Subsidies

The SRF program has developed multiple ways for communities and utility systems to benefit from SRF financing. Reduced interest rates, principal forgiveness, and green project reserve subsidy are all financing options an applicant can explore in an attempt to reduce their overall financial burden for water infrastructure improvements. Communities and utility systems seeking infrastructure financing from SRF can take advantage of the following rate-reducing strategies.

1. Ability To Pay Index (ATPI) Reduced Interest Rates: The SRF program bases interest rates on a community’s ATPI and the Market Rate. Communities at a greater economic disadvantage will be awarded lower interest rates.
2. Principal Forgiveness for Small and Disadvantaged Communities: Small communities with low ATPIs may be eligible for principal forgiveness. Details on qualifications can be found in the Intended Use Plans under the Small and Disadvantaged Communities section.
3. Communities can qualify for both (1) ATPI Reduced Interest Rates and (2) principal forgiveness.
4. Green Project Reserve (GPR) Interest Rate Reductions: The SRF program may award additional interest rate reductions if the project proposal incorporates a significant amount of green infrastructure, water and energy efficiency, or sustainable, resilient, and innovative practices. Details on project requirements can be found in the Intended Use Plans under the Green Project Reserve Interest Rate Reductions section.
5. Communities can qualify for both (1) ATPI Reduced Interest Rates and (3) GPR Interest Rate Reductions if their proposal qualifies.
6. No single project submission is eligible for all three rate reducing strategies at one time.