The Cup Loan Program Explained (Verified Info)

Written by Charles Thuo
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Accessing funds for public facility projects in rural areas can at times be tough. However, that should not be a problem anymore. The US government has a program called the Cup Loan Program that is designed specifically for this.

But what exactly is a Cup Loan, and how does it work? In this comprehensive guide, we’ll demystify Cup Loans. Discover the ins and outs of Cup Loans, their benefits, potential risks, and how they can fit into your financial toolkit.

What is the Cup Loan Program?

The Cup Loan Program is a financial initiative that refers to the Community Facilities Direct Loan & Grant Program offered by the United States Department of Agriculture (USDA). It is specifically designed to support public facilities in rural areas. It stands as a beacon of hope, offering low-interest loans to public facilities to facilitate their construction, renovation, or improvements.

One of the program’s notable aspects is its widespread availability, as it extends its reach to nearly every state in the US This accessibility ensures that rural communities across the nation can benefit from this invaluable resource. Public facilities such as schools, libraries, hospitals, fire stations, and community centers have been the primary beneficiaries, each receiving the opportunity to secure the financial assistance needed to enhance their services and infrastructure.

The Cup Loan Program operates as a lifeline for rural public facilities, offering an avenue to address critical needs that might otherwise be financially unattainable. With its steadfast commitment to rural development, this program stands as a testament to the USDA’s dedication to bettering the lives of communities in need.

In the sections that follow, we will delve deeper into the workings of the Cup Loan Program, its eligibility criteria, the application process, benefits, and much more, ensuring a comprehensive understanding of this invaluable resource.

How Does the Cup Loan Program Work?

The Cup Loan Program operates as a financial catalyst for public facilities in rural areas, offering them an avenue for development and enhancement. Its mechanism is fairly straightforward and designed to be accessible to eligible facilities. 

At its core, the program provides low-interest loans, and here’s how it works:

Low-Interest Loans

The heart of the Cup Loan Program is the provision of low-interest loans to public facilities. These loans offer interest rates that are notably lower than what is typically available through commercial lenders or bond markets. This financial advantage is a significant draw for public facilities looking to improve their infrastructure or services while managing their budgets effectively.

Diverse Project Uses

Public facilities that secure loans from the Cup Loan Program can utilize these funds for various purposes. The program caters to construction, renovation, and improvement projects. Public facilities such as schools, libraries, hospitals, fire stations, and community centers can leverage the funds to upgrade their facilities or services. 

For example, schools may enhance their classrooms or science labs, libraries can expand their collections and technology offerings, and hospitals can acquire new medical equipment.

Partnership with USDA’s Rural Development Agency

The Cup Loan Program is administered by the United States Department of Agriculture’s (USDA) Rural Development Agency. This partnership ensures that eligible public facilities receive guidance and support throughout the loan application process. 

Local partners, such as municipalities, counties, districts, and non-profit organizations, collaborate with the USDA to deliver these loans and provide technical assistance, ensuring that the projects align with USDA’s standards.

This streamlined mechanism empowers public facilities to embark on construction and renovation projects that otherwise might have been financially challenging. By accessing these low-interest loans, they can address infrastructure needs, offer enhanced services, and contribute to the development of rural communities.

The Cup Loan Program’s ability to offer low-interest loans with flexible terms is a testament to its role in rural development. This financial support enables public facilities to make significant improvements in their services, positively impacting the quality of life in rural areas.

Cup Loan Program Details

The Cup Loan Program’s success in supporting rural development lies in the fine print of its essential details. 

These details offer a comprehensive view of how the program operates and its advantages for public facilities in rural areas:

Loan Definition

The Cup Loan Program is versatile in its scope, accommodating a wide range of public facility projects. Eligible purposes for these loans include:

  • Construction of new facilities.
  • Renovation or improvement of existing facilities.
  • Acquisition of land or equipment for facilities.
  • Refinancing existing debt related to public facilities.

This flexibility enables public facilities to tackle diverse projects that enhance their services, infrastructure, and capacity to serve the community.

