Telecommunications Infrastructure Loans & Loan Guarantees

Announcement : The Rural Utilities Service (RUS), a Rural Development Agency of the United States Department of Agriculture (USDA), is issuing a final rule to amend its regulations to address its ‘‘Buy American’’ requirement.

To apply for Telecommunications Infrastructure Loans & Loan Guarantees funding, visit RD Apply, our newly developed, online application system.  All loan applications starting January 2017 will need to be submitted to RUS through RD Apply as stated in the Open Letter from the Assistant Administrator . Additional information to assist applicants with their online applications can be found under the Forms & Resources tab.

What does this program do?
This program provides financing for the construction, maintenance, improvement and expansion of telephone service and broadband in rural areas. For more information on other programs administered by RUS Telecommunications please visit : http://www.rd.usda.gov/programs-services/all-programs/telecom-programs

Who may apply?
Most entities that provide telecommunications in qualified rural areas including

• State and local governmental entities
• Federally Recognized Tribes 
• Non-profits, including Cooperatives, and limited dividend or mutual associations
• For-profit businesses (must be a corporation or limited liability company)

What is an eligible area?

• Rural areas and towns with a population of 5,000 or less
• Areas without telecommunications facilities or areas where the applicant is the recognized telecommunications provider are eligible
• Check with your local RD office to determine whether the proposed service area qualifies

How may the funds be used?
Funds may be used to finance broadband capable telecommunications service

• Improvements
• Expansions
• Construction
• Acquisitions (in certain cases)
• Refinancing (in certain cases)
• For additional detail see Code of Federal Regulations 7 CFR 1735

What kind of funding is available?

• Cost-of-Money Loans are direct loans from USDA Rural Utilities Service
• Loan Guarantees of up to 80% allow private lenders, including the Federal Financing Bank (FFB), to extend credit to qualified borrowers in rural areas
• Hardship Loans may be used, at the sole discretion of USDA Rural Utilities Service, to assist applicants in meeting financial feasibility requirements for applications to serve underserved areas

What are the loan terms?

• Cost-of-money loans: fixed rate at current U.S. Treasury rates depending on loan maturity at time of each advance
• Loan Guarantees: fixed rate primarily from the Federal Financing Bank (FFB). Interest rates (Treasury rate plus 1/8%) vary depending on call options and the interim maturity rate selected at each advance, which may be as short as 90 days, with auto-rollover. Current rates available online, scroll down to “Treasury Constant Maturities” add 0.125% for FFB rate
• Hardship loans: fixed interest rate of 5% for up to 20 years and requires special qualifications

Are there additional requirements?

• Borrowers must have legal authority to provide, construct, operate and maintain the proposed facilities or services
• All facilities financed with the aid of federal dollars must be used for a public purpose
• May not duplicate similar services available in the same area
• Partnerships with other federal, state, local, private and non-profit entities are encouraged

Who currently participates in this program?
See our Borrower Directory for a list of current participants.

How do we get started?

• Applications for this program are accepted by the National Office year-round.
• Applicants should work with their local General Field Representative to ensure complete and eligible applications prior to submission.
• For Program Resources please refer the "Forms and Resources" Tab (forms needed, guidance, certifications etc…)

Who can answer questions about this program?
For questions about the Telecommunications Infrastructure Loan Program, please call the Loan Origination and Approval Division at (202) 720-0800.

What governs this program?

• Rural Electrification Act of 1936, as amended in 7 U.S.C. 901 et seq.
• 7 CFR 1735

Why does USDA Rural Development do this?
By helping private and non-profit providers secure the necessary financing, this program helps maintain a seamless nationwide telecommunications network that also provides access to broadband for education, healthcare, public safety and jobs for all Americans regardless of where they live.

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