Program 101

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:

  • Public bodies
  • Community-based non-profit 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, purchase equipment and pay related project expenses.

Examples of essential community facilities include:

  • Health care facilities such as hospitals, medical clinics, dental clinics, nursing homes or assisted living facilities
  • Public facilities such as town halls, courthouses, airport hangers 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 7CFR 1942.17(d) for loans; 7CFR 3570.62 for grants.

What kinds of funding are available?

  • Low interest direct loans
  • Grants
  • Loan Guarantees
  • A combination of the three above along with commercial financing may be used 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 5,000 or less
    • Low-income communities having a median household income below $32,165

What are the terms?

Funding is provided through a competitive process.

         Direct Loan:

  • Loan repayment terms may not the useful life of the facility, state statutes, the applicants 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 and population of the community
  • There are no pre-payment penalties
  • Contact us for details and current interest rates applicable for your project

 

Grant Approval:

  1. 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 less; 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.
  1. Maximum of 55 percent when the proposed project is:
  • Located in a rural community having a population of 12,000 or less; 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.
  1. Maximum of35 percent when the proposed project is:
  • Located in a rural community having a population of 20,000 or less; 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.
  1. Maximum of 15 percent when the proposed project is:
  • Located in a rural community having a population of 20,000 or less; 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.
  • Grant funds must be available

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
  • Tax exempt financing is not eligible for this program
  • Lender responsible for determining credit quality and economic feasibility of proposed loan; adequacy of equity, cash flow, security, history and management capabilities
  • 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 office to discuss your specific project
  • Applications for this program are accepted year round
  • Program resources are available online (includes forms needed, guidance, certifications)

Who can answer questions?
Contact your local RD office.

What governs this program?
Code of Federal Regulation, 3575 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 Law Governs this Program?" You may also contact your local office for assistance.

Forms & Resources

NOTE: Please contact your local State Office and speak to a Business Programs Specialist before attempting to fill out any forms or applications. This will save you valuable time in your application.

Engineering

Individual states will have particular requirements based on state and local regulations. Please contact the state office in the state where your project is located.

Environmental

Individual states will have particular requirements based on state and local regulations. Please contact the state office in the state where your project is located.

Architect

National content here

Contacts

State Office:

Main Phone Number: (530) 792-5800

USDA Rural Development
Attn: Community Programs
430 G St, Agency 4169
Davis, CA 95616

Anita Lopez, California Community Programs Director
(530) 792-5822

Dave Hartwell, CP Specialist
(530) 792-5817

Frank Risso, CP Specialist
(916) 425-4768

Christina Swegles, CP Specialist
(760) 948-4138

Pete Yribarren, CP Specialist
(805) 928-9269 ext. 107

Lantenna Hungate, CP Technician
(530) 792-5815

Local Offices:

Alturas Office: Serving Lassen, Modoc, Plumas, Shasta and Tehama Counties
Mike Colbert, Area Specialist
(530) 233-4137 ext. 112

Auburn Office: Serving Placer County
Michael Velez, Area Specialist
(530) 885-6505 ext. 101

Bakersfield Office: Serving Inyo and Kern Counties
Teresa Hogan, Area Specialist
(661) 336-0967 ext. 125

Davis Office: Serving Alameda, Colusa, Glenn, Monterey, San Benito, San Mateo, Santa Clara, Santa Cruz and Yuba Counties
Katie Schmitt, Area Specialist
(530) 792-5827

El Centro Office: Serving Imperial, Los Angeles, Orange, Riverside, San Bernardino and San Diego Counties
Luis Andrade, Area Specialist
(760) 352-4418 ext. 108

Daniel Cardona, Area Specialist
(760) 352-4418 ext. 107

Elk Grove Office: Serving El Dorado, Nevada, Placer, Sacramento, Sierra, Solano and Yolo Counties
Doug Colucci, Area Specialist
(916) 714-1104 ext. 106

Fresno Office: Serving Fresno County
Sally Tripp, Area Specialist
(559) 276-7494 ext. 132

Manteca Office: Serving Alpine, Amador, Calaveras, Contra Costa, Mono and San Joaquin Counties
Frank Risso, CP Specialist
(760) 347-3675 ext. 122

Merced Office: Serving Madera, Mariposa, Merced, Stanislaus and Tuolumne Counties
Deborah Cartwright, Area Specialist
(209) 722-4119 ext. 124

Jose Guardado, Area Specialist
(209) 538-3783

Antonio Ybarra, Area Specialist
(209) 722-4119 ext. 122

Oroville Office: Serving Butte, Colusa, Glenn and Sutter Counties
Colleen Crowden, Area Specialist
(530) 533-4401 ext. 123

Santa Maria Office: Serving San Luis Obispo, Santa Barbara and Ventura Counties
Al Correale, Area Specialist
(805) 928-9269 ext. 119

Santa Rosa Office: Serving Del Norte, Humboldt, Lake, Marin, Mendocino, Napa, San Francisco and Sonoma Counties
Reef Atwell, Area Specialist
(707) 526-6797 ext. 103

Quinn Donovan, Area Specialist
(707) 526-6797 ext. 105

Visalia Office: Serving Kings and Tulare Counties
Lisa Butler, Area Specialist
(559) 734-8732 ext. 103

Yreka Office: Serving Siskiyou and Trinity Counties
Kevin DeMers, Area Specialist
(530) 842-6123 ext. 112