Learn About the WIFIA Program
The WIFIA program's mission is to:
Accelerate investment in our nation's water and wastewater infrastructure by providing long-term, low-cost supplemental credit assistance under customized terms to creditworthy water and wastewater projects of national and regional significance.
WIFIA works separately from, but in coordination with, the State Revolving Fund (SRF) programs to provide subsidized financing for large dollar-value projects.
The Water Infrastructure Finance and Innovation Act of 2014 (WIFIA) established the WIFIA program, a federal credit program administered by EPA for eligible water and wastewater infrastructure projects. WIFIA and the WIFIA implementation rule outline the eligibility and other requirements for prospective borrowers.
Eligible borrowers are:
- Local, state, tribal, and federal government entities
- Partnerships and joint ventures
- Corporations and trusts
- Clean Water and Drinking Water State Revolving Fund (SRF) programs
The WIFIA program can fund development and implementation activities for eligible projects:
- Projects that are eligible for the Clean Water SRF, notwithstanding the public ownership clause
- Projects that are eligible for the Drinking Water SRF
- Enhanced energy efficiency projects at drinking water and wastewater facilities
- Brackish or seawater desalination, aquifer recharge, alternative water supply, and water recycling projects
- Drought prevention, reduction, or mitigation projects
- Acquisition of property if it is integral to the project or will mitigate the environmental impact of a project
- A combination of projects secured by a common security pledge or submitted under one application by an SRF program
Eligible development and implementation activities are:
- Development phase activities, including planning, preliminary engineering, design, environmental review, revenue forecasting, and other pre-construction activities
- Construction, reconstruction, rehabilitation, and replacement activities
- Acquisition of real property or an interest in real property, environmental mitigation, construction contingencies, and acquisition of equipment
- Capitalized interest necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses and other carrying costs during construction
Important Program Features
- $20 million: Minimum project size for large communities.
- $5 million: Minimum project size for small communities (population of 25,000 or less).
- 49%: Maximum portion of eligible project costs that WIFIA can fund.
- Total federal assistance may not exceed 80% of a project’s eligible costs.
- 35 years: Maximum final maturity date from substantial completion.
- 5 years: Maximum time that repayment may be deferred after substantial completion of the project.
- Interest rate will be equal to or greater than the U.S. Treasury rate of a similar maturity at the date of closing.
- Projects must be creditworthy and have a dedicated source of revenue.
- NEPA, Davis-Bacon, American Iron and Steel, and all other federal cross-cutter provisions apply.
The WIFIA program offers loans with low, fixed interest rates and flexible financial terms. Borrowers and their customers benefit from significant cost saving.
- A single fixed interest rate is established at closing. A borrower may receive multiple disbursements over several years at the same fixed interest rate.
- Interest rate is equal to the US Treasury rate of a similar maturity. The WIFIA program sets its interest rate based on the U.S. Treasury rate on the date of loan closing. The rate is calculated using the weighted average (WAL) life of the loan rather than the loan maturity date. The WAL is generally shorter than the loan’s actual length resulting in a lower interest rate.
- Interest rate is not impacted by the borrower’s credit or loan structure. All borrowers benefit from the AAA Treasury rate, regardless of whether they are rated AA or BBB. The WIFIA program does not charge a higher rate for flexible financial terms.
- Customized repayment schedules. Borrowers can customize their repayments to match their anticipated revenues and expenses for the life of the loan. This flexibility provides borrowers with the time they may need to phase in rate increases to generate revenue to repay the loan.
- Long repayment period. WIFIA loans may have a length of up to 35 years after substantial completion, allowing payment amounts to be smaller throughout the life of the loan.
- Deferred payment. Payments may be deferred up to 5 years after the project’s substantial completion.
- Subordination. Under certain circumstances, WIFIA may take a subordinate position in payment priority, increasing coverage ratios for senior bond holders.
- WIFIA loans can be combined with various funding sources. WIFIA loans can be combined with private equity, revenue bonds, corporate debt, grants, and State Revolving Fund (SRF) loans.
Law and Regulations
The Water Infrastructure Finance and Innovation Act (WIFIA) (PDF) (10 pp, 156 K, About PDF) was signed into law by the President on June 10, 2014, and authorized the WIFIA program to be managed by EPA Headquarters. WIFIA was amended by section 1445 of the Fixing America's Surface Transportation Act of 2015 (FAST) (491 pp, 1.3 M, About PDF) and section 5008 of the Water Infrastructure Improvements for the Nation Act of 2016 (WIIN) (277 pp, 812 K, About PDF).
The interim final WIFIA implementation rule, Credit Assistance for Water Infrastructure Projects, was signed by EPA on December 6, 2016, and establishes the guidelines for the WIFIA program and the process by which EPA will administer credit assistance. The interim final Previously-Incurred Costs in the WIFIA Program was signed by EPA on June 18, 2018 and amends the WIFIA regulations to clarify the process and conditions for including costs incurred and the value of integral in-kind contributions made before loan closing in the calculation of total eligible costs. It also explains the process for being reimbursed for those eligible costs by WIFIA loan proceeds.
The final fee rule, Fees for Water Infrastructure Project Applications under WIFIA, was signed by EPA on June 19, 2017, and establishes the fees related to the provision of federal credit assistance under WIFIA.
- What is the best way to stay informed about the WIFIA program?
- Are WIFIA funds allotted to states in a manner similar to the SRF program?
No. WIFIA assistance can go to any state and will be awarded competitively based on letters of interest received for eligible, creditworthy projects. In making awards, EPA will consider geographic diversity.
- Are the regional EPA offices going to be involved in the process?
WIFIA is being managed by program staff located in EPA headquarters. All questions should be directed to EPA headquarters staff at firstname.lastname@example.org, and all application materials will be submitted to EPA headquarters. EPA regional staff may assist with the process including coordination with State Revolving Fund programs in their region.