Maximum Cup Loan Amount

The Cup Loan Program sets a cap on the maximum loan amount, which can reach up to $10 million. 

However, the specific loan amount awarded to a public facility depends on several factors, including the size and scope of the project. Therefore, while $10 million is the ceiling, the actual loan amount may vary based on individual project requirements.

Cup Loan Interest Rates and Repayment Terms

One of the standout features of the Cup Loan Program is the low-interest rates it offers. These rates are generally more favorable than those available through commercial loans, making the financial burden lighter for public facilities. 

The repayment terms for Cup Loans can extend up to 30 years, allowing borrowers to make manageable monthly payments. This extended duration of repayment makes it feasible for public facilities with limited financial resources to undertake essential projects.

No Prepayment Penalties

A distinct advantage of the Cup Loan Program is that it does not impose prepayment penalties. Borrowers can choose to pay off their loans earlier than the agreed-upon term without incurring any additional fees or penalties. 

This flexibility empowers public facilities to manage their finances more efficiently and save on interest costs.

Who Is Eligible for the Cup Loan Program?

Eligibility for the Cup Loan Program is a critical aspect that determines which public facilities and organizations can benefit from its support. 

The Cup Loan Program’s eligibility criteria are designed to ensure that it provides support where it’s needed most—in rural areas with a focus on small communities. By targeting local governments, non-profit organizations, and areas with lower median incomes, the program aims to enhance the quality of life and economic development in these regions. This inclusivity reflects the program’s commitment to fostering growth in rural America.

Here, we’ll explore the specific criteria used to define the eligibility:

Location in a Rural Area

To qualify for the Cup Loan Program, the public facility or organization must be located in a rural area. The program’s definition of a rural area typically involves a population of fewer than 20,000 people as depicted in the overview of the Community Facilities Direct Loan & Grant Program page of the Rural Development U.S. DEPARTMENT OF AGRICULTURE website.

This criterion ensures that the program’s benefits are directed toward smaller towns and rural communities where the need for financial assistance may be more significant.

Ownership by Local Governments or Non-Profit Organizations

Eligible borrowers under the Cup Loan Program include public facilities owned and operated by local governments or non-profit organizations. These entities must have the legal authority and responsibility for providing public services in the community. 

This criterion ensures that the program supports organizations committed to serving the public’s needs.

Income Requirements

The Cup Loan Program extends its assistance to public facilities that serve areas with a median household income below 80% of the state’s non-metropolitan median income. This income requirement ensures that the program targets areas with financial constraints and supports communities with lower income levels.

Examples of Public Facilities and Organizations Eligible for Cup Loans

The Cup Loan Program opens the door to various public facilities and organizations committed to improving their communities. Some examples of eligible entities include:

  • School districts
  • Library districts
  • Hospital districts
  • Fire protection districts
  • Water and sewer districts
  • Recreation districts
  • Community development corporations
  • Housing authorities
  • Healthcare centers
  • Senior centers

These examples highlight the program’s inclusivity, allowing a diverse range of public facilities and organizations to apply for financial assistance.

How to Apply for the Cup Loan Program

Applying for the Cup Loan Program involves a structured process designed to ensure that eligible public facilities and organizations can access the financial support they need. 

Here, we’ll outline the steps involved in the application process:

#Step1 Initial Contact with Local USDA Rural Development Office

The first step in applying for the Cup Loan Program is to initiate contact with your local USDA Rural Development office. These offices are strategically located across various regions and are equipped to provide guidance and support throughout the application process. 

You can check where your local office is located on the USDA Rural Development official website.

A loan specialist from the local office will assist you in determining your eligibility for the program and offer valuable insights into how to proceed.

#Step2 Completion of Application Forms

Once you’ve established contact with your local USDA Rural Development office and confirmed your eligibility, the next step is to complete the required application forms. These forms are designed to collect essential information about your project and your organization.

