; (ii) demonstrates the capacity to provide service to the applicable unserved or underserved rural community; (iii) demonstrates that— (I) the project funded by the direct loan is solely for the purpose of serving the applicable unserved or underserved rural community; and (II) the maximum financial benefit of the assistance under this paragraph will be conferred to that unserved or underserved rural community; and (iv) demonstrates that the applicable unserved or underserved rural community— (I) has willingly entered into a formal agreement with the applicant for service by the applicant; and (II) entered into the agreement described in subclause (I) with the understanding that the unserved or underserved rural community is eligible for water and waste disposal direct loans under paragraph (1) independently of any direct loan under this paragraph. . (c) Direct and guaranteed loans Section 343(a)(13)(B) of the Consolidated Farm and Rural Development Act ( 7 U.S.C. 1991(a)(13)(B) ) is amended— (1) by striking For the purpose and inserting the following: (i) Grants and direct loans For the purpose ; (2) in clause (i) (as so designated)— (A) by striking and guaranteed ; and (B) by striking (24) and inserting (27) ; and (3) by adding at the end the following: (ii) Guaranteed loans For the purpose of water and waste disposal guaranteed loans provided under paragraphs (1) and (24) of section 306(a), the terms rural and rural area mean a city, town, or unincorporated area that has a population of not more than 50,000 inhabitants. . 3. Funding of pending rural development loan and grant applications (a) In general The Secretary shall use funds made available under subsection (b) to provide funds for applications that are pending on the date of enactment of this Act in accordance with the terms and conditions of section 6029 of the Food, Conservation, and Energy Act of 2008 ( Public Law 110–246