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DWSRF Construction Loan

Applications, Forms and Tools

All public community water systems and non-profit non-community water systems are eligible for DWSRF Construction loan funds.

A Priority list is developed on an annual basis, contained within the Intended Use Plan; an annual application is required. The list prioritizes water system infrastructure improvement projects for funding based on the seven criteria below.  For a description of the priority ranking system please refer to section 5 of the Intended Use Plan. For the most current priority list, refer to section 9 of the most recent IUP.

The seven criteria are:

  1. System facility deficiencies to be corrected by the project (a weighting factor of 1.2 is applied for eligible schools and childcare facilities).
  2. Physical consolidation of water systems.
  3. Financial need/affordability.
  4. Population.
  5. Downtown center preference.
  6. Source protection (only applies to Source Protection Loans funded thru the LASRF).
  7. Security improvements.

It is the intention of the state of Vermont to adhere to the priority list to the maximum extent possible.  However, there are certain funding limits that could result in changes to the list.  Also, the state recognizes that some systems may not be ready to proceed or emergency events could occur that would necessitate systems being bypassed in a given funding year.  A project may not be fundable when the priority list is first adopted, but through the bypass process, projects may become fundable.

The maximum loan amount is $3 million per funding cycle, with a $6 million dollar cap for any one project. There is currently no minimum project amount.

Interest rates are determined at the award of the loan, but are not finalized until project is closed and audited. Factors considered when determining the interest rate and loan term your project qualifies for are system and ownership type, median household income, equivalent residential units, operation & maintenance costs, existing water system debt and projected project debt. The table below summarizes the loan term and interest rate ranges.

The State of Vermont recognizes the need to provide additional assistance to certain water systems beyond what the standard DWSRF construction loan program offers.  The disadvantaged system program is intended to provide longer loan terms and principal forgiveness to water systems that have relatively low income and relatively high water user costs.  Unlike the standard loan program, certain disadvantaged systems are eligible for debt forgiveness as a means of making a water improvement project more affordable.


Planning All 0% 5 yrs.
Construction Municipal Community Non-disadvantaged (3%) - (0%) 20 yrs.
Construction Municipal/Disadvantaged (3%) - (-3%) 30 yrs.
Construction Private-Profit Community 3% 20 yrs.
Construction Private-Non-Profit Community (Disadvantaged) (3%) - (-3%) 30 yrs.
Construction Private-Non-Profit Community (Non-disadvantaged) 3% 20 yrs.
Construction Private-Non-Profit Non-Community 3% 20 yrs.
Construction Municipal (Non-Community) 3% 20 yrs.
Refinancing * Municipal (Debt incurred July 1, 1993 - April 5, 1997) 4.376% 20 yrs.
Refinancing * Municipal (Debt incurred after April 5, 1997) New loan rates New loan terms


 * Interest rate plus administrative fee and term will be the same as for the new loan, if funded within two years of the initation of construction.

DWSRF Program Guidance Docs is a procedures manual that provides the foundation for the implementation of the Federal program. This is, essentially, how the SRF program works.

All projects receiving DWSRF loan funds must receive an Environmental Review prior to the release of construction loan funding.  The level of detail and the amount of information provided in this environmental report is commensurate with the magnitude of construction activities and their potential impact on environmental and historical resources. Historically, DWSRF funded projects have received categorical exclusions, which are more intensive environmental review, because they are anticipated to have minimal or no impact. Guidance Doc #15 details the State Environmental Review Process (approved by USEPA) which describes the procedures used to satisfy the requirement under the National Environmental Policy Act (NEPA). All CatExs, FONSIs, and EISs are issued within a certain time frame, and are located on the Environmental Review Notice page.



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