Rural Development Loans for Land and Farms

USDA Rural Development administers more than fifty financial support programs for a wide range of rural applications.

Grants for Rural Energy for America Program Energy Audits and Renewable Energy Development

What is the purpose of this program?

This program aids rural small companies and agricultural producers by conducting and promoting energy audits and giving Renewable Energy Development Assistance (REDA).

Who is eligible to apply for this program?

  • Local and state governments
  • Tribes recognized by the federal government.
  • A land-grant college or university, as well as other institutes of higher learning.
  • Electric cooperatives in rural areas.
  • Entities with public power.
  • A state, tribal, or local government's instrument.
  • A Resource Conservation and Development Council (as specified in 16 United States Code 3451).

How can funds be spent?

Agricultural producers and rural small businesses must receive aid. Rural small enterprises must be located in eligible rural areas. Agricultural producers are exempt from this restriction. Energy audits must be included in the assistance provided along with Technical aid and site evaluation for renewable energy.

Examples of eligible project costs

  • Salaries directly related to the project
  • Travel expenses are directly tied to conducting energy audits or assisting with renewable energy development.
  • Supplies for the office
  • Administrative expenses, up to 5% of the grant, include utilities, office space, office operation expenses, and other project-related equipment.

The funds may not be used for:

  • Construction-related expenses
  • Equipment can be purchased or leased.
  • Payment of a judgment or a debt owed to the government
  • Goods or services are given by someone or something with a conflict of interest.
  • Expenses incurred as a result of preparing an application package.
  • Political or lobbying actions are funded.

What are the terms of the grant?

Applicants must submit separate applications, with each fiscal year restricted to one energy audit and one Renewable Energy Development Assistance (REDA). The maximum combined amount for an energy audit and a REDA award in a federal fiscal year is $100,000.

Direct Loans and Grants for Farm Labor Housing

What is the purpose of this program?

It provides low-cost finance for the construction of houses for year-round and migrant or seasonal domestic farm laborers.

Who is eligible to apply for this program?

This program aids qualified applicants who cannot get commercial credit on terms that will allow them to charge low-income tenants affordable rents. Borrowers must have the necessary credentials and experience to design and manage the project.

Eligible applicants:

  • Farmers, farmer associations, and family farm corporations
  • Farmworker and nonprofit organizations
  • The majority of state and municipal governments
  • Federally recognized tribes

What exactly is an eligible area?

Housing can be built in either urban or rural regions as long as there is a demonstrable need.

How can funds be spent?

The primary goal of this initiative is to build, upgrade, repair, and purchase houses for domestic farm laborers.

Funding may also be available for associated activities such as:

- Purchasing and improving land

- Purchasing furniture for the home

- Interest on a construction loan

Who is allowed to reside in rental housing?

  • Farm laborers in the United States, including those employed on fish and oyster farms and in on-farm processing
  • Farm laborers who are retired or disabled
  • You must be a citizen or permanent resident of the United States.
  • Households with very low to moderate-income

What kinds of funding are there?

  • Loans with low-interest rates
  • Grants are based on need and may not exceed 90% of project costs.

What are the terms of the loan?

- Payback period of up to 33 years

- 1% fixed interest rate

- Loan monies are also available for on-farm worker housing, funded on a first-come, first-served basis.

So, where do we begin?

Pre-applications are taken every year through a Notice of Funding Availability (NOFA) in the Federal Register, kicking off a two-phase application procedure. Pre-applications that have been chosen are invited to submit final applications.

Loan Guarantees for Businesses and Industries

What is the purpose of this program?

This program provides loan guarantees to lenders for rural business loans.

What types of lenders are eligible to participate in this program?

To run a successful lending program, lenders must have legal power, financial strength, and appropriate experience.

This includes:

  • Lenders are subject to supervision and credit evaluation by the proper federal or state government, such as federal and state-chartered banks.
  • Loans and savings
  • Farm Credit Banks that have direct lending power
  • Credit unions are a type of cooperative.
  • The Agency may also approve other non-regulated lending institutions based on the OneRD regulation's criteria.

Who is eligible for these guaranteed loans?

  • Businesses can be for-profit or non-profit.
  • Cooperatives.
  • Tribes recognized by the federal government.
  • Governmental entities.
  • Individuals who are engaged in or intend to engage in business.

What are the loan limits?

Individual borrowers must be citizens of the United States or legally authorized to permanent residency in the United States. Borrowers from private companies must demonstrate that loan monies will be kept in the United States. The facility being funded will essentially create new or save current jobs for rural Americans.

What constitutes an eligible area?

  • Rural locations are not located in a city or town with a population of more than 50,000 people.
  • As long as the project is in an eligible rural area, the borrower's headquarters might be located in a larger city.
  • The lender could be anywhere in the United States.
  • The Local and Regional Food System Initiative may fund projects in either rural or urban regions.

How may the funds from a guaranteed loan be used?

Examples of eligible uses include (but are not limited to):

  • Conversion, expansion, repair, modernization, or development of a business.
  • Purchase and development of the commercial or industrial property, buildings, and associated infrastructure.
  • You are purchasing and installing machinery and equipment, supplies, or inventory.
  • Debt refinancing only when it increases cash flow and creates jobs.
  • Acquisitions of businesses and industries where the loan will be used to keep operations running and generate or save jobs.