Together, America Prospers

Water & Waste Disposal Loan & Grant Program

Immediate Measures 

to Support Rural 

Communities Affected 

by COVID-19

Borrowers may request the use of 

reserve account funds as a 

short-term solution to a one-time 

funds shortage.

Borrowers in good standing may 

request a short-term deferral 

of payments. 

Technical assistance is available 

to assess needs, develop workout 

agreements, develop/update 

vulnerability assessments and 

emergency response plans, 

and deliver financial and utility 

management training.

Rural Development will consider 

requests to waive certain site 

inspection requirements during 

the current COVID-19 National 

Emergency.

Applicants will be able to 

use alternative methods to 

notify the public, such as 

through videoconferences, 

teleconferences and public 

notices on websites and in local 

newspapers, as a substitute for 

the public meeting notification 

requirement for water and 

waste projects.

What does this program do? 

This program provides funding for 

clean and reliable drinking water 

systems, sanitary sewage disposal, 

sanitary solid waste disposal, and 

storm water drainage to households 

and businesses in eligible rural areas.

Who may apply? 

This program assists qualified 

applicants who are not otherwise 

able to obtain commercial credit on 

reasonable terms. Eligible applicants 

include: 

• Most state and local governmental 

entities 

• Private nonprofits 

• Federally recognized Tribes

What is an eligible area? 

Areas that may be served include: 

• Rural areas and towns with 

populations of 10,000 or 

less – check eligible addresses

• Tribal lands in rural areas 

• Colonias 

What kinds of funding are available? 

Long-term, low-interest loans. If 

funds are available, a grant may be 

combined with a loan if necessary to 

keep user costs reasonable. 

How may the funds be used? 

Funds may be used to finance 

the acquisition, construction or 

improvement of: 

• Drinking water sourcing, treatment, 

storage and distribution 

• Sewer collection, transmission, 

treatment and disposal

• Solid waste collection, disposal 

and closure 

• Storm water collection, transmission 

and disposal 

In some cases, funding may also be 

available for related activities such as: 

• Legal and engineering fees 

• Land acquisition, water and land 

rights, permits and equipment 

• Start-up operations and maintenance 

• Interest incurred during construction 

• Purchase of facilities to improve 

service or prevent loss of service 

• Other costs determined to be 

necessary for completion of the project 

• See 7 CFR Part 1780.7 and 1780.9

for a complete list

What is the loan term and rate? 

The loan term is up to a 40-year 

payback period, based on the useful 

life of the facilities financed with a fixed 

interest rate. The interest rate is based 

on the need for the project and the 

median household income of the area 

to be served. Contact us for details and 

current interest rates applicable for 

your project. 
Water & Waste Disposal Loan & Grant Program

Are there additional requirements? 

• Borrowers must have the legal 

authority to construct, operate and 

maintain the proposed services 

or facilities. 

• All facilities receiving federal 

financing must be used for a 

public purpose. 

• Partnerships with other federal, 

state, local, private and nonprofit 

entities that offer financial assistance 

are encouraged. 

• Projects must be financially 

sustainable.

How do we get started? 

Applications are accepted year round 

and may be filed electronically using 

RD Apply. The RD Apply Customer 

Help Guide is provided to help you 

get started and work through the 

application process. Applications 

are also accepted through your local 

RD office. Program resources are 

available online (i.e., forms, guidance, 

certifications, etc.). 

Who can answer questions? 

Contact the local representative 

who serves your area. Participating 

nonprofits in your area may also offer 

assistance and training. 

What governs this program? 

• Basic Program – 7 CFR, Part 1780

• Loan Servicing – 7 CFR, Part 1782

• Section 306 of the Consolidated 

Farm and Rural Development Act

Why does USDA Rural Development 

do this? 

This program helps very small, 

financially distressed rural communities 

extend and improve water and waste 

treatment facilities that serve local 

households and businesses. Good 

practices can save tax dollars, improve 

the natural environment, and help 

manufacturers and businesses to locate 

or expand operations.

NOTE: Because citations and other information may be subject to change, 

please always consult the program instructions listed in the section above 

titled “What Governs This Program?” You may also contact your local office for 

assistance. You will find additional forms, resources, and program information at

rd.usda.gov. USDA is an equal opportunity provider, employer, and lender.

Last Updated February 2021