SEPA
Funding Decentralized Wastewater Treatment Systems
with the Clean Water State Revolving Fund
The U.S. Environmental Protection Agency's (EPA) Clean
Water State Revolving Fund (CWSRF) is a low interest
source of funding for the installation, repair, and
upgrading of decentralized wastewater treatment
systems. Projects that may be eligible for CWSRF funding
include:
•	New system installation (single and cluster systems).
•	Replacement, upgrade, or modification of
inadequate or failing systems.
•	Costs associated with the establishment of a
centralized management entity (e.g., permitting and
legal fees).
•	Capital associated with management programs (e.g.,
trucks, storage buildings, spare parts)
HOW THE CWSRF WORKS
CWSRF programs in each state and Puerto Rico operate
like banks. Federal and state contributions are used to
capitalize the programs. These assets are used to make
low- or no-interest loans for important water quality
projects. Funds are then repaid to the CWSRFs over
terms as long as 30 years and are recycled to fund other
water quality and public health projects.
WHO MAY QUALIFY
The CWSRF may provide assistance to any public, private
or non-profit entity for decentralized projects. Eligible
loan recipients include community groups, farmers,
homeowners, small businesses, conservation districts,
and nonprofit organizations. Since the program is
managed by the states, project funding and eligibility
requirements vary according to the priorities, policies,
and iaws within each state.
GETTING A PROJECT FUNDED
The EPA encourages states to open their CWSRFs to the
widest variety of eligible water quality and public health
projects. Those interested in implementing or upgrading a
decentralized treatment system should seek out their
CWSRF program to determine whether their state CWSRF
has the legai authority to make loans for decentralized
projects, and participate in the annual process that
determines which projects are funded. The list of CWSRF
state programs can be found on our website at:
www.epa.gov/cwsrf
Here are some questions to ask the CWSRF in your state:
•	Does the state have the legal authority to use its
CWSRF for decentralized systems?
•	Does the state CWSRF enabling legislation provide
the legal authority to provide loans to an individual or
private entity?
•	Has the state committed to funding decentralized
systems in its CWSRF Intended Use Plan (IUP)?
•	If not, what can I do to help get these systems listed
on theIUP?
•	Can an individual or private entity receive a CWSRF
loan for a decentralized system?
•	If not, can I receive a CWSRF loan through a pass-
through entity?
The CWSRF in your state will be able to guide you through
the application process.

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SOURCES OF LOAN REPAYMENT
Potential borrowers must identify a repayment source
before a loan is approved. Though finding a source of
repayment may prove challenging, it does not have to be
burdensome. Many recipients demonstrate a high level
of creativity in developing sources of repayment. The
source of repayment need not come from the project
itself.
Some potential repayment sources include:
•	Property owner's ability to pay (determined during
loan application)
•	Fees paid by developers
•	Recreational fees (fishing licenses, entrance fees)
•	Dedicated portions of local, county, or state taxes or
fees
•	Donations or dues made to nonprofit groups
•	Stormwater management fees
•	Wastewater user charges
CLEAN WATER SUCCESS STORIES
Rhode Island
The Rhode Island Clean Water Finance Agency (CWFA)
successfully developed innovative partnership programs
and lending practices such as the Community Septic
System Loan Program (CSSL.P). To expand its borrower
base, the Rhode Island CWFA crafted CSSLP in
cooperation with the Rhode Island Department of
Environmental Management and Rhode Island Housing.
The CSSLP puts low interest SRF funds within reach of all
communities and allows them to access the SRF to repair
or replace septic systems when necessary. Thus far, the
Rhode Island CWFA has made CSSLP loans totaling $2.95
million. Approximately 400 septic systems have been
repaired or replaced to date, improving water quality in
communities across the state.
A CWSRF-funded decentralized wastewater treatment system in
Lincoln County, West Virginia.
Alabama
The Alabama Department of Environmental
Management made $15 million in financial assistance
available to the South Alabama Utilities using funds
from the Clean Water State Revolving Fund (CWSRF)
loan program. The proposed work is expected to cost
about $1.25 million and will consist of the
construction of decentralized wastewater treatment
systems in three subdivisions: Colleton, Labrador
Run, and Johnson Road. Proper use of decentralized
treatment and disposal is a cost-effective,
environmentally sound option for meeting public
demand for sewer service and avoiding potential
health concerns related to the use of septic tanks.
United States Environmental Protection Agency
Clean Water State Revolving Fund Branch
Office of Water, Office of Wastewater Management
1200 Pennsylvania Avenue , NW (mail code 4204M)
Washington, DC 20460
EPA 832F16006
JUNE 2016
www.epa.gov/cwsrf

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