Drinking Water State Revolving Fund (DWSRF)

The Drinking Water State Revolving Fund (DWSRF) Loan Program in Indiana offers low-interest financing for the construction of drinking water infrastructure. Since its first loan in 1999, the DWSRF has provided over $321 million in financing to Indiana communities, resulting in more than $34 million in savings due to its subsidized interest rates. In the fiscal year 2008 alone, these savings amounted to more than $8 million.

The fund initially started with capitalization grants from the U.S. Environmental Protection Agency (EPA) and continues to receive such grants. Additionally, it uses repaid loans and market leveraging to increase the available funds at a low-interest rate for eligible projects.

Entities eligible for DWSRF loans include political subdivisions like cities, towns, counties, regional water districts, and privately-owned or non-profit facilities. The types of projects eligible for funding include the construction of source intake structures and wells, treatment plant facilities, water storage facilities, and transmission and distribution mains, including water line extensions to unserved properties with water quality issues.

The loan terms under the DWSRF are quite flexible. Loans typically have a fixed rate and a 20-year term, but terms can extend up to 35 years for qualifying projects. Interest rates are adjusted quarterly and are at or below 90% of the average 20-year AAA-rated, general obligation bond Municipal Market Data. These rates can be further reduced for projects with Green Project Reserve components, nonpoint source features, or for qualifying projects that include lead line replacement.

The loan approval process involves several steps, including the submission of a loan application, project planning meetings, technical and environmental reviews, and compliance with various regulatory requirements..