---
kind: "section"
citation: "7 C.F.R. § 1738.57"
title: "7"
number: "1738.57"
heading: "Ineligible assistance purposes."
url: "https://uscodex.org/cfr/7/1738.57"
---

# §1738.57. Ineligible assistance purposes.


Assistance under this part must not be used for any of the following purposes:

- (a) To fund operating expenses of the Applicant except for eligible development costs under [§ 1738.56(e)](/cfr/7/1738.56.md?p=e).
- (b) To fund any costs associated with the project incurred prior to the date on which notification of a complete application is issued (see [§ 1738.203](/cfr/7/1738.203.md)), except for eligible development costs under [§ 1738.56(e)](/cfr/7/1738.56.md?p=e).
- (c) **To fund the acquisition of the stock of an affiliate.**
- (d) **To fund the purchase or acquisition of any facilities or equipment of an affiliate.**
- (e) To fund the purchase of CPE and the installation of associated inside wiring, unless the CPE will be owned by the Applicant throughout its economic life.
- (f) To fund the purchase or lease of any vehicle unless it is used primarily in construction or system improvements.
- (g) To fund the cost of systems or facilities that have not been designed and constructed in accordance with the Award contract and other applicable requirements.
- (h) To fund broadband facilities leased under the terms of an operating lease, a short-term lease, or more than 3 years of a capital/finance lease.
- (i) **To fund merger or consolidation of entities.**
- (j) To fund non-capitalized labor in accordance with [2 CFR part 200](/cfr/2/part200.md) except for eligible development costs under [§ 1738.56(e)](/cfr/7/1738.56.md?p=e).
- (k) To provide grant funding, a subsidized loan or payment assistance to cover the costs to refinance an outstanding loan.

## Notes

### Authority

Authority: 7 U.S.C. 901 et seq.

### Source

Source: 85 FR 14398, Mar. 12, 2020, unless otherwise noted.