To finance its growing capital needs, the rural electric program began in the mid-1960s to seek alternative funding sources to supplement government lending. In 1967 the National Rural Electric Cooperative Association (NRECA) proposed the creation of a not-for-profit financing institution that would be cooperatively owned by rural electric systems themselves. NRECA's members approved this plan and on April 10, 1969, CFC was incorporated. 

Today, CFC offers full service financing products and services to its owners and maintains an ongoing effort to ensure that its lending and investment programs, and related financing products, are cost-effective. As a cooperatively owned finance organization, CFC returns to its borrowers any surplus margins exceeding its cost of operations in the form of patronage capital. 

CFC meets its owners' financing needs through a variety of loan, investment, member service, and specialized financing programs. By maintaining high credit standards and credit ratings, CFC provides its owners with competitively priced financing through its role as a conduit to the private capital markets. CFC raises funds primarily in two ways: through equity investments made by its cooperative utility owners and by raising funds in the capital markets.

CFC is guided by a 22-member grassroots board of directors representing 11 geographically defined districts in 46 states and the national trade association, NRECA. Each district is represented on the board by two directors. The board members, who represent both cooperative utility management and elected directors, set policies, establish programs, and develop strategies for CFC. 

CFC operates from its corporate headquarters in Herndon, Virginia, with a staff of 150 employees and 12 regional representatives located throughout the U.S. CFC's staff has extensive rural utility finance and management experience. CFC operates several affiliated organizations-Rural Telephone Finance Cooperative (RTFC) and National Cooperative Services Corporation (NCSC)--to help meet the increasingly varied needs of rural America.