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USDA REDLG funding cut could limit Kemper County projects, board told
Summary
Legal counsel Kacey Bailey told the Kemper County Utility District board that USDA indicated a temporary reduction in RED Loan availability under a continuing resolution: only $10 million is available for Q1 and the FY2025 maximum RED Loan was revised from $2 million to $1 million, meaning projects larger than $1 million will need scope revisions or alternative financing.
At the Dec. 18, 2024 meeting, legal counsel Kacey Bailey updated the Kemper County Utility District board on the status of the USDA Rural Economic Development Loan and Grant (REDLG) program and how recent federal funding constraints could affect projects.
Bailey said information from Jason Rushing at the U.S. Department of Agriculture indicates that, because Congress passed a continuing resolution, only $10 million in RED Loan funds is available in the first quarter and demand far exceeds that amount. As a result, USDA senior leadership revised the FY2025 maximum RED Loan amount from $2 million to $1 million to spread limited funding across a broader set of applicants.
The district was told a Notice published Nov. 21, 2024, announced the revision for Q2, Q3 and Q4 as well. Bailey said that for any RED Loan request above $1 million in Q2–Q4, the intermediary should consult with the applicant to revise project scope; applicants will not be required to resubmit a new application but USDA will not be able to fund the loan and grant this quarter.
The board received the update as part of routine business; no formal motion or funding decision tied to REDLG was made at the meeting.
