Drinking Water Revolving Fund

The Drinking Water Revolving Fund (also called the Drinking Water State Revolving Fund) helps communities build drinking water storage, treatment and distribution systems that comply with standards in the Safe Drinking Water Act.

Administered jointly by the Minnesota Public Facilities Authority and the Minnesota Department of Health, the fund provides below-market-rate loans to upgrade and construct public drinking water systems.

Overview

Eligibility 

Cities, counties, townships, sanitary districts or other governmental subdivisions responsible for providing public drinking water are eligible.

Minimum Project Requirements

Projects must be included on the Minnesota Department of Health's Project Priority List and the PFA's Intended Use Plan. Projects must be certified by the Minnesota Department of Health before the PFA may approve a loan.

Applicants must demonstrate the financial capacity to repay the loan and that complete financing of the project is in place. Borrowers must issue a general obligation bond to the PFA as security for the loan.

Allowable Costs

Allowable costs include land costs, site preparation, construction, engineering, equipment and machinery, bond issuance, and certain fees and contingency costs. Projects that are primarily to serve growth are not eligible

Interest Rates

Rates are determined by a market rate index (market scale) or the PFA's bond market rate (Authority scale), which ever is higher, less a 1.50 percent discount approved by the PFA. Borrowers with a service area population under 2,500 may be entitled to additional discounts. The type of security pledged to the PFA, the loan term and principal schedule, and the presence of a significant user will affect the interest rate of the loan.

Terms

Loans are amortized up to a maximum of 20 years, or up to 30 years if the average annual resident cost would exceed 1.4 percent of median household income.

Disbursement of Funds

Funds are disbursed on a monthly basis as costs are incurred.

Applications Accepted

Applications are accepted within six months after the Intended Use Plan is approved using the PFA's loan application forms. The IUP is compiled once a year but may be amended during the year.


Intended Use Plan

The Intended Use Plan (IUP) identifies projects and activities the PFA intends to fund from the Drinking Water Revolving Fund (DWRF) during the state fiscal year, which runs July 1 to June 30.

Drinking Water Revolving Fund Documents


Applications and Forms

Visit the Minnesota Department of Health's Drinking Water Revolving Fund Web pages.

Contract Packet

The Contract Packet lists required contract conditions that apply to all Clean Water and Drinking Water Revolving Fund projects. It contains forms that must be used in the procurement process.

This packet must be included in all bidding and contract documents.