Rural Water Assistance Fund (RWAF) Program

RWAF Program Information Sheet

1. Latest Program Updates

In 2023, the 88th Texas Legislature passed Senate Bill (SB) 28 and Senate Joint Resolution (SJR) 75 providing for the creation of the Texas Water Fund. In addition, SB 30 authorized a one-time, $1 billion supplemental appropriation of general revenue to the Texas Water Fund, contingent on enactment of SB 28 and approval of SJR 75 by voters. The supporting constitutional amendment (Proposition 6) was approved by voters on November 7, 2023.

2. What can the program do for you?

The fund is designed to assist small rural utilities to obtain low-cost financing for water and wastewater projects.

3. 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 (a more detailed definition will be provided in upcoming updated agency rules). Rural political subdivisions may also partner with a federal agency, a state agency, or another rural political subdivision to apply for funding.

4. What types of projects can I use the 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.

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

Previous options for funding included pre-design, for most water supply, treatment, and quality enhancement projects, allowing eligible applicants to receive a commitment on the basis of preliminary engineering, environmental, economic, and social information. Funds for completing detailed planning, including environmental studies, were provided at closing, whereas funds for design, preparation of final plans and specifications, and construction were placed in escrow until needed.

In instances where the pre-design funding option was not used, applicants seeking only construction phase funding were required to develop plans and specifications and have them approved by TWDB staff, obtain all necessary permits, and open bids prior to closing.

6. When can I apply?

The RWAF program is not currently accepting applications.

7. 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

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 seven 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.