Rural towns can pay for fire stations and other public buildings with Community Facilities grants.
Rural communities that need to build libraries, schools, police stations or any number of other vital public amenities face large costs for their usually small budgets. The U.S. Department of Agriculture, through its Office of Rural Development, offers a funding program to help towns and counties with some of those costs with the Community Facilities Grants Program.
Recipient Eligibility
The USDA offers Community Facilities grants to communities with 20,000 people or fewer. Areas with especially low populations or low incomes receive preference, the department says.
The federal agency awards the grants to local government agencies, as well as nonprofits and tribal governments.
For the USDA to consider eligibility, applicants must not be able to find funding from commercial sources.
Project Eligibility
Community Facilities grants go toward the construction of what the USDA calls "essential community facilities," such as public safety buildings. Communities can also use the money to enlarge or improve any of the qualifying buildings, as well as the equipment needed to maintain the facilities.
The USDA says it looks for projects that have special initiatives, such as childcare centers for the federal Welfare-to-Work program.
Communities may not use the money for a building with commercial use or to rent it out.
Awards
The grants from the Community Facilities program can cover as much as 75 percent of a building project's costs. The USDA bases awards off a community's median household income and population.
The USDA defines priority areas for which communities receive awards: Communities with 5,000 residents or fewer; communities with median household incomes that are either below the poverty line or at 60 percent of their state's non-metropolitan median household income level; or communities that plan to use the building for public safety, health care or public services.
Loans
The USDA's Community Facilities program also offers two loans -- direct and guaranteed. The loans, both of which also go to communities with 20,000 people or fewer, base repayment amounts on financial sources such as revenues and tax assessments.
Both programs issue and obtain loans at three interest rate levels; the lowest level is 4.5 percent for poverty-level communities.
Communities can use the money for the same types of projects as with the grants.
Applying
Communities can apply for the USDA's grants by contacting their areas' Rural Development offices (see Resources). The offices can also provide more information on the program.
The field offices also handle loans. The USDA handles applications in two stages. In the first 45 days, staff determines eligibility, projects' priority statuses and how much money is available. The length of the second stage depends on the scope of the project, environmental reviews and any legal issues that arise.
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