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Infrastructure Projects

The Drinking Water State Revolving Fund provides low-cost loans to community and nonprofit non-community water systems for planning, design and construction of drinking water facility improvements.

Eligible Projects

  • New, repair or replacement of water sources, treatment, finished water reservoirs, pumping and transmission/distribution mains, including associated appurtenances, land/easement acquisition and control buildings.
  • Aquifer, Storage & Recovery projects.
  • Instrumentation, telemetry, water meter, AMR/AMI, backflow device and pressure reducing valve projects.
  • Safety, Seismic and Security improvements.
  • Projects which increase redundancy and reliability of critical assets.
  • Water system restructuring and/or consolidation to resolve noncompliance or technical, managerial and financial problems.
  • Planning and Design Activities in support of an eligible project, including feasibility studies, master plans, design documents, environmental documents and similar work.
Projects that resolve current health and or compliance issues, or address technical, managerial or financial problems through consolidation receive priority funding and greater financial incentives.

Ineligible Projects

Per 40 Federal Register Part 35.3520 (e&f), the following projects are considered ineligible:
  • Dams or rehabilitation of dams.
  • Water rights - except if the water rights are owned by a system that is being purchased through consolidation.
  • Raw water reservoirs or rehabilitation of raw water reservoirs - except those that are part of the treatment process and are on the property where the treatment facility is located.
  • Projects needed primarily for fire protection.
  • Projects needed primarily to serve future population growth. Project must be sized only to accommodate a reasonable amount of population growth expected to occur over the useful life of the facility.

Program Overview & Incentives

  • Interest rates are based on municipal bond rates (60-80% of the prior quarter's 20-Bond Index) with repayment terms up to 20 years for standard loans.
  • Loans for disadvantaged communities are allowed terms up to 30 years. Interest rates as low as 1% and may receive a percentage of the loan as principal forgiveness.
  • Projects that resolve current health and or compliance issues, or address technical, managerial or financial problems through consolidation may receive a percentage of the loan as principal forgiveness.
  • Eligible costs to contract for project management services and/or to administer Labor Standards Compliance may be awarded principal forgiveness.
  • Drinking Water Service's Circuit Rider Program provides free on-site technical services for community water systems serving populations under 10,000 and not-for-profit non-community water systems. The Circuit Rider can help water system's fill out a project letter of interest.
  • Additional subsidy incentives are associated with the Green Project Reserve (GPR), where categorical and business case related "green" elements of a project may be able to receive additional subsidies (not currently available).
  • Any project requesting $6 million or more requires additional review and approval from the Drinking Water Advisory Committee (DWAC).
  • Follow this link to view thePDF iconProgram Guidelines and Applicant's Handbook
  • All recipients of DWSRF funds must complete an environmental review on every project in accordance with the State Environmental Review Process (SERP). Oregon follows the policies and procedures outlined in the reference manual
    Environmental Review Process Handbook. For more information about SERP, contact Debra Lambeth, Environmental Review Coordinator, at or 971-673-0414.

Letter of Interest

The first step for eligible water systems to obtain DWSRF financial assistance is to submit a Letter of Interest (LOI). LOIs for infrastructure projects can be submitted at any time through Business Oregon's website, but should be submitted in consultation with the regional development officer for the area.

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