Program 101

Are applications currently being accepted: NO

What does this program do?

This program helps qualified nonprofits create revolving loan funds that can provide financing to extend and improve water and waste disposal systems in rural areas.

Who may apply for these grants?

Nonprofits that have:

  • Legal authority to operate a revolving loan fund.
  • Financial, technical and managerial capacity to comply with relevant state/federal laws and regulations.

How may the grant funds be used?

To create a revolving loan fund for eligible utility districts operated by:

  • State and local governmental entities
  • Nonprofits

What may the revolving loan fund be used for?

  • Pre-development costs for water and wastewater treatment projects.
  • Short-term small capital improvement projects that are not part of the regular operations and maintenance.

What are the revolving loan fund terms?

  • Maximum loan per borrower is $100,000.
  • Maximum term is 10 years
  • The interest rate is determined by utility district borrower and nonprofit that manages the revolving loan fund.

What is an eligible area?

Are matching funds required?

Partnerships with other federal, state and local entities are encouraged; however, in some circumstances a grant may be offered for 100 percent of the revolving loan fund start-up capital if funds are available.

How do we get started?

First, contact a Rural Development program specialist in the state or territory where the revolving loan fund would be available. The program specialist will help you begin the application process.

Who can answer questions?

  • Staff in your local RD office.
  • Lisa D. Chesnel, Water & Environmental Programs office - (202) 720-0499.

What governs this program?

  • Code of Federal Regulations, 7 CFR Part 1783
  • Section 306 of the Consolidated Farm and Rural Development Act and section 6002 of the Agricultural Act of 2014

Why does USDA Rural Development do this?

This program helps very small communities extend and improve water and waste treatment facilities for households and businesses. Good practices can save tax dollars, improve the natural environment and may be necessary for manufacturers and other types of businesses to locate or expand operations.

NOTE: Program details may change over time. Before you begin an application, please confirm you have the most current information by contacting a program specialist in your local office for assistance, or consult the Program Instructions listed in the section above titled "What Governs this Program?"

A revolving loan fund is a pool of public- and private-sector funds that recycles money as loans are repaid (revolved funds). Funding by a grant or a long-term/low-cost loan is used to start, replenish and expand revolving loan funds. Funding recipients are state or local government agencies and nonprofit entities structured to make loans. They must demonstrate economic need and have a plan that both meets program requirements and spurs growth.

Forms & Resources

NOTE: Please select your state in the dropdown menu above to find the state office contact information for this program, and speak to a program specialist before attempting to fill out any forms or applications. This will save you time in completing your application. Please also refer to the application guide listed below.


FY 2017 Revolving Loan Fund Program Application Guide (pdf)