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 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:
- water treatment facilities
- distribution systems
- upgrade or replace water infrastructure
- address standards from the Safe Drinking Water Act
- consolidation of systems
- purchasing additional capacity
- source water protection projects
- eligible green project reserve components
- flood resiliency projects or project components
- disaster recovery
4. Are loans or grants offered?
Both below market interest rate loans and loan forgiveness (similar to grants) is offered.
For loans, the interest rate subsidy is either 125 basis points off (non-equivalency) or 155 basis points off (equivalency) the entity's underlying credit rating. For example, for non-equivalency projects, if an applicant has an underlying rating of "AA" then the interest rate is reduced 125 basis points off the market's "AA" scale. Similarly, for equivalency projects the interest rate subsidy is a 155 basis point reduction from the appropriate market scale. Loan terms are available up to 30 years. For State Fiscal Year 2021, loans are offered with a minimum interest rate (or “floor”) adjusted for yield to maturity.
Principal forgiveness is available on a limited basis to eligible disadvantaged communities, small/rural disadvantaged communities, very small systems, green projects, and urgent need projects.
The amount of principal forgiveness for a regular disadvantaged project (up to 70%) is dependent on the annual median household income and household cost factor for the project area. Projects that serve a population of 1,000 or fewer are eligible for up to 100% principal forgiveness ($300,000 maximum). If a project is determined to be of urgent need, the applicant may qualify for 100% loan forgiveness ($500,000 maximum unless a disadvantaged community, which has up to a $800,000 maximum depending on the percentage category). 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.
5. What project components can I receive funding to complete?
The DWSRF provides financial assistance for planning, acquisition, design and construction.
6. How much funding is available?
Whether you are seeking financial assistance for smaller projects to large-scale capital improvement projects, the DWSRF can assist with your financing needs. For State Fiscal Year 2021, at least $150 Million is available under the DWSRF for all financing options including $30 Million in principal forgiveness.
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?
DWSRF financing is available year round. In order to be invited to apply for funding, entities must submit a completed Project Information Form.
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 2021 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 the EPA's Disadvantaged Business Enterprise program, which requires applicants and prime contractors to follow six affirmative steps in procurement (Guidance and additional information is available)
- Compliance with EPA's American Iron and Steel Provisions
- Review of legislative requirements regarding water loss threshold limits
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.