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Principal forgiveness is an additional subsidy that reduces the amount of principal the borrower is required to pay back. It may be available for planning and design and construction loans. The same eligibility requirements, as described below, are relevant for each type of loan.
Projects that address emerging contaminants may be eligible to receive emerging contaminants funding; an award of emerging contaminants funds may be up to 100% forgivable. Eligibility requirements for emerging contaminants funding and related principal forgiveness are different than the requirements below. For more information, see EPA's Emerging Contaminants Fact Sheet for more information.
A. Project implements improved water efficiency
See Appendix B: Water Efficiency on the CWSRF web page.
B. Project implements improved energy efficiency
See the CWSRF Appendix C: Energy Efficiency on the CWSRF web page.
Per EPA Guidance, states have always had the option of funding such projects outside the GPR with no business case required. For the Oregon CWSRF program, a business case is not required to justify energy efficient and green project components.
C. Project mitigates stormwater runoff including grey stormwater and green stormwater
See Appendix A: Green Infrastructure on the CWSRF web page and the CWSRF Eligible Product document for more information.
D. Sustainable planning, design, or construction
See Appendix D: Environmentally Innovative on the CWSRF web page.
See also, The Effective Utility Management guide from EPA
The Clean Water Act Section 603(i) states that additional subsidization (principal forgiveness) must be provided to eligible CWSRF assistance recipients or project types as described in section 603(i) of the CWA:
To benefit a municipality that meets the state's affordability criteria as established under the CWA section 603(i)(2)
To benefit a municipality that does not meet the state's affordability criteria but seeks additional subsidization to benefit individual ratepayers in the residential user rate class (ratepayer hardship)
To any eligible recipient to implement a process, material, technique, or technology that addresses water or energy efficiency goals; mitigates stormwater runoff; or encourages sustainable project planning, design, and construction.
The Clean Water Act provides the additional definitions with respect to what is required to be included in “affordability criteria"
Other data determined relevant by the state
Applicant is determined eligible for principal forgiveness as part of application review and identified on the Intended Use Plan.
To receive principal forgiveness applicants must:
Complete all required loan exhibits
Be ready to sign a loan
Principal forgiveness awards are based on availability of funds
Principal forgiveness amounts are finalized and awarded at loan signing based on availability of funds.
Principal forgiveness scoring
Eligible projects may need to score higher than other eligible projects when not enough principal forgiveness funds are available.
See Appendix 7 Principal Forgiveness - eligibility and limits of the Intended Use Plan includes a section on Principal Forgiveness Scoring with point system based on eligibilities for principal forgiveness.
Principal forgiveness benefits the borrower twice:
The maximum subsidization that a borrower can receive per state fiscal year is $2,000,000. Borrowers eligible for principal forgiveness can only be awarded a maximum amount of $2,000,000 in additional subsidization per state fiscal year, regardless of the number of active loans or projects the borrower has with the program. This includes all subsidization awarded to all loan types (planning loans, design only loans, construction only loans and design and construction loans). Borrowers that are eligible recipients may only receive a maximum subsidization award per project up to the max of $2,000,000 or 50% of the loan amount, whichever is less.
Alli MillerCommunity and Program Assistance503-960-6619
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