Water State Revolving Fund
The repayment period for loans is
20 years, and 30 years for financially disadvantaged
communities. The interest rate is 60% of the market rate
as established using the "Bond Buyer 20 - Bond General Obligation Bond Index".
The rate does not change over the life of the loan. Repayment in
equal semiannual amounts begins six months after
project work is scheduled to be completed. The repayment revenue source must be identified;
most commonly a pledge of water and sewer utility revenues is, used but other types of revenues can be considered.
Generally, pledged revenues
resulting from the operation of water systems or water and sewer systems shall be as
- Pledged revenue shall be
not less than 1.15 times the amount required to make each semiannual loan repayment.
- In addition, for project sponsors who have not
demonstrated the ability to service long term debt, special loan security provisions shall
be negotiated that provide assurance that debt service requirements will be fulfilled.
For project sponsors who have not
demonstrated the ability to service long term debt additional security provisions shall be
negotiated to provide:
- Additional escrowed
reserve funds (equivalent to not less than five semiannual loan repayments) and a lien on
the assets of the project sponsor.
- A letter of
credit from a bank or trust company and a lien on the assets of the project sponsor.
- A personal or corporate, as applicable, obligation
ensuring that all semiannual repayments can be made.
- Other security features equivalent to those