Drinking Water State Revolving Fund (DWSRF) Loan Program
1. What can the program do for you?
The Drinking Water State Revolving Fund, authorized by the Safe Drinking Water Act, provides low-cost financial assistance for planning, acquisition, design, and construction of water infrastructure.
2. Who can borrow?
Eligible applicants for the DWSRF program include publicly and privately-owned community water systems, including nonprofit water supply corporations and nonprofit, non-community public water systems.
3. What types of projects can I use the loan funding for?
Financial assistance from the DWSRF can be utilized for:
- Correcting water system deficiencies including water quality, capacity, pressure, and water loss
- Upgrading or replacing water systems
- Providing new or existing service to other water systems through consolidation projects
- Purchasing capacity in water systems
- Purchasing water systems
- Implementing green projects (pursuant to EPA guidance)
- Implementing source water protection projects
4. Are loans or grants offered?
Below market interest rate loans, 0% loans and principal forgiveness (similar to grants) are offered in the State Revolving Fund (SRF) Intended Use Plan (IUP).
The interest rate on loans will be a percentage reduction from the Thomson Reuters Municipal Market Data (MMD) rate adjusted for yield to maturity that is applicable to the entity's rating, with non-rated entities using the Baa rate, as follows:
(a) Equivalency projects: 35% reduction
(b) Non-Equivalency projects: 30% reduction
0% loans are available on a limited basis to eligible small/rural disadvantaged communities, urgent need projects and for preparation of Asset Management Plans.
Principal forgiveness is available on a limited basis to eligible applicants.
- Disadvantaged communities: The amount of principal forgiveness for a regular disadvantaged project (up to 70%) is dependent on the annual median household income (AMHI) and household cost factor (HCF) for the project area.
- Small/rural disadvantaged communities: Entities qualified as a disadvantaged community and that additionally meet the definition of either a small community (serve a population of 10,000 or fewer) or a rural project (see definition in the IUP) are eligible for up to 100% principal forgiveness ($1,000,000 maximum).
- Very small systems: Projects that serve a population of 1,000 or fewer are eligible for up to 100% principal forgiveness ($400,000 maximum).
- Green projects: Entities may receive subsidized green funding (up to 15% forgiveness) if their project has eligible components that total 30% of the project's total cost.
- Urgent need projects: If a project is determined to be of urgent need, the applicant may qualify for 100% principal forgiveness ($500,000 maximum unless a disadvantaged community, then up to $800,000 maximum). The project must not be for replacement of facilities that have failed because they exceeded their useful life or failed due to lack of adequate maintenance.
A useful table under Section V of the IUP called “Allocations and Terms Available Under Each Funding Option” lists the principal forgiveness options and the loan options.
5. What project components can I receive funding to complete?
The DWSRF program provides financial assistance for planning, acquisition, design, and construction of your water system project.
6. How much funding is available?
Whether you are seeking financial assistance for smaller projects to large-scale capital improvement projects, the DWSRF program can assist with your financing needs. For State Fiscal Year 2024, at least $435 Million is available under the DWSRF program for all financing options including $95 Million in principal forgiveness. This funding consists of the annual appropriations from the DWSRF capitalization grant funds and the supplemental appropriations from the Infrastructure Investment and Jobs Act of 2021 (IIJA).
For current detailed information regarding funds available, please see the DWSRF Intended Use Plan located on the upper right side of this webpage.
7. When can I apply for SRF financial assistance?
Solicitation for the SRF Programs opens in December of every year and closes in March of the following year. Entities must submit a completed Project Information Form (PIF) by the deadline to be invited to apply for funding under the initial IUP. Join our mailing list so you are notified of when solicitation opens and of all important deadlines. You may also submit a PIF for funding at any time. However, your project will not be included in the initial project priority list if it is not submitted by the solicitation deadline.
Financial assistance through the DWSRF program requires compliance with applicable rules, policies, and statutes including:
- Submittal of a Project Information Form (PIF) to the current Intended Use Plan
- 2.0% loan origination fee for SFY 2024 IUP projects
- National Environmental Policy Act-type environmental review.
- Projects must be consistent with the current TWDB State Water Plan
- Adoption of a Water Conservation and Drought Contingency Plan for all financial assistance greater than $500,000
- Application of Davis-Bacon wage rate requirements
- Compliance with EPA's American Iron and Steel Provisions
- Review of legislative requirements regarding water loss threshold limits
- For Equivalency Projects:
IUP and Loan Process
Where Can I Get More Information?
In order to provide you with a single point of contact at the 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 look up contact information for your Regional Team.