Direct Loan Applicant Guidance Book: PDF | Spanish
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 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 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.
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 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:
- 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.
- 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
- 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)
- Request a Unique Entity ID number if your organization doesn’t already have one. It should not take more than a few business days to get your number.
- Register your organization with the System for Award Management (SAM) if you aren’t already registered. The registration is free, but you need to complete several steps.
Who can answer questions?
Contact your local RD office.
What governs this program?
- Direct Loans: 7 CFR Part 1942, Subpart A
- Grants: 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 Law Governs this Program?" You may also contact your local office for assistance.
NOTE: If state specific forms are not shown above, please refer to the application materials listed below to start the process of applying. Please ensure that your state is selected in the dropdown menu above to find the State Office contact information for this program and speak to a Community Programs Specialist before attempting to fill out any forms or applications. This will save you valuable time in the process.
Application Checklist for use with this program:
Current interest rates for the 1st Quarter of Fiscal Year 2025, effective October 1, 2024 – December 31, 2024::
Poverty: | 4.500%* |
Intermediate: | 4.125%* |
Market: | 3.875%* |
For this quarter, all loans may be obligated at the lower market rate.
Preliminary Architectural Report (PAR). All applications seeking funding through the Community Facilities programs require a PAR. This document provides the needed information for the Agency to evaluate the scope and merits of the proposed project. USDA Rural Development Instruction 1942-A Guide 6 offers instructions on completing a PAR that meets the Agency's requirements. If a project architect does not prepare the report, one way be consulted for estimating constructions and operations and management costs.
Rural Development (RD) Programs, such as Community Facilities (CF) and Multi-Family Housing (MFH), involve the construction of new buildings or renovation of existing facilities. The development of these facilities involves the need for architectural services for the preparation of plans, specifications, public bidding, contracting, construction, and construction monitoring.
Applicants, at the earliest possible time, should provide a Preliminary Architectural Feasibility Report, including the Cost Estimate, for the review by the RD Area Loan Specialist and RD State Architect. These two documents are needed to determine the project's feasibility. RD's State Architect will evaluate and provide architectural/construction guidance to the Applicants and their Architects, for RD financed architectural projects, in the following areas:
Initial site visit & evaluation of the proposed project
Preliminary Architectural Feasibilty Report
Agency concurrence of Owner/Architect Agreements
Agency acceptance of Plans & Specifications
Agency concurrence of Construction Contract documents
Construction & construction monitoring
Individual states may have particular requirements based on state and local regulations. Please select your state in the dropdown menu above to find your local contact for this program.
Contact the Environmental Coordinator, 402.437.5560-Phone or 855-207-0384-Fax.
- Environmental Firms familiar with Rural Development in Nebraska
- Template Environmental Consultation Letters
- Flood Plains: USDA Rural Development has specific policies regarding building in a flood plain. A map of the flood plain for your location can be found on the FEMA site.
- Endangered species: Information on state endangered species can be found at the Nebraska Games and Parks site.
Rural Development environmental requirements can be found here: RD 1970 Environmental Policies and Procedures. Benefits of the 1970 environmental regulations are described here: 7 CFR 1970 Benefits.
There are no other additional requirements at the national level. If there are additional state-specific requirements they will be listed above.
Nebraska State Office-Community Programs
Federal Building, Suite 308
100 Centennial Mall North
Lincoln, Nebraska 68508-3859
402.437.5551 Phone
855.207.0384 FAX
Ken Shaw, Community Programs Specialist
402.437.5561
Mary Sneckenberg, Community Programs Specialist
402.437.5567
Lincoln Office
Federal Building, Suite 308
100 Centennial Mall North
Lincoln, Nebraska 68508-3859
402.437.5551 Phone
855.207.0384 FAX
Luann Brown, Community Programs Specialist
402.437.5571
Niki Dittmer, Community Programs Specialist
402.437.5737
Marla Ourada, Community Programs Specialist
402.437.5598
Vacant, Community Programs Loan Assistant
402.437.5734
Vacant, Loan Specialist
402.437.5732
Southeastern Service Counties: Butler, Cass, Clay, Douglas, Fillmore, Gage, Hamilton, Jefferson, Johnson, Lancaster, Merrick, Nemaha, Nuckolls, Otoe, Pawnee, Polk, Richardson, Saline, Sarpy, Saunders, Seward, Thayer, Washington and York.
Norfolk Office
2601 Lakeridge Drive, Suite 2
Norfolk, Nebraska 68701
402.371.5350 Phone
855.207.0384 FAX
Anthony Guenther, Community Programs Specialist
Extension 120
Kearney Office
4009 6th Avenue
Kearney, Nebraska 68845-2386
308.455.9847 Phone
855.207.0384 FAX
Kelley Messenger, Community Programs Director
308.455.9837
Dave Fulton, Community Programs Specialist
308.455.9844
Kaleb Browning, Community Programs Specialist
308.455.9838
Central Servicing Counties: Adams, Blaine, Boyd, Brown, Buffalo, Cherry, Custer, Dawson, Franklin, Furnas, Garfield, Gosper, Grant, Greeley, Hall, Harlan, Holt, Hooker, Howard, Kearney, Keya Paha, Loup, Phelps, Rock, Sherman, Thomas, Valley, Webster and Wheeler.
North Platte Office
1202 S. Cottonwood, Suite 3
North Platte, Nebraska 69101
855.207.0384 FAX
Sara Pierce, Community Programs Specialist
308.221.3689
Western Servicing Counties: Arthur, Banner, Box Butte, Chase, Cheyenne, Dawes, Deuel, Dundy, Frontier, Garden, Hayes, Hitchcock, Keith, Kimball, Lincoln, Logan, McPherson, Morrill, Perkins, Red Willow, Scottsbluff, Sheridan and Sioux.