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Drinking Water State Revolving Fund

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. Eligibility criteria for DWSRF funds are defined in US EPA's eligibility handbook and in VT DWSRF Guidance Document 8. The bullets below describe loans for different types and stages of work:

  • 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. Also see Step 1 and Step 2 loan links below.
  • Source Protection Loans: For a municipal community water system to purchase land or a conservation easement to protect an existing or future public water source and ensure compliance with state and federal drinking water standards. The water system must have a current approved Source Protection Plan for the source or have submitted the SPP update to DWGPD prior to loan application. 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, 3% interest. See the current IUP for availability of loan principal forgiveness. See the DWGPD Source Water Protection site for details.
  • 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. Typical loan rate and terms are up to 30 years, 0% interest plus 2.00 - 2.75% administrative fee, but certain disadvantaged applicants can receive a term of up to 40 years and fees as low as 0%. Loan terms are limited by the weighed average expected useful life of funded assets. Also see Step 3 loan link below.
  • Table of potential Drinking Water loan rate and terms.  

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.