Summary: Small municipalities should consider leveraging the Environmental Protection Agency’s (EPA) Clean Water State Revolving Fund (CWSRF) if they require a source of low-cost financing to address stormwater concerns or create a green infrastructure project, including those that provide flood resilience and risk reduction. This is a program supported by EPA and administered by states. Some states may have customized loan terms to meet the needs of small and disadvantaged communities.

Eligible activities: Construction and technical assistance for publicly owned treatment works; nonpoint source pollution management systems; projects that support comprehensive management plans within National Estuary Program study areas; decentralized wastewater treatment systems; stormwater management; water conservation; watershed pilot projects; and water reuse. For example, the City of New Smyrna Beach, Florida, improved its stormwater management systems and built swales using four loans totaling over $3 million that the City received through the program.

Funding: Generally, no federal statutory maximums exist for eligible activities, although individual states allocate funds to prioritized projects and may impose additional limitations. In Massachusetts, project funding for clean water initiatives in 2018 ranged from $723,000 for street drainage improvements to $81 million for a water pump station and river crossing.

Cost share: Most assistance that municipalities receive through CWSRF is for loans that have to be repaid 100% to the CWSRF.

Application process:

• Project selection occurs annually at the 51-state level CWSRF programs across the country.
• Search for more information about the program using CFDA number 66.458.
• To apply, find your specific state program online.
• In 2018, the average loan interest rate was 1.5%.
• The Infrastructure Investment and Jobs Act (IIJA) requires that 49% of IIJA funds provided through the CWSRF General Supplemental Funding must be provided as grants and forgivable loans to communities that meet the state’s affordability criteria or certain project types.