DWSRF Short-term Interest-Free Financing (STIFF) is available to applicants with projects listed on the current IUP Project Readiness List. 

The project needs to:

• have an approved engineering report;
• have completed the State Environmental Review Process (SERP); 
• have formed any necessary special improvement district; and 
• construction not be more than 50% complete.

Additional items of note for DWSRF STIFF financing:

• STIFF financing provides interest-free financing for up to three years to allow recipients to design and initiate construction on their drinking water projects without the interest expense associated with bond anticipation notes, etc.
• STIFF financing is limited to 33 1/3% of:  1) the project IUP amount as listed on the Project Readiness List or 2) the DWSRF eligible amount as determined during review prior to the closing.  
• STIFF funds will not be available to pre-finance any awarded grants. 
• Recipients that qualify for hardship assistance may obtain up to 100% of the eligible and documented costs, but cannot exceed the IUP amount.  
• For non-hardship projects that receive STIFF financing an administrative fee equal to 0.6% will be charged.
  

Elements and fees associated with DWSRF long-term subsidized financing are summarized as follows:

• Bonds issued to fund DWSRF financing will be secured by federal and state match dollars deposited to and held in program financing indentures as security on behalf of certain series of DWSRF bonds.
• Projects receive an interest subsidy either from earnings received from a dedicated reserve allocation equal to one-third of the financing amount or from other program resources.
• Certain hardship communities may receive an interest subsidy of more than one-third the financing amount.

• Other program assets or investment earnings from the reserve allocation will provide an interest subsidy to the recipients, thereby reducing the net interest rate on the financing.
• In instances where the project qualifies for hardship financing, the interest subsidy will be determined based on the net financing rate, effectively providing each recipient a 33 1/3% interest subsidy based on the interest rate of the EFC bonds sold for the leveraged financing as may be reduced by applicable tax law.

"Leveraged" financing refers to financing funded from the proceeds of bonds that EFC issues to finance a group or pool of projects. Bonds issued to finance SRF projects will be secured by federal and state match dollars ("Reserve Allocation") deposited to recipient reserve accounts. DWSRF projects financed from bond proceeds will receive reserve allocation equal to approximately one-third of the financed amount.

“Direct" financing refers to financing for recipients who do not qualify for leveraged financing. The funds for these financings are made available from DWSRF resources.

Regular reduced rate direct or hardship financings are available to applicants who are eligible for hardship assistance or determined not to be eligible for leveraged financings. This includes applicants who are determined by EFC to be non-investment grade or who have submitted small financing requests. The regular reduced rate financings are the results of an interest subsidy provided by the investment earnings from the corpus allocation.

The DWSRF Hardship Policy describes the reduced interest rate financing program and procedure used by EFC to determine financial hardship.  Click here to view the DWSRF Hardship Policy and Hardship Application Form.

Financial hardship financing is available to qualified applicants at rates below the regular reduced interest rate, and may be interest-free.

The DWSRF Hardship Policy describes the reduced interest rate financing program and procedure used by EFC to determine financial hardship.  Click here to view the DWSRF Hardship Policy and Hardship Application Form.

Financial hardship grants are provided pursuant to the Federal Safe Water Drinking Act. Hardship grants are available to public water systems (up to $2 million or 75% of the eligible project cost, whichever is less) for drinking water projects not more than $14 million. The grants provide community water systems which otherwise could not afford essential projects with the financial resources to undertake these projects.

The DWSRF Hardship Policy describes the reduced interest rate financing program and procedure used by EFC to determine financial hardship.  Click here to view the DWSRF Hardship Policy and Hardship Application Form.

Short-term Market-Rate Financing (SMRF) is a short-term financing program to assist applicants with projects scoring below the DWSRF IUP Readiness List subsidy line or where DWSRF Short-term Interest-Free Financing (STIFF) is limited.  EFC will provide short-term financing at our cost of funds or market rate. 

SMRF financing may be provided to applicants with projects on the Final IUP Readiness List with scores:

• above the subsidy line requiring short-term financing in excess of the amount available under the DWSRF STIFF program; or
• below the subsidy line that have applied for a Bond Guarantee and are in need of short-term funds; or
• above or below the subsidy line to pre-finance third party grants.

Projects with scores below the subsidy line that receive SMRF financing will not be assigned the 1000 bonus points; however, the project can remain on the Readiness List until the project's priority ranking score becomes reachable for subsidized financing in a subsequent IUP financing period.  Financing applications can be submitted anytime.

Long-Term Market-Rate Financing (LTMRF) is available to support eligible projects for which DWSRF subsidized funding is not available.  For projects that qualify for subsidy assistance, a LTMRF will be available to extend repayment terms beyond the previous DWSRF limit of twenty years from project completion.  Bonds issued by recipients and purchased by EFC may be issued for terms of up to thirty years from the financing date.  Financing applications can be submitted anytime.

The LTMRF Program offers recipients access to financing at preferred AAA interest rates.  For recipients who take advantage of the LTMRF program, their project will be retained on the Readiness List so long as to enable these recipients to compete in future years for a DWSRF subsidized funding or a hardship determination, if applicable.

To view the DWSRF Financing Options Matrix click here.