---
kind: "section"
citation: "7 C.F.R. § 1780.10"
title: "7"
number: "1780.10"
heading: "Limitations."
url: "https://uscodex.org/cfr/7/1780.10"
---

# §1780.10. Limitations.

- (a) Loan and grant funds may not be used to finance:
  - (1) Facilities which are not modest in size, design, and cost;
  - (2) Loan or grant finder's fees;
  - (3) The construction of any new combined storm and sanitary sewer facilities;
  - (4) Any portion of the cost of a facility which does not serve a rural area;
  - (5) That portion of project costs normally provided by a business or industrial user, such as wastewater pretreatment, etc.;
  - (6) Rental for the use of equipment or machinery owned by the applicant;
  - (7) For other purposes not directly related to operating and maintenance of the facility being installed or improved; and
  - (8) A judgment which would disqualify an applicant for a loan or grant as provided for in [§ 1780.7(g)](/cfr/7/1780.7.md?p=g).
- (b) Grant funds may not be used to:
  - (1) Reduce EDU costs to a level less than similar system cost;
  - (2) Pay any costs of a project when the median household income of the service area is more than 100 percent of the nonmetropolitan median household income of the State;
  - (3) Pay project costs when other loan funding for the project is not at reasonable rates and terms; and
  - (4) Pay project costs when other funding is a guaranteed loan obtained in accordance with [7 CFR part 1779](/cfr/7/part1779.md) of this title.
- (c) Grants may not be made in excess of the following percentages of the RUS eligible project development costs. Facilities previously installed will not be considered in determining the development costs.
  - (1) 75 percent when the median household income of the service area is below the higher of the poverty line or 80% of the state nonmetropolitan median income and the project is necessary to alleviate a health or sanitary problem.
  - (2) 45 percent when the median household income of the service area exceeds the 80 percent requirements described in [paragraph (c)(1)](#c-1) of this section but is not more than 100 percent of the statewide nonmetropolitan median household income.
  - (3) Applicants are advised that the percentages contained in paragraphs [(c)(1)](#c-1) and [(c)(2)](#c-2) of this section are maximum amounts and may be further limited due to availability of funds or the grant determination procedures contained in [§ 1780.35 (b)](/cfr/7/1780.35.md?p=b).

## Notes

### Amendments

[62 FR 33478, June 19, 1997, as amended at 64 FR 29946, June 4, 1999; 66 FR 23151, May 8, 2001]

### Authority

Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

### Source

Source: 62 FR 33478, June 19, 1997, unless otherwise noted.

### Amendments

[62 FR 33478, June 19, 1997, as amended at 64 FR 29946, June 4, 1999; 66 FR 23151, May 8, 2001]