Together, America Prospers

Revolving Funds for Financing Water and 

Wastewater Projects (Revolving Fund Program) 

What does this 

program do?

This program helps qualified 

nonprofits create revolving loan 

funds that can provide financing 

to extend and improve water and 

waste disposal systems in rural 

areas.

Who can apply for 

these grants?

Nonprofits that have:

• Legal authority to operate a

revolving loan fund

• Financial, technical, and

managerial capacity to comply

with relevant state and federal

laws and regulations

How do we get 

started?

Contact a USDA Rural 

Development program specialist in 

the state or territory in which the 

proposed revolving loan fund will 

be available. You will find a list of 

state offices at this link: 

https://go.usa.gov/xtpEe. 

Our program specialists will help 

you start the application process.

How can grant funds be used?

These grants are used to create a 

revolving loan fund to help eligible 

water or wastewater systems serving 

rural areas, and which are owned and 

operated by:

• State and local governments

• Nonprofits

• Federally-recognized Tribes

Revolving loan fund recipients must:

• Be unable to get commercial credit

for the proposed project

• Have - or secure - legal authority to

own and operate the system, and to

get a revolving loan

How can revolving loan funds be 

used? 

• Pre-development costs of water and

wastewater projects

• Small capital improvement projects

that are not part of regular operations

and maintenance

What are the revolving loan 

fund terms?

• The maximum loan for each borrower

is $200,000, with a term of 10 years

• The interest rate is determined by the

nonprofit that manages the revolving

loan fund, and must be approved by

USDA’s Rural Utilities Service

What is an eligible area?

• Rural areas and towns with

populations of 10,000 or fewer.

• You can check eligible addresses at

this link: https://go.usa.gov/xta6p

• Tribal lands in rural areas

• Colonias

Are matching funds required?

Yes. The applicant must contribute 

at least 20 percent. Note: Matching 

funds can come from the applicant 

or a third party, but cannot be in-kind 

contributions.

Who can answer questions?

• Staff in your local Rural Development

office. A list is available at this link:

https://go.usa.gov/xtpEe.

• Email the grant manager at

water-RD@usda.gov

What governs this program?

• Code of Federal Regulation 7 CFR

Part 1783 (available at this link:

https://tinyurl.com/48r2bhtj)

• Section 306 of the Consolidated

Farm and Rural Development Act

(available at this link:

https://tinyurl.com/4pmt5ewv - PDF)

Why does USDA Rural Development 

do this?

This program helps small communities 

extend and improve water and 

waste facilities for households and 

businesses in eligible rural areas. 

Good practices can save tax dollars, 

improve the natural environment, and 

encourage rural manufacturers and 

other businesses to locate or expand 

operations.

NOTE: Because information changes, always consult official program instructions 

or contact your local Rural Development office for help. A list is available at this link: 

https://go.usa.gov/xJHPE. You will find additional resources, forms, and program 

information at https://rd.usda.gov. USDA is an equal opportunity provider, employer, 

and lender.

Last Updated December 2022