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(512) 518-5200
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used for any real purpose. This material is not a committment to lend.
Austin USDA – Electric Program FAQs
Can I use a Rural Utillity Service (RUS) loan for the cost share required for Smart Grid grants?
The use of RUS loans will satisfy the Smart Grid program’s cost share requirement. Funds from any
Federal direct loan or loan guarantee can be used to satisfy the cost share requirements for Smart Grid
grants. This use is not prohibited by program statutes as found in Amendment 9.
I have purchased land out of Austin city limits and would like to build a house there, however,
the electric cooperative/utility is charging $20,000-$50,000 to get a line out to my land. Does
USDA Rural Development have a program to help pay for this connection?
Unfortunately, the cost for the connection is an issue between the cooperative/utility and the individu-
al. Try working with close neighbors and the utility concerned to resolve the issue with the connection.
In many cases, if the individual can show the cooperative/utility the potential growth of the area, the
cooperative/utility may be more willing to expand a line out for a more reasonable cost.
Is it true that I can only receive my capital credits (cooperative stock dividends) if I die?
This is not always true. Retirement policies regarding cooperative capital credit differ by cooperative.
Generally, a cooperative establishes a 10 to 15 year retirement cycle for the retirement of capital cred-
its. Because policies differ between cooperatives, it would be best to check with your cooperative’s
management or check their bylaws to determine what the cooperatives policies are regarding retire-
ment of capital credits.
Do you provide a program that helps me pay my electric/telephone/water bill if I can’t afford it?
Unfortunately, there is not a program offered to help pay utility bills. USDA Rural Development does
not have the programs or authority to oversee this issue. All charges and bill payments are strictly
between the individual and the utility provider.
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(800) 234-0907
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The information provided in this marketing material is for information purposes only. A thorough investigation has not been conducted. The information here should not be
used for any real purpose. This material is not a committment to lend.
Electric Program FAQs - Page 2
Does the USDA Rural Development Electric Programs finance any start up costs?
The USDA Rural Development Electric Programs will not finance any start up costs. They are only
responsible for financing construction of the infrastructure costs.
Does the USDA Rural Development Electric Programs finance merchant plants?
The USDA Rural Development Electric Program does not finance merchant plants because the power
generated from merchant plants is not targeted to any particular group of rural consumers. The USDA
Rural Development Electric Program only finances facilities that provide for rural consumers.
May I receive a loan to help finance the production of a wind generate system (or some other
type of renewable energy source) that I intend to sell to my local utility?
Yes, USDA Rural Development Electric Programs will make renewable energy loans to rural electric
providers. In order to be certain that your USDA Rural Development office provides individual loans,
check with you state office.
Who can apply for a USDA Rural Development electric loan or loan guarantee?
If the project is feasible from both an engineering and financial perspective, any entity that provides
electric service to rural consumers can qualify for an electric loan or loan guarantee.
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3. local
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(512) 518-5200
(800) 234-0907
Copyright © 2012 Advocate Financial Services, LLC. All Rights Reserved. Privacy Policy & Terms of Use
The information provided in this marketing material is for information purposes only. A thorough investigation has not been conducted. The information here should not be
used for any real purpose. This material is not a committment to lend.
Electric Program FAQs - Page 3
What type of loan programs does the USDA Rural Development provide?
The USDA Rural Development Electric Programs has a loan guarantee program and three loan pro-
grams, including:
Hardship Rate- provides loans at 5%
Municipal Rate- provides funds at the municipal rate (changes quarterly)
Treasury Rate- provides funds at the Treasury rate (changes daily)
Does the USDA Rural Development provide 100% of the funding?
It depends on the loan program. The USDA Rural Development will provide 100% of the funding for
the hardship and treasury rate loans. However, they require that for municipal rate loans, the entity
obtains 10% to 30% of the financing from outside sources.
What is the loan guarantee program?
While, the loan guarantee program is primarily used to finance the construction and acquisition of
generation and transmission projects, it can also be used to finance the construction and acquisition of
distribution facilities.
Who provides the funds under the loan guarantee program?
The majority of the loan guarantee’s program funds (roughly 99%) are provided by the Federal Fi-
nancing Bank.
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4. local
toll-free
(512) 518-5200
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Copyright © 2012 Advocate Financial Services, LLC. All Rights Reserved. Privacy Policy & Terms of Use
The information provided in this marketing material is for information purposes only. A thorough investigation has not been conducted. The information here should not be
used for any real purpose. This material is not a committment to lend.
Electric Program FAQs - Page 4
Are the interest rates locked in at the time of the loan?
Hardship Rate Program- no, the interest rates under this program are set at 5%.
Municipal Rate Program- no, the interest rates are established at the time of the adUSDAnce
and change quarterly
Treasury Rate Program- no, the interest rates are established at the time of the adUSDAnce
and change daily
Loan Guarantee Program- no, the interest rates are established at the time of the adUSDAnce
and change daily
It is important to note that you could have multiple interest rates under one loan.
How do I find what the current interest rates are?
Current interest rates can be found on the Interest Rates page.
What type of security is required by the USDA Rural Development for loans and loan guaran-
tees?
Usually, the current and future assets of the entity are guaranteed as security for the debt, and are pro-
tected by a loan contract and mortgage.
How do I get my electric product listed on the USDA Rural Development’s Electric Programs
standard list of materials?
General information on this is provided by the Technical Standards Committees.
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5. local
toll-free
(512) 518-5200
(800) 234-0907
Copyright © 2012 Advocate Financial Services, LLC. All Rights Reserved. Privacy Policy & Terms of Use
The information provided in this marketing material is for information purposes only. A thorough investigation has not been conducted. The information here should not be
used for any real purpose. This material is not a committment to lend.
Electric Program FAQs - Page 5
How long will it take to get my electric product listed on the list of standard materials?
If all necessary information is provided, the process should take between 2 and 3 months. Necessary
information includes:
Test reports
Drawings, and
Certifications
What is an “eligible country”?
An “eligible country” is any country that applies with respect to the United States an agreement ensur-
ing reciprocal access for United States products and services and United States suppliers to the mar-
kets of that country, as determined by the United States Trade Representative. A current list of eligible
countries for the Electric Programs is provided by USDA.
To contact a USDA loan expert, use the contact form to the right or call (800) 308-8503.
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