2/17/2022: ReConnect Application Window Extended – The Rural Utilities Service (RUS) is in the process of extending the deadline for submission of applications for ReConnect funding under the Funding Opportunity Announcement (FOA) published on October 24, 2021, to Wednesday, March 9, 2022, at 11:59 a.m. Eastern. This extension will provide interested parties with an additional 15 days to submit an application for ReConnect funding.
- Local Government
- Private Sector
- State Government
Reserved for Energy
What does this program do?
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.
How may the funds be used?
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.
- To fund reasonable pre-application expenses.
- To fund the acquisition on an existing system that does not currently provide sufficient access to broadband (eligible for 100 percent loan requests only).
What are the funding limits?
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.
What are the 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.
What are the service area eligibility requirements?
To be eligible to receive ReConnect Program funds, a proposed project must meet the following criteria:
- Lack Sufficient Access to Broadband: At least 90% of households in the proposed funded service area (PFSA) must lack sufficient access to broadband service, as defined in the latest Funding Opportunity Announcement (FOA). The FOA published on October 25, 2021 defines sufficient access to broadband as at least 100 megabits per second (Mbps) downstream and 20 Mbps upstream.
- Serve All Premises in the PFSA: The proposed network must be capable of providing broadband service to every premises located in the PFSA at the time of application submission at the speed defined in the latest FOA. The speed defined in the latest FOA is 100 Mbps symmetrical service to every premise in the proposed funded service area (PFSA). Please note that “capable of delivering 100 Mbps symmetrical service to every premises” means that all premises in the PFSA must be able to receive this service at the same time.
- Be in a Rural Area: A rural area is any area that is not located in a city, town, or incorporated area that has a population of greater than 20,000 inhabitants or an urbanized area contiguous and adjacent to a city or town that has a population of greater than 50,000 inhabitants.
Are there additional requirements?
- Ineligible Service Areas: If any part of a PFSA is ineligible, the Rural Utilities Service (RUS) may request that an application be modified if the modification is deemed feasible. Otherwise, the application will be rejected.
- Overlapping Service Areas: RUS will not fund more than one project that serves any one given geographic area. However, RUS reserves the right to make funding offers or seek consultations to resolve partially overlapping applications to make as many eligible applications viable for consideration as possible. Therefore, when addressing instances where service areas overlap, the Agency may do the following: (1)Determine that the overlap is so insignificant that no agency action is necessary; (2)Request one or more applications to be revised to eliminate the overlapping territory; (3)Choose one application over another based on the amount of assistance requested, the number of awards already chosen in the area or state, or the need for the project in the specific area due to other factors; or (4)Choose the project that either scores higher, or in the judgement of the agency, is more financially feasible.
- Prior Funded Service Areas: RUS will not fund a project proposing to serve an area that has already received financial assistance. However, pursuant to the Consolidated Appropriations Act, 2021 (Pub. L. 116-260), the service areas of existing RUS borrowers without sufficient access to broadband, as defined in the latest FOA, are eligible for ReConnect funding. Prior funded service areas include: (1)RUS Broadband Loans: Service areas of borrowers that have RUS Broadband loans that are receiving sufficient access to broadband are ineligible. If an RUS borrower is not providing sufficient access to broadband in an area, any entity may apply to serve that area. Additionally, RUS Broadband Borrowers that have built out their service areas consistent with their application and award documents, but were not required to provide, and are currently not providing, sufficient access to broadband are eligible to apply for funding for these service areas; provided that they have not defaulted on, and have materially complied with their prior Broadband loan award requirements. Current RUS Broadband Borrowers that have received funding to provide sufficient access to broadband but have not yet built out their system are ineligible to apply for funding for these service areas. (2)RUS Community Connect Grants: Service areas that received grants under the RUS Community Connect Grant Program are eligible if they do not have sufficient access to broadband, except for those grants still under construction. (3)RUS BIP Grants: Service areas that received a 100% grant under BIP are eligible if they do not have sufficient access to broadband. (4)Service Areas with Other Funding: Applicants are encouraged to work with the Governor’s office for the states, and tribal governments for the tribal areas, where they are proposing to provide broadband service and submit information detailing where state funding has been provided. (5)Additional service areas restricted from funding will be identified in the latest FOA.
- Tribal Lands: A certification from the appropriate tribal official is required if service is being proposed over or on tribal lands. The appropriate certification is a Tribal Government Resolution of Consent. The appropriate tribal official is the Tribal Council of the Tribal Government with jurisdiction over the tribal lands at issue. Any applicant that fails to provide a certification to provide service on the tribal lands identified in the PFSA will not be considered for funding.