Water and Waste Disposal Loans and Grants 

Who may receive assistance?

Public entities such as municipalities, counties, special purpose districts, Indian tribes, and corporations not operated for profit. Priority will be given to public entities in areas smaller than 5,500 people to restore a deteriorating water supply, or to improve, enlarge, or modify a water facility or an inadequate waste facility. Preference will also be given to requests which involve the merging of small facilities and those serving low-income communities.

1. Be unable to obtain needed funds from other sources at reasonable rates and terms.
2. Have legal capacity to borrow and repay loans, to pledge security for loans, and to operate and maintain the facilities or services.
3. Be financially sound and able to manage the facility effectively.
4. Have a financially sound facility based on taxes, assessments, revenues, fees, or other satisfactory sources of income to pay all facility costs including operation and maintenance, and to retire the indebtedness and maintain a reserve.

Water or waste disposal systems must be consistent with any development plans of the State, multi-jurisdictional area, counties, or municipalities in which the proposed project is located. All facilities must comply with Federal, State, and local laws including those concerned with zoning regulations, health and sanitation standards, and the control of water pollution.

Loan and grant funds may be used to do the following:

1. Construct, repair, improve, expand, or otherwise modify rural water supply and distribution facilities including reservoirs, pipelines, wells, and pumping stations.
2. Acquire a water supply or a water right.
3. Construct, repair, improve, expand, or otherwise modify waste collection, pumping, treatment, or other disposal facilities. Facilities to be financed may include such items as sewer lines, treatment plants, including stabilization ponds, storm sewer facilities, sanitary landfills, incinerators, and necessary equipment.
4. Pay necessary fees such as legal and engineering connected with development of facilities.
5. Pay other costs related to the development of the facility including the acquisition of rights-of-way and easements, and the relocation of roads and utilities.
6. Finance facilities in conjunction with funds from other agencies or those provided by the applicant.

Interim commercial financing will normally be used during construction, and Rural Development funds will be available when the project is completed. If interim financing is not available, or if the project cost is less than $50,000, multiple advances of Rural Development funds may be made as construction progresses.

The maximum term on all loans is 40 years. However, no repayment period will exceed any statutory limitation on the organization's borrowing authority nor the useful life of the improvement or facility to be financed.

Interest rates will be set periodically and are based on current market yields for municipal obligations. Certain loans may be made at a lower rate. The current rates may be obtained from any Rural Development office.

Applications for financial assistance are made at local offices of Rural Development. The local office staff will be glad to discuss services available from the Agency and explain application procedures. All applications are considered without regard to race, color, religion, sex, national origin, age, marital status, or physical or mental handicap (provided the applicant has the capacity to enter into legal contract) of the members of the groups applying for assistance, and service must be extended on the same basis.

All loans will be secured to adequately protect the interest of the Government. Bonds or notes pledging taxes, assessments, or revenues may be accepted as security if they meet statutory requirements. A mortgage may also be taken on the organization's facilities when State laws permit.

Funds may be available for up to 75 percent of eligible facility development costs. Such assistance may be made available for facilities serving the most financially needy communities to reduce user costs for eligible grant recipients to a reasonable level.

Purpose: Develop water and waste disposal systems, including solid waste disposal and storm drainage, in rural areas and towns with a population of 10,000 or less. Funds are available to public entities, such as municipalities, counties, special-purpose districts, and Indian tribes. In addition, funds may be made available to corporations operated on a not-for-profit basis. Priority will be given to public entities in areas with less than 5,500 people to restore a deteriorating water supply, or to improve, enlarge, or modify a water facility or an inadequate waste facility. Also, preference will be given to requests which involve the merging of small facilities and those serving low-income communities.

Purpose: Reduce water and waste disposal costs to a reasonable level for users of the system. Grants may be made, in some instances, up to 75 percent of eligible project costs. Eligible applicants are the same as for loans.

Purpose: Make grants to nonprofit organizations to provide technical assistance and training on a wide range of issues about the delivery of water and waste disposal service. The assistance is available in areas and towns with a population of 10,000 or less.

Purpose: Make grants to public and private nonprofit organizations to provide technical assistance and training to reduce or eliminate pollution of water resources and improve planning and management of solid waste facilities. Grants are available to rural areas and towns with a population of 10,000 or less.

Purpose: Provide on-site technical assistance to help assure cost-effective operation of rural water systems. Rural Utilities Programs have assisted rural water systems, via contracting, with day-to-day operational, financial, and management problems. The assistance is provided at no charge and may be requested by officials of rural water systems or by Rural Development personnel.

The Rural Development Rural Utilities Program will advise the applicant as to how to assemble information to determine engineering feasibility, economic soundness, cost estimates, organization, financing, and management matters in connection with the proposed improvements.

If financing is provided, Rural Utilities will also make periodic inspections to monitor project construction.