- How is the credit subsidy ratio set?
The credit ratio is calculated on a project-by-project basis at the time of loan obligation. Project A with a higher credit quality would consume less of the credit subsidy than Project B with a lower credit quality, even if the projects are otherwise identical.
- Are territories of the United States and the District of Columbia, or entities within such territories, eligible for WIFIA assistance?
Yes. For purposes of WIFIA, any territory of the United States, and the District of Columbia, are considered states. Therefore, any eligible entity listed in 33 U.S.C. 3904 located in a territory or the District of Columbia may receive WIFIA assistance, including the governments of those territories.
- Are non-profit entities eligible for WIFIA assistance?
Yes. Non-profit entities are typically organized as corporations or partnerships, both of which are defined as eligible entities in 33 U.S.C. 3904.
- Can municipal governments come together and jointly apply?
Yes. Municipal governments can come together under one application with a common security pledge.
- Can a project include both water and wastewater infrastructure?
Yes, it can include both. When including a more than one discrete construction project in a project, all projects should serve a common purpose and have similar construction time frames. Additionally, the loan must be secured by a common security pledge.
- What is green infrastructure?
Green infrastructure includes a wide array of practices at multiple scales that manage wet weather and that maintains and restores natural hydrology by infiltrating, evapotranspiring and harvesting and using stormwater. On a regional scale, green infrastructure is the preservation and restoration of natural landscape features, such as forests, floodplains and wetlands, coupled with policies such as infill and redevelopment that reduce overall imperviousness in a watershed. On the local scale, green infrastructure consists of site- and neighborhood-specific practices, such as bioretention, trees, green roofs, permeable pavements and cisterns.
- Is Design-Bid-Build the only project delivery method that will work?
No, EPA will consider other alternative delivery mechanisms including Design-Build and public-private partnerships.
- The WIFIA loan amount is limited to 49 percent of eligible project costs. Is there a maximum dollar amount for a loan?
No, there is no specific maximum dollar value for each loan. However, EPA is limited in the total amount of credit assistance it can provide through the appropriation in two ways. First, EPA must set aside a portion of its appropriations for each loan to cover anticipated losses. EPA cannot lend more than this appropriated funding will cover. Second, the appropriation includes a maximum total amount of lending that EPA may undertake with the appropriated funding. It is unlikely that a single request for credit assistance would exceed the appropriated controls on EPA’s lending.
- Can projects get both WIFIA and State Revolving Fund (SRF) loans?
Yes. WIFIA could provide up to 49 percent of the financing and the state SRF could provide additional financing for as much as the remaining 51 percent of eligible project costs. EPA will work closely with states to help coordinate joint funding.
- Are State Revolving Fund loans considered federal funding?
It depends. The federal grants that capitalize the State Revolving Funds are considered federal funding. All SRF loans made from these funds are therefore considered to be federal sources of funding. Other SRF funds, such as loan repayments and interest earnings, are not considered federal funding.
- Are SRF loans subject to the 80 percent cap on federal involvement?
An SRF loan made from capitalization grant funds would be subject to the 80 percent limitation on federal funding for a WIFIA project. An SRF loan from other sources would not be considered federal funding and can be used to exceed 80 percent. This means that SRF programs, when using non-federal sources of funding, can provide loans for the non-WIFIA share of 51 percent of eligible project costs.
- Can a WIFIA loan be paired with tax exempt financing?
- Is there a specific maximum project length?
Generally, EPA expects projects to be completed within 7 years of closing. However, there is no specific maximum project length. Disbursement schedules will be negotiated prior to closing of a loan.
- How do you determine the credit of each individual project?
EPA will analyze the credit for each project, similar to the way a bank evaluates credit as part of a loan underwriting. Prospective borrowers are required to provide information in their letter of interest and application about the project’s capital structure, revenue pledge, and major parties for the WIFIA program to evaluate each project’s credit.
- Does WIFIA cover all costs such as project design and feasibility studies?
Costs such as project design, feasibility studies and consulting fees are eligible project costs.
- How is the interest rate for a loan determined?
The interest rate will be equal to or greater than the yield on U.S. Treasury securities of comparable maturity on the date of execution of the credit agreement. The base interest rate can be identified through use of the daily rate tables published by the Bureau of the Fiscal Service for the State and Local Government Series (SLGS) investments, which can be found at Treasury Direct SLGS Daily Rate Table (https://www.treasurydirect.gov/GA-SL/SLGS/selectSLGSDate.htm). The WIFIA program will estimate the yield on comparable Treasury securities by adding one basis point to the SLGS daily rate with a maturity that is closest to the weighted average loan life of the WIFIA credit assistance, measured from first disbursement.
- When will EPA lock in the actual rate for the loan?
The interest is locked at loan closing and the execution of the credit agreement.
- When must loan repayment begin?
Repayment can be deferred up to 5 years. Beyond that, EPA has flexibility to structure repayment to best match the cashflow of the project in question. EPA and prospective borrowers will negotiate the repayment schedule for each project, and it will be included in the credit agreement.
- SRF loans may not be amortized for a period greater than the useful life of the project. Is WIFIA assistance also limited by useful life?
Yes. The final maturity of a WIFIA loan is the shorter of 35 years or the economic useful life of the project.
- The WIFIA statute requires a dedicated pledged revenue source for repayment of credit assistance. How is “dedicated revenue source” defined?
The WIFIA program interprets “dedicated revenue sources” to include such levies as taxes, rate revenue, transfers pledged from state or local governments, dedicated taxes, a municipal general obligation pledge, revenues that are pledged for the purpose of retiring debt on the project, and general recourse corporate undertakings.