Telecommunications Infrastructure Loans & Loan Guarantees

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)

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