The DWSRF provides a significant financial incentive for public and private water systems to finance needed drinking water infrastructure improvements (e.g. treatment plants, distribution mains, storage facilities). Similar to the successful Clean Water State Revolving Fund (CWSRF) for wastewater treatment and other projects, the DWSRF provides subsidized low interest rate financing and limited grants for construction of eligible water system projects.

As financings are repaid, money will be available to be used again for new financings - a true revolving fund. For communities with demonstrated financial hardship, interest rates can be reduced to as low as zero percent. In addition, in the event of severe financial hardship, financial hardship grants pursuant to the Federal Safe Drinking Water Act may be available. The DWSRF is administered jointly by the New York State Environmental Facilities Corporation (EFC) and the New York State Department of Health (DOH).

EFC administers the financial aspects of the DWSRF. Complete applications for DWSRF financing are submitted to EFC, the financing is obtained through EFC, and repayments are made to EFC.

DOH manages the technical review for DWSRF projects. It regulates the safety and adequacy of drinking water delivered by public water systems in New York State. For the DWSRF, DOH accepts pre-application forms and technical reports; scores, ranks, and lists projects on the IUP, and reviews technical documents for both the pre-application and the complete application.