USDA Rural Development – All You Need To Know

USDA Rural Development otherwise known as USDA-RD is a government agency set up by the United States Department of Agriculture. It was established to run programs that are designed to improve the quality of life and economy of the rural areas in America.

The Rural Development administers close to $16 billion in program loans, grants and loan guarantees through their programs. For such reasons as the development of resort cities and suburbs, the funding provided by RD sometimes goes to urban areas.

usda rural development home loan

Brief History of the USDA Rural Development

The RDA was established by the 1990 farm bill, which is an amendment to the Consolidated Farm and Rural Development Act of 1972. The agency is charged with the responsibility of administering Farmers Home Administration (FmHA a former US government agency) community and business programs as well as other USDA rural development programs.

The agency has gone through several modifications. However, the primary aim of establishing the RD agency and its responsibilities remain unchanged.

Operating units

The USDA Rural Development has three primary operating units – Rural Business-Cooperative Service (RBS), Rural Housing Service (RHS) and Rural Utilities Service (RUS).

The Rural Business-Cooperative Service (RBS)

Abbreviated as RBS, the Rural Business-Cooperative Service is an agency within the USDA Rural Development charged with the responsibility of administering different economic development programs to rural communities.

The goal of the RBS is the enhancement of the quality of life for persons living in the rural areas. This is possible with the provision of leadership in building competitive businesses. It includes sustainable cooperatives that can survive in the global community.

The agency achieves its set goal by investing financial resources in businesses and cooperatives in rural communities. It also provides technical assistance to these firms when needed. The establishment of strategic alliances and partnerships, leveraging public, private, and cooperative resources is also one of the ways the agency achieves its goals.

Some of the ways the RBS provides financial assistance to rural Americans include the provision of guaranteed loans, direct loans, grants to non-profit organizations, public bodies, agricultural producers and private rural businesses.

The Rural Housing Service (RHS)

The Rural Housing Service is another agency under the USDA usually located within mission areas. The RHS handles a wide range of programs designed to provide financing to moderate- low- and very-low-income Americans in rural areas. The RHS offers the rural residents with the following:

  • Homeownership options to individuals, which includes direct home loans and mortgage guarantees
  • preservation funding and housing rehabilitation
  • grants to non-profit organizations in rural areas that organize self-help housing services
  • farm labor housing
  • rental assistance to tenants of multi-family housing complexes funded by the RHS
  • assistance to developers of multi-family housing projects, such as apartment buildings or assisted housing for the elderly and disabled
  • community facilities like child care centers, libraries, schools, veterans shelters, municipal buildings, and firefighting equipment to Indian groups, local governments, nonprofit organizations and communities

Like its RBS counterpart, the agency also administers loan guarantees, grants and direct loans. The office also works with other federal establishments and various nonprofit and private organizations to help people living in rural areas in America.

The Rural Utilities Service (RUS)

The United States Rural Utilities Service otherwise known as RUS is an operating unit of the USDA Rural Development, an agency of the USDA. The RUS is responsible for the administration of programs designed to provide infrastructure improvements or infrastructure in rural areas. These upgrades include waste and water treatment, telecommunication services and electric power.

The RUS also serves territories of the United States of America, including the Virgin Islands, the Marshall Islands, Guam, the Federated States of Micronesia, and the Northern Mariana Islands.

Some of the programs administered by the Rural Utilities Service are briefly highlighted below:

Water and Environmental Programs – the RUS provides financial assistance for sanitary sewer, potable water, storm draining and solid waste facilities. This support is provided to rural areas and communities with a population of not more than 10,000.

Electric Programs –The RUS helps in maintaining, expanding, upgrading and modernizing the rural electrical infrastructure. It also provides support for demand-side management, conservation, and energy efficiency programs, as well as on-and off-grid renewable energy systems.

Telecommunication Services – The RUS helps to deploy telecommunications infrastructure in rural areas and communities.

Over the years, the USDA rural development has helped in the advancement of rural areas in the U.S and its territories, and this is evident in the different programs administered by the operating units of the agency.