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 distressed communities located in eligible rural areas where the primary purpose of the loan is to upgrade existing facilities or construct new facilities required to meet applicable health or sanitary standards.
Who may apply for this program?
- Most state and local governmental entities
- Private nonprofits
- Federally recognized tribes
Are there additional eligibility requirements?
- Meet the general eligibility requirements of 7 CFR 1780.7 Eligibility
- Meet requirements of regular poverty rate loan program under 7 CFR 1780.13 Rates and terms
- Serve a Distressed Community. A Distressed Community is determined by the Agency by using the Economic Innovation Group’s Distressed Communities Index (which is incorporated into the USDA look-up map), which uses several socio-economic measures to identify communities with low economic well- being. To determine if your Project is located in a Distressed Community, please use the following USDA mapping tool:
Distressed Community Index (DCI) Location Map (arcgis.com)
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
- A Distressed Community is determined by the Agency by using the Economic Innovation Group’s Distressed Communities Index (which is incorporated into the USDA look-up map), which uses several socio-economic measures to identify communities with low economic well- being. To determine if your Project is located in a Distressed Community, please use the following USDA mapping tool:
Distressed Community Index (DCI) Location Map (arcgis.com)
How may funds be used?
The Water and Waste Disposal Grant Program 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; and storm water collection, transmission, and discharge. Irrigation is not an eligible project use. Eligible loan uses are described in 7 CFR Part 1780.9 - Eligible loan and grant purposes.
What kind of funding is available?
- Loan
What are the loan terms?
- Up to 40-year payback period, based on the useful life of the facilities financed
- One percent interest rate.
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
- Program resources are available online (i.e., forms, guidance, certifications, etc.).
Who can answer questions?
- Contact the local representative who serves your area. A list of state offices is available at this link: Browse by State | Rural Development (usda.gov).
- 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
- Consolidated Appropriations Act, 2024, Public Law 118-42,
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: Program details may change over time. Before you begin an application, please confirm you have the most current information by contacting a program specialist in your local RD office for assistance or consult the program instructions listed in the section above titled "What Governs this Program?"
Contact the local Rural Development office serving your area.