ReConnect Loan and Grant Program – USDA
The ReConnect Program offers loans, grants, and loan-grant combinations to facilitate broadband deployment in areas of rural America that currently do not have sufficient access to broadband. In facilitating the expansion of broadband services and infrastructure, the program will fuel long-term rural economic development and opportunities in rural America.
Who May Apply
The entities considered eligible to apply for assistance under the ReConnect Program include:
- Limited Liability Companies and Limited Liability Partnerships
- Cooperatives or mutual organizations
- States or local governments, including any agency, subdivision, instrumentality of political subdivision thereof
- A territory or possession of the United States
- An Indian Tribe, as defined in Section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. §450b)
Co-Applicants are not eligible entities. If two entities would like to partner with each other in delivering broadband to areas without sufficient access, then one entity must take the lead on submitting an application.
Eligible Funding Purposes
Award funds may be used to pay for the following costs:
- To fund the construction or improvement of facilities required to provide fixed terrestrial broadband service.
Eligible facilities include buildings, land, and fixed wireless service. If other services will be provided over these facilities, then award funds may also be used to acquire the additional equipment. For example, awards funds may be used to purchase equipment that is required to comply with the Communications Assistance for Law Enforcement Act, 47 U.S.C §1001 et seq (CALEA).
- To fund reasonable pre-application expenses.
Funding for pre-application expenses may not exceed five percent of the award. Pre-application expenses must be included in the first request for advance of award funds and will be funded with either grant or loan funds. If the funding category applied for has a grant component, then grant funds will be used for this purpose. If pre-application expenses are not included in the first request for advance of award funds, they will become an ineligible purpose. Costs associated with satisfying the environmental review requirements are eligible for reimbursement under this category. Up to 3% of the total award can be used to cover costs associated with satisfying the environmental review requirements. The environmental review costs count as part of the overall 5% allowable for pre-application expenses.
- To fund the acquisition of an existing system that does not currently provide sufficient access to broadband (eligible for 100 percent loan requests only).
The cost of the existing system acquisition is limited to 40 percent of the award amount requested. After improvements are made, the upgraded system must meet the minimum requirements of the most recent FOA.
Award amounts under the FOA will be limited as follows:
- 100 Percent Grant
Up to $350,000,000 is available for grants. The maximum amount of grant funds that can be requested in an application is $25,000,000. However, to encourage broadband deployment in remote areas, if an applicant provides supporting information that demonstrates that the PFSA(s) is comprised 100 percent of areas classified by the USDA Economic Research Service as Frontier and Remote Area (FAR) Level 4, the applicant may request up to $35,000,000. A GIS layer of FAR Level 4 areas can be found on the ReConnect Program Service Area Map.
- 100 Percent Grant for Tribal Governments and Socially Vulnerable Communities
Up to $350,000,000 is available for grants. The maximum amount of grant funds that can be requested in an application is $25,000,000. However, to encourage broadband deployment in remote areas, if an applicant provides supporting information that demonstrates that the PFSA(s) is comprised 100 percent of locations within areas classified by the USDA Economic Research Service as FAR Level 4, the applicant may request up to $35,000,000. A GIS layer of FAR Level 4 areas can be found on the ReConnect Program Service Area Map.
- 50 Percent Loan / 50 Percent Grant Combination
Up to $250,000,000 is available for loan/grant combinations. The maximum amount that can be requested in an application is $25,000,000 for the loan and $25,000,000 for the grant. Loan and grant amounts will always be equal.
- 100 Percent Loan
Up to $200,000,000 is available for loans. The maximum amount that can be requested in an application is $50,000,000.
Financial Feasibility and Sustainability Requirements
Only projects that USDA determines to be financially feasible and sustainable will be eligible for an award under the ReConnect FOA. An eligible project must demonstrate a positive ending cash balance as reflected in the cash flow statement for each year of the forecast period and demonstrate positive cash flow from operations by the end of the forecast period. Eligible projects must also meet at least two of the following requirements: a minimum Times Interest Earned Ratio (TIER) requirement of 1.2, a minimum Debt Service Coverage Ratio (DSCR) requirement of 1.2, and a minimum Current Ratio of 1.2.
If an application has no existing debt, is not applying for any loans from this program or proposing to borrow funds from any other fund sources during the forecast period and is applying only for grant funds, only the Current Ratio will be applied and not the TIER or DSCR. For this situation, applications must only meet the minimum current ratio required of 1.2. Please contact the USDA General Field Representative in your state if you have further questions.
Financial Resources and Assistance
- Grant Funding Providers
- Loan Providers