Rural Electrification Loans and Loan Guarantees

To assure that people in eligible rural areas have access to electric services comparable in reliability and quality to the rest of the Nation and to assist borrowers in implementation of demand-side management, energy efficiency and conservation pro

Rural electric cooperatives, public utility districts, municipalities, corporations, and other qualified power suppliers including those located in the U.S. Territories, the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

Persons, businesses, public bodies, tribal entities, and other entities in rural areas (as defined in program regulations) or those currently served through RUS electric loans. Rural areas are defined in the Rural Electrification Act and program regulations as any area of the United States, or eligible insular areas, other than a city, town, or unincorporated area that has a population of greater than 20,000 inhabitants, or any area within a service area of an entity with an outstanding Rural Electrification Act loan on June 18, 2008.

Long-term, direct loans and loan guarantees to qualified organizations for the purpose of supplying or improving electric services on a continuing basis in rural areas.

Direct loans are generally made for a period up to 35 years, which approximates the expected useful life of the facilities financed. Provision is normally made for advances to be completed within 4 years, but this period is subject to extension if required. Advances of funds are made as required by the borrower. The terms and conditions of non-federal loan guarantees are negotiated between the borrower and the non-RUS lender, subject to RUS approval.

Applications for direct loan and loan guarantees are made by resolution of the board of directors of the borrowing organization. Application packages are prepared with the assistance of RUS. Information on submitting applications is contained in 7 CFR Part 1710 and 1714.

Depending on the amount of the loan requested, the RUS Administrator, Assistant Administrator, or appropriate Regional Director makes the final decision on approval of the loan upon a finding that it is economically feasible and serves the purposes of the Rural Electrification Act. Borrowers and Members of Congress are notified of the approval of a loan or loan guarantee directly, and the public is notified through normal media communications.

Distribution loans and loan guarantees are approved generally on an average of 3 to 6 months as funding becomes available. Loan guarantees for transmission and generation projects are approved generally on an average of 6 to 12 months. Larger projects may take longer.