USDA Accepting Grant and Loan Applications for Rural Broadband Expansion

The ReConnect Loan and Grant Program offers loans, grants, and loan/ grant combinations to facilitate broadband deployment in rural areas.

Funds under the ReConnect program are awarded to projects with a financially stable business model to bring high-speed broadband to rural homes, businesses, farms, ranches, and community resources such as emergency services, health care facilities, and schools. For purposes of the program, rural areas are those not located within:

A city, town, or incorporated area that has a population of greater than 20,000; or
An urbanized area adjacent to a city or town that has a population greater than 50,000.

An applicant must propose to serve an area that is currently without fixed broadband service at speeds of 100 Mbps download and 20 Mbps upload, and commit to building facilities capable of providing broadband at speeds of 100 Mbps download and upload (symmetrical) to every location in its proposed service area.

Applicants are required to build their proposed network within five (5) years of award and provide broadband service to every household, farm, and business located in the proposed service area.

Eligible applicants include state and local governments, including any agency, subdivision, instrumentality, or political subdivision thereof; corporations; limited liability companies and limited liability partnerships; cooperative organizations; etc. The entity that applies for the funding must own the resultant infrastructure.

Awards are to be used to fund:

The construction or improvement of facilities required to provide fixed broadband service, including fixed wireless;
Reasonable preapplication expenses in an amount not to exceed 5 percent of the award; or
The acquisition of an existing system that does not currently provide sufficient access to broadband for upgrading that system to meet the requirements of this regulation.

USDA will begin accepting applications for the latest round of ReConnect funding on November 24, 2021, and will stop accepting applications on February 22, 2022. USDA will provide up to $1.15 billion in loans and grants to continue to expand broadband availability in rural areas. An applicant may request funding from one of the following categories:

100% Grant: Up to $350 million is available for grants with a max amount of $25 million and at least a 25 percent match of the cost of the overall project;
100% Grant for Tribal Governments and Socially Vulnerable Communities: Up to $350 million is available for grants with a max amount of $25 million;
- Socially vulnerable community means a community or area identified in the Center for Disease Control's Social Vulnerability Index with a score of .75 or higher.
50% Loan / 50% Grant: Up to $250 million is available for loan-grant combinations. The max amount that can be requested is $25 million for both the loan and grant. The interest rate for the loan will be set at the Treasury rate; or
100% Loan: Up to $200 million is available for loans. The max amount requested is set at $50 million with a minimum of $100,000. The interest rate for a 100 percent loan will be set at a fixed 2 percent.

In making its funding decisions, the USDA will also consider, among other things, the economic needs of the community to be served; the extent which a provider will offer affordable service options; a project’s commitment to strong labor standards; and whether a project is serving tribal lands or is submitted by a local government, tribal government, non-profit or cooperative.

Application requirements:

Information on the applicant and the project including the estimated dollar amount of the funding request
An executive summary that includes, but is not be limited to, a detailed description of existing operations; key management; the applicant’s workforce; interactions between any parent, affiliated or subsidiary operation; the proposed project; and the source of the matching and other funds
A description of the Proposed Funded Service Area (“PFSA”) including the number of premises passed
Subscriber projections for broadband, video and voice services and any other service that may be offered
A description of the proposed service offerings and the associated pricing plan that the applicant proposes to offer
A map, utilizing the RUS mapping tool located on the agency's web page, of the PFSAs identifying the areas without sufficient access to broadband and any Non-Funded Service Area (“NFSA”) of the applicant. If an applicant has multiple NFSAs, they can elect to submit each NFSA individually or as a single file through the mapping tool
A description of the advertised prices by competitors in the same area
A network design and all supporting information as detailed in § 1740.64, which includes:
- Description of the proposed technology used to deliver broadband
- Demonstrate that all areas in the PFSA can be offered service
- Network diagram, identify cable routes, wireless access points
- Any other equipment required to operate the network
- A buildout timeline and milestones for implementation of project
- A capital investment schedule showing that the system can be built in five (5) years
Resumes of key management personnel, a description of the organization's readiness to manage a broadband services network, and an organizational chart showing all parent organizations and/ or holding companies (including parents of parents, etc.), and all subsidiaries and affiliates
A legal opinion that:
- Addresses the applicant's ability to enter into the award documents
- Describes all material pending litigation matters
- Addresses the applicant's ability to pledge security as required by the award documents
- Addresses the applicant's ability to provide broadband service under state or tribal law
Summary and itemized budgets of the infrastructure costs of the proposed project, including, if applicable, the ratio of loans to grants and any other sources of outside funding. The summary must also detail the amount of matching and other funds and the source of these funds. If the matching and other funds are coming from a third party, a commitment letter and support that the funds are available must also be submitted.
A detailed description of working capital requirements and the sources of those funds
Unqualified, comparative audited financial statements for the previous calendar year from the date the application is submitted
The historical and projected financial information required in § 1740.63
All information and attachments required in the RUS Online application system
A scoring sheet, analyzing any scoring criteria set forth in the funding announcement opening the application window
A list of all the applicant's outstanding and contingent obligations as required in § 1740.63
All environmental information as required by § 1740.27
- Requirements listed in 7 CFR part 1970
- Complete an environmental questionnaire
- Provide a description of program activities
- Submit all other environmental documentation as requested in the application system or by the agency after application is submitted
Certification from the applicant that agreements with or obligations to investors do not breach the obligations to the government under the standard award documents located on the agency's web page, especially distribution requirements, and that any such agreements will be amended so that such obligations are made contingent to compliance with the award documents. Such certification should also specifically identify which, if any, provisions would need to be amended.

To learn more about the ReConnect Loan and Grant Program, please click here. Please contact a member of the Ice Miller Broadband team for further questions.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.