What Was the Electric Home and Farm Authority?

The Electric Home and Farm Authority was a New Deal federal corporation, created by Executive Order 6514 on December 19, 1933, that helped rural and moderate-income families buy electric appliances on affordable installment plans.¹ It operated for nearly nine years before being terminated on October 31, 1942, once other New Deal programs and the wartime economy had overtaken its role.

The Problem It Was Built to Solve

By 1930, about nine in ten urban and nonfarm rural homes had electricity, but only about one in ten farms did.² Private utilities saw little reason to run lines across sparsely populated countryside, and the households who most needed power were the least able to afford the appliances that would justify service. A Frigidaire refrigerator cost $468 in 1926, well beyond what most farm families could pay in cash.

The EHFA worked on the demand side of that gap. It did not build power lines; that job later fell to the Rural Electrification Administration. Instead, it financed the appliances themselves, on terms designed to generate enough household demand that utilities would find it worthwhile to extend service.

How the Financing Worked

The agency operated much like a private sales finance company, but with federal backing. It partnered with manufacturers, local utilities, and retailers so a customer could put down a small amount and pay the balance over as long as five years.

The time payment charge was 5 percent per year, calculated on the original unpaid balance.³ Commercial installment lenders of the 1930s typically charged substantially more, which is why the EHFA’s terms moved appliances into homes that otherwise could not have afforded them.

One eligibility rule shaped where the program ran: financing was available only where local utilities offered low electricity rates and agreed to cooperate. Financing a refrigerator made little sense if the household could not afford to plug it in.

What It Financed

The product list started narrow in 1934, covering refrigerators, ranges, and water heaters. It grew steadily. By the late 1930s, eligible items included washing machines, clothes ironers, vacuum cleaners, radios, water pumps, and farm equipment such as milking machines, feed grinders, cream separators, and farm motors.³ By June 1938, almost any major electric household or farm appliance could be bought on time through the EHFA.

The agency also pushed manufacturers to build simpler, cheaper models aimed at moderate-income buyers, an approach sometimes described as a “Model T” of appliances. Competition for EHFA-eligible contracts helped bring retail prices down across the industry.

How Much It Financed

From June 1934 through June 1938, the EHFA purchased 74,095 installment contracts with a face value of about $11.6 million, covering 85,137 appliances. In fiscal 1938–39 alone it took on another 57,176 contracts worth roughly $8.4 million, pushing the running total past 131,000 contracts by mid-1939.⁴ Operations continued through October 1942, so lifetime totals ran higher, though detailed figures for the final years are harder to pin down.

A 1936 survey along new rural power lines in Colbert and Lauderdale Counties, Alabama, found 89 percent of homes had electric irons, 69 percent had radios, 61 percent had refrigerators, 36 percent had water pumps, and 16 percent had washing machines.⁵ Those adoption rates came in communities that had been dark only months before.

How It Was Set Up, Funded, and Shut Down

The EHFA was incorporated as a Delaware corporation on January 17, 1934, and initially assigned to the National Recovery Administration. After the Supreme Court struck down the National Industrial Recovery Act in May 1935, the agency was transferred briefly to the TVA, reincorporated under District of Columbia law on August 1, 1935, and made an independent federal agency by Executive Order 7139 on August 12, 1935.⁶ Independence let it operate well beyond the Tennessee Valley and coordinate with the new Rural Electrification Administration.

Funding came primarily from the Reconstruction Finance Corporation, which supplied loan capital for the installment program. The U.S. Treasury subscribed to the agency’s capital stock. In 1939, a government reorganization plan folded the EHFA into the Federal Loan Agency; in early 1942 it moved briefly to the Department of Commerce.⁶

Executive Order 9256, signed October 13, 1942, terminated the EHFA at the close of business on October 31, 1942. By then, wartime production had ended the Depression, appliance manufacturing had been redirected toward the war effort, and the Rural Electrification Administration (created in 1935, made permanent by the Rural Electrification Act of 1936) was carrying the broader mission of extending power lines into rural areas. All EHFA assets, funds, records, contracts, and property were transferred to the Reconstruction Finance Corporation for liquidation, with any remaining balance paid into the Treasury’s general fund.⁷

What Replaced It

The mission did not disappear when the corporation did. The Rural Electrification Act of 1936 authorized loans to build power lines and generating plants in underserved areas, and that authority continues today through the USDA’s Rural Utilities Service.⁸ On the efficiency and renewables side, the USDA’s Rural Energy for America Program provides grants and guaranteed loans to agricultural producers and rural small businesses, with anticipated funding of roughly $200 million per federal fiscal year through 2027.⁹ The technology and scale have changed; the underlying premise that rural communities need targeted federal support for energy access traces back to the EHFA.

1
The American Presidency Project. Executive Order 6514 – Authorizing the Formation of a Corporation to be Known as Electric Home and Farm Authority, Inc.
2
Federal Reserve Bank of Richmond. Electrifying Rural America
3
National Bureau of Economic Research. Characteristics of Contracts and Purchasers
4
National Bureau of Economic Research. Organization and Operations of the Electric Home and Farm Authority
5
Tennessee Valley Authority. Public Power Transforms Real Lives
6
National Archives. Records of the Reconstruction Finance Corporation (Record Group 234) – Section: Records of the Electric Home and Farm Authority (EHFA)
7
The American Presidency Project. Executive Order 9256 – Termination and Liquidation of the Electric Home and Farm Authority
8
Office of the Law Revision Counsel. 7 USC 6942 – Rural Utilities Service
9
Federal Register. Notice of Funding Opportunity for the Rural Energy for America Program for Fiscal Years 2025, 2026, and 2027