Drinking Water State Revolving Loan Fund (DWSRF)

The Nebraska Drinking Water State Revolving Loan Fund (DWSRF) is a state-administered financing program designed to support public water systems in Nebraska through low-interest loans and loan forgiveness. This program is implemented by the Nebraska Department of Water, Energy, and Environment (DWEE) in conjunction with the Nebraska Investment Finance Authority (NIFA), authorized under the 1996 Amendments to the Federal Safe Drinking Water Act. Through annual capitalization grants provided by the U.S. Environmental Protection Agency, Nebraska has built a self-sustaining revolving loan fund to facilitate construction, planning, and design of water infrastructure projects that protect public health and ensure compliance with drinking water standards. The core objective of the Nebraska DWSRF is to provide financial assistance to public water supply systems for eligible projects. These include construction of drinking water treatment and distribution infrastructure, source water protection through land acquisition from willing sellers, and the planning and engineering design of proposed improvements. The fund operates as a revolving mechanism where loan repayments replenish the fund, allowing continued lending for future projects. Interest earned on the fund is used both to cover bond obligations and to support new loan issuances. Loan forgiveness and additional interest rate reductions may be offered for economically disadvantaged communities and for early repayment. To apply, public water systems must ensure that their project appears on the annual Intended Use Plan (IUP) priority list, which is developed based on a biennial survey conducted by the state. Applicants must hire a professional engineer registered in Nebraska to develop a detailed engineering report. This report must demonstrate a thorough review of current conditions, environmental impacts, design alternatives, and selection of the most cost-effective option. In addition, applicants must conduct an environmental review and public hearing, unless exempted, and provide a dedicated revenue source for loan repayment. Loan terms typically extend up to 20 years, though communities that meet the criteria for economic hardship may qualify for up to 30-year terms. To initiate the process, communities are encouraged to submit a joint pre-application for both state and federal aid. This is facilitated by contacting the DWEE's Financial Assistance Section directly. The pre-application process begins with completing the Combined Clean Water and Drinking Water SRF Needs Survey, which is issued every fall and must be returned by December 31. The survey data is used by the state to update its Intended Use Plan. After submission, applicants must coordinate with DWEE staff to evaluate financing options and potential leveraging with other state, federal, or local funding sources. Loan eligibility under the program is limited to publicly owned drinking water systems within Nebraska. There is no indication of private or nonprofit entities being eligible applicants. The program also prioritizes community engagement and support, recommending that applicants engage stakeholders to explain project benefits and secure public backing. Additionally, a user fee system must be implemented to ensure that operation, maintenance, and debt service costs are covered sustainably. Interested applicants can reach the DWEE Financial Assistance Section by calling 402-471-4200 or emailing ndee.srf@nebraska.gov. Other useful contacts include the Nebraska Department of Economic Development, USDA Rural Development’s Community Programs, the EPA Region VII Small Community Outreach Coordinators, and the National Small Flows Clearinghouse. The DWEE office is located at 245 Fallbrook Blvd., Suite 100, Lincoln, NE 68521. The application window is open and ongoing, subject to project placement in the IUP and compliance with planning and environmental review milestones.