The Drinking Water State Revolving Loan Fund (DWSRF) was established by the 1996 amendments to the Safe Drinking Water Act (SDWA). The DWSRF is a financial assistance program to help water systems and states to achieve the health protection objectives of the SDWA. (See 42 U.S.C. §300j-12.) The program is a powerful partnership between EPA and the states.

Congress appropriates funding for the DWSRF. EPA then awards capitalization grants to each state for their DWSRF based upon the results of the most recent Drinking Water Infrastructure Needs Survey and Assessment. The state provides a 20 percent match. States have the option of taking a variety of set-asides. These set-asides help fund state programs and activities to ensure safe drinking water. In total, states may take approximately 31% of their capitalization grant in set-asides. After taking their set-asides, states place the balance of their capitalization grant, together with the state match, into a dedicated revolving loan fund. This revolving fund provides loans and other authorized assistance to water systems for eligible infrastructure projects. As water systems repay their loans, the repayments and interest flow back into the dedicated revolving fund. These funds may be used to make additional loans.

Building on a federal investment of over $21.0 billion, the state DWSRFs have provided more than $41.1 billion to water systems through 2019. This assistance was provided through over 15,425 assistance agreements for:

• improving drinking water treatment
• fixing leaky or old pipes (water distribution)
• improving source of water supply
• replacing or constructing finished water storage tanks
• other infrastructure projects needed to protect public health