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USDA Rural Energy for America Program (REAP) Loans

Implement renewable energy systems and upgrade or install energy-efficient equipment with a USDA REAP loan. The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Agricultural producers may also apply for new energy efficient equipment and new system loans for agricultural production and processing.

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What is a USDA REAP Loan?

The USDA Rural Energy for America Program (USDA REAP) provides financing in the form of grants and guaranteed loans for purchasing and installing renewable energy systems and making energy efficiency improvements.

Eligible applicants:

  • Agricultural producers – those directly engaged in agricultural production (at least 50% of historical gross income) in rural and non-rural areas
  • Rural small businesses – a business or utility located in an area with 50,000 or fewer residents (look up location eligibility here)

USDA REAP Loan Requirements, Amounts, Rates, Fees and Terms


  • Applicants must provide at least 25% of the project cost if applying for loan
  • All projects must have technical merit and utilize commercially available technology
  • Energy efficiency projects require an energy audit or assessment

Loan Amounts

  • Finance up to 75% of eligible project costs
  • $25,000,000 maximum loan amount
  • $5,000 minimum loan amount

Interest Rates

  • Negotiated between lender and borrower
  • Cannot exceed USDA maximum
  • May be fixed or variable


  • Initial guarantee fee – 1% of guaranteed loan amount
  • Guarantee retention fee – 0.25% of the outstanding principal balance, paid annually
  • Loan origination fee – negotiated between lender and borrower

Repayment Terms

  • Real estate – 30 years
  • Equipment – 15 years or useful life, whichever is less
  • Real estate + equipment – 30 years
  • Working capital – 7 years

How Can Your Business Use a USDA REAP Loan?

Farmers, ranchers and small business owners can use USDA REAP loans in a variety of ways to lower energy costs and reduce reliance on fossil fuels.

Funds may be used for renewable energy systems, such as:

  • Biomass (for example: biodiesel and ethanol, anaerobic digesters, and solid fuels).
  • Geothermal for electric generation or direct use.
  • Hydropower below 30 megawatts.
  • Hydrogen.
  • Small and large wind generation.
  • Small and large solar generation.
  • Ocean (tidal, current, thermal) generation.

Funds may also be used for the purchase, installation and construction of energy efficiency improvements, such as:

  • High efficiency heating, ventilation and air conditioning systems (HVAC).
  • Insulation.
  • Lighting.
  • Cooling or refrigeration units.
  • Doors and windows.
  • Electric, solar or gravity pumps for sprinkler pivots.
  • Switching from a diesel to electric irrigation motor.
  • Replacement of energy-inefficient equipment.

Agricultural producers may also use guaranteed loan funds to install energy efficient equipment and systems for agricultural production or processing.

Build Energy-efficient Facilities

Secure a USDA REAP loan for systems that will enable your business to run on renewable energy powered by the sun, wind, waves, biomass, hydrogen or geothermal sources.

Upgrade to Energy-efficient Equipment/Systems

Retrofit your current facilities and operations with energy-efficient heating, cooling and ventilation systems, as well as lighting, fans, insulation and automated controls.

Produce on-farm/ranch renewable energy

Produce energy on your own land by installing solar panels, smart electricity meters, wind turbines, small hydroelectric systems and more.