DWSRF Program Overview
The Drinking Water State Revolving Fund (DWSRF) program provides subsidized low-cost financing to municipal and privately-owned public water systems for capital improvements that improve public health protection and facilitate compliance with the Safe Drinking Water Act. Below are drinking water funding opportunities:
- Planning Loans: This loan program effectively acts as a bridge loan between all aspects of preliminary engineering and construction. Included in the step of project development is source exploration, feasibility studies for water system acquisition, income surveys, environmental reporting, structural evaluations, preliminary engineering report, and final design, to name a few. Planning loans are 0% interest with no interest accruing or payments expected through construction. Municipalities and non-profit public community water systems are eligible for this program.
- Source Protection Loans: This loan program can be used to purchase land or conservation easements to protect public water sources and ensure compliance with state and federal drinking water standards. Source(s) must have a hydrogeologically-delineated source protection area, an approved Source Protection Plan prior to loan award and are limited to public community water systems (PCWS). The water system must demonstrate how the project will directly promote public health protection or compliance with national drinking water regulations. Loan rate and terms are 20 years, 1% interest plus 2% administrative fee (for a combined 3% interest).
- Construction Loans: This loan program provides funding for a variety of water system improvements to public community water systems and non-profit non-community water systems (both NTNC and TNC). Construction loans are awarded through an annual priority ranking system, with the strongest emphasis on projects that address the most significant health problems and facilitate compliance with the Safe Drinking Water Act; readiness-to-proceed criteria is also heavily weighed. Loan rate and terms are up to 30 years, 1% interest plus 2% administrative fee (for a combined 3% interest). Loan terms may be up to 40 years and down to 0% interest with principal forgiveness up to 50% of the final loan value for certain disadvantaged applicants. Loan terms are limited by the weighed average expected useful life of funded assets.
The Construction loan program is funded through an U.S. Environmental Protection Agency (USEPA) capitalization grant and a State match appropriated annually through the Capital Bill. The DWSRF, on an annual basis, develops an Intended Use Plan (IUP) which outlines how the program intends to spend the money, both to support special water system projects and staffing, and infrastructure improvement projects. The IUP receives public input at an annual public hearing and is approved by the EPA. One of the primary components of the IUP is the state-wide construction priority list; water systems must apply annually for placement on the list.