You can access these forms through the official website of USDA Rural Development under the Community Facilities Direct Loan & Grant Program.

#Step3 Submission of Supporting Documents

The completeness of your application plays a vital role in the approval process. Alongside the application forms, you’ll need to submit a set of supporting documents. These documents serve to verify your eligibility and demonstrate the feasibility of your project. Some of the essential documents may include:

  • Legal documents, such as articles of incorporation, bylaws, and resolutions.
  • Financial statements, including income statements, balance sheets, and cash flow statements.
  • A feasibility study or business plan outlining the viability and sustainability of your project.
  • An environmental assessment or environmental impact statement showcasing compliance with USDA’s environmental policies.
  • An engineering report or architectural design confirming adherence to USDA’s technical standards.

Role of USDA Rural Development Office in Reviewing Cup Loan Applications

Your submitted application and supporting documents undergo a thorough review process by the USDA Rural Development office. The agency evaluates your eligibility and the feasibility of your project. 

They also assess your creditworthiness and the potential impact of the proposed project on the rural community. This review process ensures that the program’s financial assistance is directed toward projects that align with its objectives and criteria.

What Are the Pros and Cons of the Cup Loan?

When considering a Cup Loan, it’s essential to weigh the pros and cons to determine if it’s the right choice for your financial situation. Here, we will discuss the benefits and drawbacks of this lending program and address some common concerns.


  • Low-interest rates: Cup Loans offer competitive interest rates, which can help save you money over the life of the loan.
  • Flexible repayment terms: These loans provide options for longer repayment schedules, allowing you to better manage your monthly budget.
  • Fast approval: The approval process is efficient, helping you cover unexpected expenses or jump on time-sensitive growth opportunities.
  • Convenience: Cup Loans offer a level of convenience, making it easier for you to access funds when needed.


While the Cup Loan has many benefits, there are also some potential drawbacks to consider:

  • Limited eligibility: The Cup Loan Program is designed to only assist those doing development projects in public facilities in rural areas in the USA. Urban development projects can not access the loan.
  • Only for public facility projects: The loan cannot be taken to fund private projects.
  • The loan application process is not fully digitized: At the start of the application process, you are required to contact your USDA Rula office, This can be challenging especially if the office is far away, meaning you would be required to use more money for transport purposes to the offices


What’s the difference between the Cup Loan Program and the Community Facilities Direct Loan Program?

The Cup Loan Program operates as a loan guarantee program, where borrowers secure loans from lenders with USDA guarantees. In contrast, the Community Facilities Direct Loan Program provides loans directly from the USDA.

How long does it take to get approved?

Approval times vary based on factors like project complexity and fund availability, ranging from a few months to over a year.

What are examples of funded projects?

Funded projects include new schools, renovated libraries, modernized hospitals, upgraded fire stations, and enhanced community centers.

How much can one borrow?

Borrowing amounts are determined based on various factors like project cost, repayment ability, and available funds, with no set maximum loan amount.

Are Cup Loans legit?

Yes, Cup Loans are legit loans offered by the United States Department of Agriculture (USDA).


If you run a public facility in the rural USA and you are wondering how to fund development projects in the facility, then this guide is for you. It not only helps you understand where you access low-interest and flexible loans but also guides you through the eligibility criteria and the application process of the USDA Cup Loans among other details.

We trust the guide helps you in applying for the funding you require to empower your community and make lives better.

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Charles Thuo

Charles Thuo is a specialized writer in cryptocurrency, blockchain, and personal finance. With an engineering degree from Dedan Kimathi University of Technology, he translates complex tech and financial concepts into accessible insights. Featured on notable platforms like, Charles is renowned for his in-depth research and objective, comprehensive reporting. When he's not exploring the digital currency landscape, he advocates for a healthy lifestyle through fitness and enjoys the tranquility of mountain hikes.

Disclaimer: The opinions, analyses, and information expressed by this author are for informational purposes only and do not constitute financial, investment, or other professional advice. Always conduct thorough research and consult with a professional before making any investment decisions.

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