural America. Through loans, grants, and loan and

grant combinations, advanced telecommunications

technologies provide enhanced learning and health

care opportunities for rural residents.

Information about the DLT Program is available from

the USDA Rural Development Utilities Programs

national office. Each year, there is a window for submitting grant applications that are scored and awarded on

a competitive basis. Applications for loans and the

loan/grant combinations are accepted throughout the

year.

Rural Broadband Access Program

The Rural Broadband Access Loan and Loan

Guarantee (Broadband) Program is designed to provide loans for the costs of construction, improvement

and acquisition of facilities and equipment to provide

broadband service 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.

Water and Environmental 

Programs

USDA Rural Development’s Water and Environmental

Programs improve the quality of life and promote economic development in rural America. Direct loans are

made to develop drinking water and wastewater systems, including solid waste disposal and storm

drainage, in rural areas and in cities and towns with a

population of 10,000 or less. Funds are available to

public entities, such as municipalities, counties, specialpurpose districts, and Indian tribes. In addition, funds

may be made available to nonprofit corporations and

cooperatives. 

Priority is given to public entities, in areas with less than

5,500 people, to restore a deteriorating water supply, or

to improve, enlarge, or modify a water facility or an

inadequate waste disposal facility. Preference is also

given to requests that involve the merging of small facilities and those serving low-income communities. 

Applicants must be unable to obtain funds from commercial sources at reasonable rates and terms. The

maximum term for all loans is 40 years. However, no

repayment period may exceed State statutes (in some

States) or the useful life of the facility. Interest rates may

be obtained from USDA Rural Development field

offices. 

Grants are available to applicants where the median

household income of the service area is below the

State's nonmetropolitan median household income and

grant funds are necessary to reduce user rates to a reasonable level. Guaranteed loans may be made for the

same purpose as direct loans. They are made and serviced by lenders such as commercial banks. Guarantees do not exceed 90 percent on any loss of interest

and principal on the loan. Applications for direct and

guaranteed loans and grants funds may be submitted

at any time.

Technical Assistance and Training and Solid

Waste Management Grants are available to help

nonprofit organizations deliver services to rural water

and waste disposal systems. Pre-applications may be

filed between Oct. 1 and Dec. 31 to compete for that fiscal year's funding.

The Rural Water Circuit Rider Technical

Assistance Program is operated under a contract

with the National Rural Water Association. Assistance is

available to help rural water systems and operational,

financial, and managerial needs.

For More 

Information

For additional information about any USDA Rural

Development Rural Utilities program, call (202) 720-

9540 or visit the Rural Utilities home page at:

www.usda.gov/rus/

PA 1678

Revised December 2004

The U.S. Department of Agriculture (USDA) prohibits

discrimination in all its programs and activities on the

basis of race, color, national origin, sex, religion, age,

disability, political beliefs, sexual orientation, or marital

or family status. (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: USDA,

Director, Office of Civil Rights, Room 326-W, Whitten

Building, 14th and Independence Avenue, SW.,

Washington, D.C. 20250-9410 or call (202) 720-5964

(voice TDD). USDA is an equal opportunity provider

and employer.