USDA Rural Development Programs: Grants, Loans, Guarantees
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USDA Rural Development Program Overview

Article Summary

  • The United States Department of Agriculture’s Office of Rural Development provides grants, loans, and loan guarantees to help rural communities, along with providing technical support and other resources.
  • Access to grants, loans, and loan guarantees is dependent upon the qualifications of each program offered under the Rural Development agency.
  • In addition to providing financial assistance to rural communities in the United States, the Rural Development office also provides technical assistance and education.

The United States Department of Agriculture (USDA) is a federal government department established in the 1800s that has grown over the past century and a half to develop and execute laws and policies related to farming, ranching, forestry, rural communities, and other aspects of rural America. The USDA Office of Rural Development agency was created under the Department of Agriculture in 1990 with the objective of boosting the economies of rural communities and improving the overall quality of life.

I will explain the USDA Rural Development agency and the products and services related to its overall program so that you can be more familiar with what is available for people who want to prosper in a rural living environment.

The USDA has dozens of programs that are available to people living in rural parts of the United States. The availability and eligibility criteria of any specific program is dependent upon which state you live in (USDA programs are administered on a state by state basis) as well as upon meeting the USDA requirements for any specific program.

USDA Rural Development initiatives are typically met by providing three types of financial assistance and support: grants, loans, and guarantees.

In addition to providing financial support for rural communities, the Office of Rural Development provides education and resources such as publications for understanding how to make the most out of living in non-urban areas of the country. Most of the educational resources provided by the Office of Rural Development are listed as “Services”, including everything from providing technical assistance to environmental engineers working on preserving historic properties to creating and distributing workshops and guidebooks for sustainable utility management.

I will explain the financial support programs provided by the Office of Rural Development.

Rural Development Program Financial Support

  1. Grants: Rural Development grants consist of money awarded to an individual or entity by the Department of Agriculture to applicants who meet a set of criteria outlined in the grant program description. For instance, people over age of 62 who are considered very low income may be eligible through the Rural Development 504 Home Repair Program grant to receive money up to $7,500 to repair their homes. In the case of a grant, the money does not have to be repaid.
  2. Loans: Rural Development loans are funded for specific programs that require financial help on projects that are tied to the mission of the Office of Rural Development. These loans are typically specialized, lower-interest rate loans (interest rates are tied to US Treasury rates). For instance, the Energy Efficiency and Conservation Loan Program (EECLP) is available to business utility companies operating in unincorporated areas where the population does not exceed 20,000
  3. Guarantees: Rural Development guarantees are similar to how the FHA program works, where loans given by private lenders for rural development purposes are insured by the Office of Rural Development. For instance, Multi-Family Housing Loan Guarantee programs help private lenders create affordable rental housing for low- and moderate-income individuals and families in rural areas by guaranteeing the loans they provide to developers for specific projects.

A full list of all of the financial incentive programs offered by Rural Development can be found on their website.

Rural Development financial programs are broken into the following seven categories:

  • Business: These programs are available to for-profit corporations who are interested in or currently working on projects that complement the mission of the Rural Development office. Educational and non-profit entities are also eligible for programs in this category.
  • Community Facilities: Programs in this category are available for public bodies (usually an entity that provides a public related service and is connected to a government entity), community-based non-profit organizations, and federally-recognized Native American tribes.
  • Multi-Family Housing: Multi-Family Housing programs are available to state and local governments, non-profits, and Native American tribes. These programs are not available to individuals. The programs included in this category focus on providing affordable multi-family housing opportunities.
  • Single-Family Housing: These programs are available to individual home owners or renters and non-profit organizations  as well as Native American tribes. Funding for programs in this category are most commonly used to improve the housing situation for people who could not otherwise afford it.
  • Telecommunications: These programs are aimed at improving things like broadband and other telecommunications initiatives in rural communities, and are available to state and local governments, non-profit organizations, for-profits companies, and Native American tribes.
  • Electric: Programs included in the electric category are designed to help bring affordable electric energy to households, businesses, and other locations in rural areas. Grant, loans, and guarantees in the electric category can be applied to  anyone who meets the program requirements, including individuals, groups of individuals, state and local governments, tribes, and for-profit and non-profit companies.
  • Water and Environmental: Programs in this category are geared towards providing clean water to communities and keeping the environment clean and sustainable. Funds distributed in this category typically are given to state and local governments, non-profit organizations, and Native American tribes.

Determining Eligibility by Address

For many of these programs, the primary requirement is for the intended project to take place in an area or to affect an area that has been determined by the US Department of Agriculture to be eligible. Determining eligibility based on property location can be done by entering the address into the Department of Agriculture’s property eligibility lookup tool.

USDA Property Eligibility Lookup Tool

Accessing Help from the Office of Rural Development

Understanding the programs, including the intent of the programs as well as eligibility and application procedures,  administered by the Office of Rural Development can often be difficult. Receiving help from the agency itself can be done by calling their main office at 800-414-1226.  You can also find contact information for the various programs they support on their contact page.

In addition to contacting the Office of Rural Development’s federal support, you may have better luck contacting your local state representative, who will most likely be more familiar with projects you are interested in close to where you live, and who can help you answer questions specific to eligibility and access to grants, loans, guarantees, or rural technical assistance in your area.

Office of Rural Development state contacts are listed on their state offices web page.

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