Clean Water State Revolving Fund

40 Percent Grant/Direct Loans for Construction of Public Wasterwater Systems

40 Percent Construction Grants/Direct Loans

Grants from the State 40 Percent Construction Grant Program will be available to applicants that do not qualify for funding under the leveraged loan program. This program funds 40 percent of the eligible project costs and is generally geared to the more economically disadvantaged and smaller communities. Those who are on the fundable list for a 40 percent grant can also be considered for eligibility on the direct loan list for up to 60 percent of the eligible project costs if requested. The 40 percent grant and loan may also be used in a total financing package with other granting agencies.

Due to the current economic conditions in the state, funds for the State 40 Percent Grant Program are extremely limited. this program may be unavailable during Fiscal Year 2005.

Question about funding public wastewater systems throught 40 Percent Grant / Loan program

Q. Who qualifies for the direct loan program?
Q. How does the direct loan work?
Q. What will the interest rate of a direct loan be?
Q. What are the additional costs to participate in the direct loan program?

Q. Who qualifies for the direct loan program?

A. If a community cannot qualify for an SRF leveraged loan and is on the fundable list for a 40 percent grant, it may be considered for a direct loan for up to 60 percent of the eligible project cost. Applicants that want to participate in the direct loan program in conjunction with the grant program should indicate this in their application.

Q. How does the direct loan work?

A. The community must have a successful bond issue. The department will purchase the city's revenue or general obligation bonds and provide a below market interest rate.

Q. What will the interest rate for a direct loan be?

A. The interest charged by the department will be essentially the same interest rate currently being charged to the leveraged loan recipients.

Q. What are the additional costs to participate in the direct loan program?

A. The department will charge a small annual administration fee just as in the leveraged loan program. The recipient must also fund a debt service reserve and compensate the paying agent and bond counsel for their services.

To receive additional information on the 40 percent grant/direct loan program see the Contact Information.