Rural Economic Development Grants (REDG)
provide funds to
electric and telephone utilities financed by USDA Rural Development to promote
sustainable rural economic development and job creation projects through the
operation of a revolving loan fund program.
Grants can be made (at the discretion of USDA Rural Development) to any rural
electric or telephone utility that is not delinquent on any Federal debt or in
The rural utility is required to operate and administer a revolving loan fund
program using the grant proceeds. To establish the revolving
loan fund, the utility is required to contribute to the fund an amount equal to
20 percent of the grant. This contribution will be provided by the utility from
its own sources and will remain as part of the fund until the fund is
Initial loans, at zero-interest, from the revolving loan fund may only be made
- Non-profit entities or public bodies for community development projects and
community facilities and services.
- Non-profit entities, public bodies, or for-profit entities for educational
- Non-profit entities, public bodies, or for-profit entities for medical
- Non-profit entities and public bodies for business incubators to assist in
developing emerging enterprises.
- Subsequent loans, at an interest rate not to exceed prime, may be made to
for-profit entities, non-profit entities, or public bodies for any rural
economic development purpose eligible under the program in accordance with
the utility's revolving loan fund plan. Subsequent loans are made using
repayment funds from the initial loan.
Grant funds will not be used by the utility or the third-party recipient for:
- Refinancing or paying off any existing debt owed by the third-party
- Electric or telephone purposes related either to the utility or the
- Projects located in areas covered by the Coastal Barrier Resources Act or
projects that would adversely impact the environment.
- Projects that will be used for residential purposes or entertainment
purposes at the residential level.
- The purchase of an established business or operation or to primarily
transfer property or real estate between owners without making substantial
improvements or additions that will result in long-term job creation.
- Projects that will result in the transfer of existing employment or business
activities from one area to another.
For more information about the program, please
contact the USDA Rural
Development Area Office nearest you.
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USDA Rural Development is an Equal Opportunity Lender, Provider and
Complaints of Discrimination should be sent to:
USDA, Director, Office of Civil Rights, Washington D.C. 20250-9410
June 15, 2009