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Drinking Water State Revolving Fund

DWSRF Program Overview

The Drinking Water State Revolving Fund (DWSRF) program provides low-cost financing to public water systems for planning and for capital improvements that improve public health protection and facilitate compliance with the Safe Drinking Water Act. Loans can be provided to eligible regulated community water systems (municipal or private) and to eligible non-profit non-community water systems. Eligible borrowers, projects, and costs are defined in US EPA's DWSRF eligibility handbook and in VT DWSRF Guidance Document 8.

For information that changes with our annual funding cycle including deadlines for construction projects, see the current Intended Use Plan (IUP).  For additional guidance and loan term information, see the Guidance Document page. Find SRF loan applications and forms here, and learn how the loan application process works here.

Loan Terms: Borrowers should refer to Guidance 10 for current and compete loan term and fee information, but summaries for each loan type are listed below.  

Loan Types:

  • Planning Loans: This is a general term for loans for Step 1 (planning and preliminary engineering) and Step 2 (final design) but also includes source exploration, feasibility studies for water system acquisition, income surveys, environmental reporting, structural evaluations, and similar eligible projects. 
    • Planning loan term summary:
      • Repayment: begins 5 years after expected loan approval date.
      • Loan Term: 5 to 15 years
      • Interest Rate: 0%
      • Administrative fee: $0
  • Construction Loans: Step 3 construction loans are competitive, and are awarded through a two step process.
    1. Submission of a Priority List Application that results in a preliminary eligibility determination and a score, with points awarded for addressing the most significant deficiencies to facilitate compliance with the Safe Drinking Water Act. There are also requirements and points awarded for readiness to proceed within the near future.
    2. Submission of a loan application for an eligible construction project to ANR Online.
    • Construction loan term summary:
      • Repayment: begins one year after project completion.
      • Loan Term: Up to 30 years; up to 40 years for disadvantaged communities.
      • Interest Rate: 0% interest
      • Administrative fee: 2.00 - 2.75%; as low as 0% for disadvantaged communities.
  • Service Line Inventory Loans: Community and NTNC water systems are required under the Lead and Copper Rule Revisions to submit a service line inventory (SLI) by October 2024. Specific requirements for the inventory format and its development are set by DWGPD. All Vermont water systems with over 1,000 population or 250 service connections were added to the service line inventory priority list in the FY22 Intended Use Plan and are eligible to apply for this loan type. See the current IUP for availability of loan forgiveness for specific communities.
    • Service Line Inventory loan term summary:
      • Repayment: begins 5 years after expected loan approval date and split into 5 annual payments. If the SLI leads to a subsequent DWSRF construction loan, the SLI loan may be rolled into that construction loan.
      • Loan Term: 5 years
      • Interest Rate: 0%
      • Administrative fee: $0
  • Asset Management Planning Loans: A municipality may receive up to $50,000 in planning loan forgiveness to develop and implement a DEC-approved asset management plan that meets the guidelines in Guidance 26. DWGPD’s Asset Management Programs page has more information about developing an asset management plan.
    • Asset Management Plan loan term summary:
      • Repayment: begins 5 years after original loan agreement and split into 5 annual payments.
      • Loan Term: 5 years
      • Interest Rate: 0%
      • Administrative fee: $0
  • 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. See the current IUP for availability of loan principal forgiveness and the DWGPD Source Water Protection site for Source Protection Plan details.
    • Source protection loan term summary:
      • Repayment: begins 1 year after loan agreement execution.
      • Loan Term: annual payments over 20 years.
      • Interest Rate: 3%
      • Administrative fee: 0%

The 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.

Meet the DWSRF Project Development Team:

Amy Galford, DWSRF staff
Construction and Planning Loans, 802-585-4904

Meagan Koss, DWSRF Project Developer:
Planning, Service Line Inventory, Asset Management Planning, Source Protection Loans, 802-249-2413