Rural Water Assistance Fund (RWAF) Program

RWAF Program Information Sheet

1. What can the program do for you?

The Rural Water Assistance Fund (RWAF) is designed to assist small rural utilities to obtain low-cost financing for water and wastewater projects. The RWAF offers tax-exempt equivalent interest rate loans with long-term finance options.

2. Who can borrow?

Eligible borrowers are defined as "rural political subdivisions." They include nonprofit water supply corporations, districts, municipalities serving a population of 10,000 or less, and counties in which no urban area has a population exceeding 50,000. Rural political subdivisions may also partner with a federal agency, a state agency, or another rural political subdivision to apply for funding.

3. What types of projects can I use the loan funding for?

Financial assistance for water related projects may include planning, design and construction for:

  • improvements or construction of wells
  • wholesale or retail water service lines
  • desalination facilities
  • purchase of well fields and rights to produce groundwater
  • water projects included in the State Water Plan or a Regional Water Plan
  • pumping facilities
  • storage reservoirs and tanks
  • water treatment plants
  • acquisition of groundwater and surface water rights

Financial assistance for water quality enhancements may include planning, design and construction for:

  • wastewater collection and treatment
  • onsite or wetland wastewater treatment facilities
  • improvements or construction of sewer treatment plants
  • collection systems
  • nonpoint source pollution abatement

The fund may also be used to enable a rural utility to obtain water or wastewater service supplied by a larger utility or to finance the consolidation or regionalization of a neighboring utility.

4. Are loans and grants offered?

Due to funding limitations, only loans are offered through the RWAF. The lending rates are intended to provide reasonable rates for TWDB customers while covering the TWDB's cost of funds and risk exposure. Other advantages of the program are a maximum 40-year maturity on loans (consistent with the useful life of the project) and quick turnaround time on the processing of loan applications. In addition, nonprofit water supply corporations are exempt from paying sales tax incurred on any project financed by the program.

Current interest rates are available.

5. What project components can I receive funding to complete?

The pre-design funding option is available for most water supply, treatment, and quality enhancement projects and allows an eligible applicant to receive a loan commitment on the basis of preliminary engineering, environmental, economic, and social information. Funds for completing detailed planning, including environmental studies, are provided at closing, whereas funds for design, preparation of final plans and specifications, and construction are placed in escrow until needed.

If the pre-design funding option is not used, applicants seeking only construction phase funding must develop plans and specifications and have them approved by TWDB staff, obtain all necessary permits, and open bids prior to closing the loan.

6. How much funding is available?

The TWDB has limited Alternative Minimum Tax proceeds available for RWAF and has the ability to sell taxable bonds to obtain proceeds which can be used for loans.

7. When can I apply?

The RWAF program does not have any opening or closing deadlines, so the first step in the application process is to schedule a pre-application conference with your Regional Project Implementation Team to discuss the proposed project and receive any needed guidance and assistance. Requesting a pre-application conference does not in any way obligate an applicant to continue the process.

8. What are the Conditions of Financial Assistance?

For detailed information of the Conditions of Financial Assistance

Special Requirements

  • Preliminary engineering feasibility, preliminary environmental review, water conservation plans and resolution of financial conditions are required prior to loan closing
  • Upon Board commitment, a letter is provided detailing all special conditions. General closing conditions are in Board rules 31 Texas Administrative Code 384.41-.43
  • Entities, such as water supply corporations, or projects ineligible for tax-exempt funds may be funded with taxable or Alternative Minimum Tax (AMT) proceeds and must meet any applicable U.S. Tax Code requirements
  • Water supply projects must be consistent with the current TWDB State Water Plan
  • Entities receiving assistance greater than $500,000 must adopt a water conservation and drought contingency plan
  • U.S. Iron and Steel Manufactured Goods requirements
  • Review of legislative requirements regarding water loss threshold limits

Loan Process

Application Process

Where Can I Get More Information?

In order to provide you with a single point of contact at the Texas Water Development Board (TWDB), our project implementation staff is organized into six regional project implementation teams. Each team is led by a manager that serves as the primary point of contact for both our existing and future customers. For assistance with the application or any questions related to your project, please contact your Regional Project Implementation Team.

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