Getting State Revolving Fund Financial Assistance

A detailed overview of the State Revolving Fund (SRF) application process.

Applying for SRF Financial Assistance

Each May, the Massachusetts Department of Environmental Protection (MassDEP) launches the annual SRF project solicitation for new Clean Water and Drinking Water infrastructure construction projects, and Asset Management Planning Grants, for the next calendar year’s financing. The applications, called Project Evaluation Forms (PEF), along with supporting documentation, are due by the end of July per the solicitation notice.  All applications must be submitted in the eSRF portal. 

Rolling Applications

While funding is available, MassDEP accepts applications on a rolling basis for Lead Service Line Planning Loans, Lead Service Line Replacement Construction Projects, Clean Water and Drinking Water Planning Projects, Sewer Overflow and Stormwater Reuse Municipal Grants (OSG) Planning, and the Community Septic Management Program via the eSRF portal. A PEF is not required to apply for these loans/grants, instead a loan/grant application and the scope of work must be submitted.

Eligible Applicants

• Municipally owned wastewater systems
• Public drinking water suppliers

Tier Ranking Criteria

The information provided in the PEF allows MassDEP to evaluate and rank projects based upon the severity of the public health or environmental problem that is being addressed and the effectiveness of the proposed solution.

Clean Water Construction Project Ranking System

Drinking Water Construction Project Ranking System

While some project proponents submit PEFs themselves, most engage environmental consulting companies familiar with the condition of the local infrastructure and the SRF financing process.

The projects recommended to receive SRF financial assistance are published in the Draft Intended Use Plan (IUP), typically in December. The IUP lists the applicant, project name, and cost. Following a 30-day public comment period and public hearing, testimony is considered and subsequently incorporated as appropriate to finalize the IUP. The Final IUP is published on MassDEP’s website. As dictated by Congress, only projects listed on an IUP may receive SRF financial assistance. 

Readiness to Proceed

Readiness to proceed is an important criterion for SRF financial assistance. Borrowers must secure local borrowing authorization of the total cost of the project by June 30th of the IUP year, and submit a project financial assistance application with buildable plans and specifications by mid-October of the same year. Once approved and SRF financial assistance commitments are made, the borrower has 6 months to initiate the project. Proposals that do not meet these deadlines may be removed from the IUP and replaced by a lower ranked project which is ready to proceed.

SRF Administration

MassDEP administers the SRF program in partnership with the Massachusetts Clean Water Trust (Trust). The role of MassDEP is to oversee project development and implementation, while the Trust oversees the financial aspects.  

Annual IUP Borrower Presentation

Each year, the Trust and MassDEP give a presentation to borrowers on State Revolving Fund financing. During the meeting, borrowers learn about the SRF administrative processes and have an opportunity to ask the agencies questions.  MassDEP and the Trust recommend borrowers attend the meeting. To view the most recent presentation, visit the Annual IUP Borrower Presentation page. 

Financial Application Review Process

MassDEP engineers review project financial assistance applications to ensure the applicant has developed a suitable project plan to address the problem described in the PEF.  

Construction Projects:

• Design plans and specifications, environmental or building permits, and federal program requirements, must be satisfied for the project to receive SRF project financial assistance. 
• The Trust subsequently executes interim financing agreements and later the permanent loan documents, then works with the borrowers through the following years to ensure timely repayment and management of accounts.

Non-Construction Projects:

• The scope of the project and applicable program requirements must be satisfied for the project to receive SRF financial assistance.
• MassDEP then certifies the completed application to the Trust, initiating the formal financing offer, and setting the construction project bidding process in motion or notice to proceed for non-construction projects.
• The Trust executes the appropriate financing/grant agreements.

Bidding and Construction

SRF financed projects are owned and managed by the Borrowers. MassDEP’s oversight role is to ensure that the project is eligible for SRF financing to the maximum extent possible within the SRF requirements. The assigned MassDEP engineer reviews project bid documents before they are published, and then informs the borrower that the bid language conforms to the SRF requirements. If there are ineligible costs in the bid, MassDEP informs the borrower before the local bid is advertised.

Once the borrower receives responsive bids and one is chosen, a copy of the executed construction contract is submitted to MassDEP. The amount of the construction services contract, certain administrative costs, and a 5% contingency are combined as the basis for the loan amount. MassDEP develops a project regulatory agreement (PRA), committing to the loan amount, the rate, and the term.  The PRA further details the responsibilities of MassDEP and borrower to oversee the project during construction, through to completion. The PRA is included in the loan agreement.

Interim Financing

The Trust has interim financing available for borrowers.  The Trust charges an interest rate of 0% on the interim loans, saving the borrowers the interest costs associated with Bond Anticipation Notes. The proceeds of the interim loan are available to the borrower to pay its consultants and contractors in a timely manner.  MassDEP and the Trust work expeditiously to process the payment requisitions for the interim financing.

Permanent Financing and Repayment

Approximately once per year, the Trust converts outstanding interim loans into permanent loans for projects at or near completion. The Trust notifies all interim borrowers of the conversion and works with borrowers to formulate the loan repayment schedule and terms. The Trust sends debt service schedules to borrowers with outstanding obligations.  The schedule includes semi-annual payments (January and July), for each year the loan is outstanding.

• For more information on loan repayment schedules and loan terms, please visit the Trust’s Borrower Resources and Documents page.
• To view a debt service schedule, please visit the Trust's Loan Repayment Schedules page.

Disadvantaged Community Loan Forgiveness

The Trust provides loan forgiveness each year to “Disadvantaged Communities” based on an annual affordability calculation that ranks communities into affordability tiers. The Trust provides a fixed percentage of loan forgiveness based on the affordability tiers and the specific State Revolving Fund program, reducing the principal amount of the loan. The Disadvantaged Community Program