Drinking Water State Revolving Fund Program

Additional Information

Available Assistance

  • Financial Assistance

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Background

The Drinking Water State Revolving Fund was created to help communities finance infrastructure improvements that are needed to protect public health and ensure compliance with drinking water standards. Priority is given to eligible projects that address the most serious risk to human health, are necessary to ensure compliance with the requirements of the Safe Drinking Water Act, and assist systems most in need, on a per household basis, according to state-determined affordability criteria. All 50 states and Puerto Rico operate DWSRF programs. Through this program they receive annual capitalization grants from the EPA, which are used to provide below-market loans and other types of assistance to public water systems. States typically must provide a 20% match in funding.

Repayments of DWSRF loans begin up to 18 months after project completion, with loan terms up to 30 years for most communities or up to 40 years for state-defined disadvantaged communities. Additionally, states may use a portion of their capitalization grants from the EPA as “set-asides” to help communities build the technical, managerial and financial capacities of their water systems. 

Incorporating resilience into drinking water infrastructure projects is a standard practice to support sustainable systems that meet national drinking water goals. There are several ways that DWSRF funding may be used to address climate risks to drinking water systems or build system resilience. Capital infrastructure projects undertaken to incorporate new technologies or upgrade infrastructure to enhance resilience can be funded by the DWSRF. DWSRF assistance, either through the loan fund or the set-asides, can also be used for adaptation and mitigation planning to address extreme weather events such as droughts, floods, earthquakes, landslides, tornadoes and forest fires. The DWSRF set-asides could be used to assist public water systems with developing assessments and emergency response plans, including the new requirements under the America’s Water Infrastructure Act. More information specific to resilience can be found in the Addressing Water System Resiliency with the Drinking Water State Revolving Fund factsheet.

Eligibility

Who is generally eligible to apply? 

States can provide DWSRF financial assistance to:

  • Existing privately- and publicly-owned community water systems and nonprofit non-community water systems.
  • New community water systems that represent cost-effective solutions to existing public health problems with serious risks caused by:
    • Unsafe drinking water provided by individual wells or surface water sources.
    • Technical, managerial and financial difficulties that consolidation into a new regional community water system can address.  

Multiple community water systems can join a consortium to apply for a single loan for a mutually beneficial project or set of projects. Systems in significant noncompliance with any requirement of a national primary drinking water regulation are not eligible to receive DWSRF assistance unless the state determines the assistance will ensure compliance. General DWSRF eligibility information can be found in the DWSRF Eligibility Handbook.

How can projects funded by this program incorporate adaptation and resilience considerations?

The DWSRF programs provide assistance for a wide range of eligible activities aimed at improving drinking water infrastructure that can also help communities become more resilient to natural disasters and climate-related extreme weather events. There are six main categories of eligible projects:

  • Treatment.
  • Transmission and distribution.
  • Source.
  • Storage.
  • Consolidation.
  • Creation of new systems.

Projects can be funded under multiple categories. Examples of climate adaptation and resilience projects supported by this program include: 

  • Establishing desalination plants to convert seawater into potable water, providing a reliable water source for areas facing freshwater scarcity due to prolonged droughts. Providing an alternative source of potable water allows these plants to adapt to decreased freshwater availability due to droughts, ensuring communities can sustain water supply even as traditional sources become scarce. 

  • Replacing old lead service lines with corrosion-resistant materials, ensuring safe drinking water and reducing health risks, particularly in communities facing water quality challenges. Replacing aging infrastructure with modern, safer materials adapts to the need for healthier communities and addresses the long-term sustainability of water systems in the face of deteriorating pipes exacerbated by changing environmental conditions. 

  • Constructing or upgrading raw water storage facilities at treatment plants to ensure a consistent supply into the plant, enhancing system resilience against variability in water availability. By increasing raw water storage capacity, communities can adapt to fluctuating water availability caused by unpredictable weather patterns, ensuring a stable water supply for treatment and consumption even during dry spells. 

  • Developing infrastructure for the treatment and distribution of reclaimed wastewater for non-potable uses, reducing demand on potable water sources and increasing drought resilience. This infrastructure adapts to the challenges of water scarcity and the need for sustainable water management by treating and reusing wastewater, thus reducing the reliance on freshwater sources and enhancing drought resilience. 

  • Creating interconnections between water systems to allow for emergency sharing of resources during droughts or contamination events, enhancing regional water supply security and adaptability. Developing interconnections between different water systems allows for flexible water resource management and helps facilitate the movement of water where it's needed most, ensuring supply continuity and resilience. 

For more project examples please see EPA’s DWSRF Eligibility Handbook. Additionally, see how the DWSRF programs address water system resiliency.

Available Technical Assistance   

States can use DWSRF set-asides to hire “third-party” technical assistance providers for water systems that need technical assistance. They can also use set-asides to provide technical assistance and trainings for public water systems on a variety of topics, including water system resilience.

Connections to Other EPA, Federal or Non-Governmental Efforts 

The DWSRF program’s reach and benefits can be expanded through co-funding opportunities with other federal, state and private sources. Support offered by the DWSRF can be used in combination with resources offered through other programs to advance climate resilience projects, such as:

  • Clean Water State Revolving Fund and Water Infrastructure Finance and Innovation Act: The CWSRF and WIFIA programs can support a variety of climate resilience projects. For example, both the CWSRF and DWSRF programs can finance source water protection and green infrastructure activities in different ways. WIFIA is also able to fund any project that is also eligible for funding under both SRF programs, which allows project proponents access to funding for larger scale projects. For more information, please see Protecting Source Water with the Clean Water and Drinking Water State Revolving Funds. 
  • Rural Utilities Service Water and Environmental Programs and Memorandum of Understanding Between the EPA and the Department of Homeland Security: DWSRF projects are often co-funded with another federal source, including funds from USDA’s Rural Utilities Service Water and Environmental programs and the Federal Emergency Management Agency. The EPA and FEMA have an MOU that establishes a framework for both SRF programs to assist and collaborate with FEMA disaster assistance grant programs. The SRF programs work cooperatively with FEMA and state, local, and Tribal governments to allow local entities to quickly recover and restore their vital infrastructure after a presidentially declared disaster. The proposed activities in the MOU streamline coordination between FEMA and the SRF programs to enable funding to be made available as quickly as possible to support essential infrastructure projects and increase their resilience to future disasters. 
  • Water Infrastructure and Resiliency Finance Center: Visit the Water Infrastructure and Resiliency Finance Center website to explore other federal sources of funding that can supplement DWSRF projects.

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Last updated on September 11, 2024