Community Facilities Loans and Grants

To construct, enlarge, extend, or otherwise improve community facilities providing essential services to rural residents.

Related Programs

Examples of Funded Projects

Loans were made to: (1) establish rural health clinics in medically undeserved areas; (2) purchase fire fighting, rescue, and public safety equipment for rural areas; (3) construct new municipal buildings; (4) build new schools to serve rural communities; and (5) renovate hospitals to meet current life/safety codes.

Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.

Office - Consult your local telephone directory for Rural Development county or district office numbers.

If no listing, contact the appropriate Rural Development State Office listed in Appendix IV of the Catalog.

Program Accomplishments

Not available.

Uses and Use Restrictions

Community facilities include but are not limited to those providing or supporting overall community development such as child care facilities, food recovery and distribution centers; assisted-living facilities; group homes, mental health clinics, and shelters; and education facilities.

Projects comprise, community, social, cultural, transportation, industrial park sites, fire and rescue services, access ways, and utility extensions.

All facilities financed in whole or in part with RHS funds shall be for public use.

Eligibility Requirements

Applicant Eligibility

City, county, and State agencies; political and quasi-political subdivisions of States and associations, including corporations, Indian tribes on Federal and State reservations and other federally recognized Indian tribes; and existing private corporations which: (1) are operated on a not-for-profit basis; (2) have or will have the legal authority necessary for constructing, operating, and maintaining the proposed facility or service and for obtaining, giving security for, and repaying the loan; and (3) are unable to finance the proposed project from its own resources or through commercial credit at reasonable rates and terms.

Assistance is authorized for eligible applicants in rural areas of the States, Puerto Rico, the Virgin Islands, Guam, American Samoa, the commonwealth of the Northern Mariana Islands, the Marshall Islands, the Republic of Palaw, and the Federated States of Micronesia.

Beneficiary Eligibility

Farmers, ranchers, rural residents, rural businesses, and other users of such public facilities in eligible applicant areas as set out above.


Evidence of legal capacity and financial responsibility of the applicants and the economic feasibility of the project relative to the activity for which assistance is requested. This program is excluded from coverage under OMB Circular No. A-87.

Aplication and Award Process

Preapplication Coordination

The standard application forms as provided by the Federal agency and required by OMB Circular No.

A-102 must be used for this program.

An environmental assessment is required for this program.

This program is eligible for coverage under E.O.

12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires in applying for assistance if the State has selected the project for review.

Application Procedures

For direct loans and grants, applicants must file Standard Form SF-424 and supporting documentation at the local Rural Development Area Office. For guaranteed loans, the lender must file For RD 3575-1 and supporting documentation.

Award Procedures

After the preapplication has been reviewed by the Rural Development Area Office, it is forwarded to the Rural Development State Office for review and processing instructions. Following review by the State Office, the applicant is notified about eligibility, availability of funds, and if an application should be filed. Upon completion of application processing requirements and approval by the State Office, funds are made available to the Rural Development Area Office for delivery.




Consolidated Farm and Rural Development Act, as amended, Section 306, Public Law 92-419, 7 U.S.C. 1926.

Range of Approval/Disapproval Time

From 30 to 90 days.


If an application is rejected, the reasons for rejection are fully stated. The applicant may request a review of this decision.


Not applicable.

Assistance Considerations

Formula and Matching Requirements

Matching funds are not required but may be used in connection with the funds provided from the applicant or other sources. Funds are allocated to States based upon rural population, number of households below the poverty level, and rural unemployment. The statistical factor for eligibility is cities, towns or incorporated areas under 20,000 population for direct and guaranteed loans and 20,000 population for grants. The source is "Latest Decennial Census." This program has no statutory formula.

Length and Time Phasing of Assistance

A time limitation is not specified for the use of Community Facilities loan or grant funds. Funds will be awarded when all program requirements are met and the project can be completed on a timely basis. Funds may be advanced on an as needed basis by RHS to cover expenses for a 30-day period.

Post Assistance Requirements


Periodic reports are made to Rural Development.

Each borrower will monitor and report to RHS on actual performance during the construction of each project financed, or to be financed, in whole or in part with Community Facilities loan funds.


Periodic audits should be made as part of the recipient's system of financial management and internal control to meet terms and conditions of loans and other agreements. In accordance with the provisions of 7 CFR Part 3052, "Audits of States, Local Governments, and Nonprofit Organizations," which implement OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Nonprofit Organizations," nonfederal entities that receive financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 7 CFR 3052.


The borrower must maintain adequate records and accounts of the operation of the facility developed.

Financial Information

Account Identification

12-4155-0-3-452; 12-1951-0-1-452.


(Direct Loans) FY 07 $300,000,000; FY 08 est not available; and FY 09 est not reported. (Guaranteed Loans) FY 07 $210,000,000; FY 08 est not available; and FY 09 est not reported. (Grants) FY 07 est $17,000,000; FY 08 est not available; and FY 09 est not reported.

Range and Average of Financial Assistance

Direct Loans: $3,000 to $11,000,000. Average: $847,971. Guaranteed Loans: $20,000 to $17,000,000. Average: $2,377,243. Grants: $570 to $120,750. Average: $36,753.

Regulations, Guidelines, and Literature

7 CFR 1942, subpart A, Community Facilities Loans; 7 CFR 1942, subpart C, Fire and Rescue Loans; 7 CFR 3575, subpart A, Community Facilities Guaranteed Loans; 7 CFR 3570, subpart B, Community Facilities Grants.

Information Contacts

Regional or Local Office

Consult your local telephone directory for Rural Development county or district office numbers. If no listing, contact the appropriate Rural Development State Office listed in Appendix IV of the Catalog.

Headquarters Office

Deputy Administrator, Community Programs, STOP 0788, Department of Agriculture, 1400 Independence Avenue SW, Washington, DC 20250-0788. Telephone: (202) 720-1490.

Criteria for Selecting Proposals

Projects are selected for funding giving due consideration to State development strategies, serving the largest number of low income rural residents, and priority recommendations. Priority for funding will be given to those projects that will enhance public safety such as fire, police, rescue, and ambulance services, and projects for health care facilities.

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