USDA Rural Loans

USDA Rural Development Offers Grants and Loans for Energy Efficiency

The Rural Energy for America Program, or REAP, gives guaranteed loan financing and grant funding to producers of agriculture and small rural businesses. REAP was created by the USDA with the intentions of helping Americans afford renewable energy systems, and help make energy efficient improvements. This program furthers American energy independence by increasing the supply of sustainable energy, and encouraging the use of efficient energy systems. This way, America can depend less on foreign oil, and promote a clean environment.

REAP provides grants of up to $100,000 for companies or individuals that conduct energy audits and help provide information on renewable energy sources. As time goes on, these investments in energy for the private sector, will lower the costs of energy for business and producers of agriculture.

How has REAP helped?

The REAP program was created as part of the 2002 US Farm Bill. There was so much success since the program began, that it was reauthorized by Congress in 2014 with a minimum guarantee of $50,000,000 in yearly funding for 5 years. Successful projects funded by REAP are helping rural American design renewable energy systems, and put wealth back into their communities.

The USDA has given out $545 million, for over 9,000 REAP projects since 2009. The majority of these grants and loans went to projects that focused on renewable energy systems. Annually, these projects are expected to generate over 6 billion hours of electricity! To learn more about USDA rural housing loans stream or download the following episode of The Housing Hour.

Who Qualifies for REAP?

To qualify for REAP, you must be an agricultural producer with at least 50% of your gross income coming from agriculture. Small businesses in rural areas may also receive money from REAP. To get a grant or loan, you must have no credit problems or outstanding debts. If you don’t think you will qualify for REAP but still want to look into USDA loans, visit MIG online to learn more about USDA rural home loans.

Elligible Projects for USDA Loans

The USDA offers grants for up to 25% of the total project costs, and guarantees loans for up to 75% of the total costs. Recently the USDA announced that it will expand the application deadline, by accepting loan and grant applications all year long.

Projects that are eligible to receive funding must use commercially available technology. This means energy from solar panels, hydro power, hydrogen, renewable biomass, wind and more. Improvement projects that are eligible for REAP include:

• Heating
• Lighting
• Insulation
• Ventilation
• Fans
• Automated Controls
• Reduced Consumption of Energy