Rural Electrification Credit Assistance Improvement Act of 1986

Rural Electrification Credit Assistance Improvement Act of 1986 - Amends the Rural Electrification Act of 1936 to change the interest rate on insured loans from five percent to the cost of Treasury borrowing as determined by the Secretary of the Treasury.

Requires an insured loan borrower to demonstrate that he or she: (1) is unable to obtain credit elsewhere at reasonable rates; and (2) has a plan for obtaining sufficient future equity. Provides for a loan fee of not more than one percent.

Repeals: (1) the prohibition on guaranteed loan fees; (2) the interest rate ceiling.

Requires a guaranteed loan borrower to demonstrate that he or she: (1) is unable to obtain credit elsewhere at reasonable rates; and (2) in the case of an electric power facility, has considered alternatives for meeting power requirements, including purchasing power from other sources. Provides for a loan fee not in excess of administrative expenses and probable losses arising from such assistance.

Authorizes a borrower to apply to the Federal Financing Bank for a guaranteed loan if such assistance is unavailable through private institutions.

Requires (currently the Act authorizes) the Administrator of the Rural Electrification Administration to request an insured or guaranteed loan applicant to accept a partial loan from another source (at reasonable rates) concurrently with such Administration assistance.