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USDA Rural Development Offers Low-Interest Loans for Capital Projects

Tuesday May 7th, 2013

USDA Rural Development invites municipalities to apply for funding under its Community Facilities Direct Loan program. This program provides below-market loans to assist rural areas in the development of essential community facilities. The loans feature:

  • low interest rates, currently 3.5% fixed;
  • long terms (40 years on buildings, 10 to 20 years on vehicles); and
  • no loan fees.

Eligible borrowers: Those eligible to apply include local governments for municipalities with a population under 20,000 and nonprofit organizations that are headquartered in a municipality with a population under 20,000.

Eligible uses: Loan funds may be used for capital projects to construct, enlarge, or improve community facilities for health care, public safety, and public services. This can include costs to acquire land needed for a facility, pay necessary professional fees, and purchase equipment required for its operation. Borrowers have used loan funds to:

  • purchase vehicles (police, fire, ambulance, road maintenance, etc.);
  • purchase, renovate, or construct a new facility (headquarters, hospitals, community centers, libraries, municipal buildings, public roads and bridges, etc.); and
  • purchase equipment (medical, communications, computer, library books, buses, etc.).

Small grants may also be available for eligible projects. For more information, please visit If you have questions or are interested in applying please contact Alex Kauffman, Community Programs Specialist, USDA Rural Development, at (717) 237-2272.