USDA's Billion-Dollar Loan Blunder: Affiliate Definition Gone Wrong
Published Date: 12/11/2025
Rule
Summary
The USDA fixed some mistakes in the OneRD Guaranteed Loan rules that affect businesses and communities using loans for things like water, energy, and rural projects. These corrections clear up confusing definitions and bring back important parts accidentally removed. The updated rules take effect December 11, 2025, helping keep loan programs running smoothly without changing the money involved.
Analyzed Economic Effects
4 provisions identified: 3 benefits, 1 costs, 0 mixed.
Limits on Agricultural Production Loan Share
For Business & Industry guaranteed loans, the agricultural production portion of any loan must not exceed 50 percent of the total loan or $5,000,000, whichever is less. The rule also lists exceptions where that limit does not apply, including commercial nurseries, forestry, mushroom growing, hydroponics, animal boarding/training, commercial fishing, and algae and aquaculture.
Affiliate Definition Clarified for Eligibility
The rule revises the definition of “affiliate” to mean a person or entity that is closely attached or connected to another. For program eligibility, the rule says the principles in 13 CFR 121.301(f) (and any successor regulation) are used to establish affiliation for guaranteed loan programs.
New 'Commercially Available' Definition Added
The rule adds a definition of “Commercially available.” A qualifying system must either (1) have at least one year of proven operating history and meet six listed criteria (including available spare parts, warranties valid in the United States, and available service), or (2) be certified by a recognized industry organization acceptable to the Agency.
REAP Renewable Energy Eligibility Restated
The rule clarifies that Renewable Energy System (REAP RES) projects must meet the criteria in Sec. 5001.102(a) through (c) and in paragraphs (a) through (e) of Sec. 5001.106, and borrowers must be eligible under Sec. 5001.126. If taxable bonds are used as debt instruments, the provisions of Sec. 5001.105(b)(19) must be met.
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Key Dates
Department and Agencies
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