Water & Environmental Program
The purpose of the Water and Environmental Program is to develop water and wastewater disposal
(including solid waste disposal and storm drainage) systems in rural areas and towns with populations of 10,000 or less.
Eligible applicants include public entities such as municipalities, counties, special-purpose districts, Indian tribes,
and Corporations not operated for profit.
Rural Development can also guarantee water and wastewater loans made by local banks and other eligible lenders.
Applicants must be unable to obtain commercial financing at reasonable rates and terms or finance the project from existing
resources.
The proposed project must serve a rural area not likely to decline in population below that for which the project is designed.
Proposed projects should be necessary for orderly community development consistent with a comprehensive community or county
development plan.
Facilities must be modest in design, size, and cost. Water meters, a primary instrument for promoting conservation, are
required. In addition, all water and wastewater systems must either meet the standards set by the State of Montana
Department of Environmental Quality (DEQ) or the Agency having primacy.
For more information on this or any program offered by Rural Development, please contact your
nearest Area Office.
Program Facts
CP loans have a term of up to 40 years or for the useful life of the facility, whichever is less. There are three different interest rates available for CP loans.
- The poverty line rate of 4.5% per annum applies to communities with a median household income (MHI) below the state poverty level or 80% of the non-metropolitan MHI for Montana.
- The intermediate rate applies to projects in communities that are not eligible for the poverty rate and have a MHI less than 100% of the non-metropolitan MHI for Montana. The intermediate interest rate is set halfway between the poverty line interest rate and the market rate.
- The market rate applies to projects in communities who have a MHI exceeding 100% of the non-metropolitan MHI for Montana.
The National office sets the intermediate and market rates quarterly, based on the bond market. Security for the loan
can include revenue bonds; other pledges of taxes or assessments; GO Bonds; and assignment of income. Whenever possible,
loan funds are combined with other federal and state grant financing to reduce the fees to users of the system.
Depending on the median household income and need, communities may qualify for grant funds of up to 75% of the eligible
project costs to help reduce water and waste disposal rates to reasonable levels.
Total grant funding cannot exceed the following percentages of eligible project development costs:
- 75% when the community meets poverty line interest rate criteria.
- 45% when the community meets intermediate interest rate criteria.
In addition to financial assistance, CP provides technical assistance to help ensure proper operation and design of rural water and waste systems. CP also funds technical assistance organizations that can assist with application and technical assistance during project planning, design, and construction.
| Program | Water & Waste Disposal Loans and Grants | Water & Waste Disposal Loan Guarantees | Solid Waste Management Grants |
|---|---|---|---|
| Objective | Providing infrastructure for rural areas | Provide technical assistance and/or training to help communities reduce the solid waste stream | |
| Applicant | Public entities and non-profit corporations apply to RD | Eligible lenders obtain guarantee for loans made and serviced by them. Lenders should contact RD. | Non-profit organizations and public bodies. Contact RD Area Office. |
| Uses | Build, repair, improve public water systems and waste collection & treatment systems, and other related costs | Provide technical assistance and training to reduce pollution of water resources and improve management of solid waste facilities, reduction of solid waste in streams | |
| Population | Rural areas and places up to 10,000 population | ||
| Loan/Grant | Direct loan and/or grant | Loan guarantee | Grant |
| Terms & Conditions | Interest rates are set quarterly based on an index of current market yields for municipal obligations. Repayment maximum 40 years. Grant funds may be available. | Not eligible for grant | Projects funded based on selection at National level |
