Back to the May-Jun 2019 issue

Need Project Funding? Check Out USDA Rural Development Programs

By Brad Finstad

A small city expanded its fire emergency services to several neighboring townships after purchasing a new rescue vehicle with up-to-date equipment and constructing a new fire hall. Drinking water is more affordable for another small city because its leaders replaced aging infrastructure. Still another small city now has a community center to provide a safe place and services for children, teens, and adults.

These are all examples of projects that can be—and have been—financed for small rural cities across Minnesota through the U.S. Department of Agriculture (USDA) Rural Development’s Community Programs.

Other examples of projects that have been made possible by these programs include upgrading water and wastewater systems to decrease the cost of regular maintenance and improve residents’ quality of life; purchasing new police vehicles and corresponding equipment to help address the public safety needs of the community; and building a new city hall with enough office space to house current and future employees and better serve the needs of the area.

Community Facilities Programs

Essential community infrastructure is key in ensuring that rural areas enjoy the same basic quality of life and services enjoyed by those in urban areas. Rural Development’s Community Facilities Programs offer direct loans, loan guarantees, and grants to develop or improve essential public services and facilities in rural communities. These amenities help increase the competitiveness of rural communities in attracting and retaining businesses that provide employment and services for their residents. (Learn more about Community Facilities Programs at

Cities and other public organizations, as well as nonprofit organizations and federally recognized American Indian Tribes can use the funds to construct, expand, or improve facilities that provide health care, education, public safety, and public services.

Projects include fire and rescue stations, city halls, health care clinics, hospitals, adult and child care centers, assisted living facilities, rehabilitation centers, public buildings, schools, libraries, and many other community-based initiatives. Financing may also cover the costs for land acquisition, professional fees, and purchase of equipment.

New toolkit to navigate the process

Community facilities help improve the basic quality of life and assist in the development and sustainability of rural areas. With several programs available, including the highly popular Community Facilities Direct Loan and Grant Pro¬gram, Rural Development has affordable options to help ensure economic vitality in rural areas. Rural Development recently created the Community Facilities Infrastructure Toolkit to help community leaders with the complex process that is required to successfully develop and construct a new facility. It outlines the major capacity, credit, and logistical challenges that particularly confront small cities and rural areas.

Funding for water and environmental projects

Through the Water and Environmental Programs (WEP), rural communities obtain the technical assistance and financing necessary to develop drinking water and waste disposal systems. Safe drinking water and sanitary waste disposal systems are vital not only to public health, but also to the economic vitality of rural areas. (Learn more about WEP at

WEP provides loan guarantees, direct loans, and grants for the construction of water and waste facilities in rural communities with populations of 10,000 or less. The most popular water and environmental program is the Water & Waste Disposal Loans & Grants program, which provides funding for clean and reliable drinking water systems, sanitary sewage disposal, sanitary solid waste disposal, and stormwater drainage to households and businesses in eligible rural areas.

WEP also provides funding to organizations that provide technical assistance and training to rural communities in relation to their water and waste activities. For example, the Emergency Community Water Assistance Grant helps eligible communities prepare, or recover from, an emergency that threatens the availability of safe, reliable drinking water.

In addition, the SEARCH Grant helps very small, financially distressed rural communities with predevelopment feasibility studies, design, and technical assistance on proposed water and waste disposal projects.

Individual help is available

With nine Community Programs Specialists located throughout the state, Rural Development can help walk your city through the entire process, from your first inquiry on eligibility to final ribbon cutting. To learn more about how Rural Development could help your community achieve its project goals affordably, visit

Brad Finstad is Minnesota state director with U.S. Department of Agriculture Rural Development.