Revolving Funds for Financing Water and Wastewater Projects (United States)

Deadline: 03-Jul-2026

The U.S. Department of Agriculture’s Rural Utilities Service (RUS) is accepting applications for the Revolving Funds for Financing Water and Wastewater Projects Grant Program. The initiative helps eligible nonprofit organizations establish revolving loan funds that support predevelopment expenses, small capital improvements, operational efficiencies, water reuse projects, and resilience upgrades for rural water and wastewater systems across the United States.

Program Overview

The Revolving Funds for Financing Water and Wastewater Projects Grant Program is designed to improve access to safe, reliable, and sustainable water and wastewater infrastructure in rural communities throughout the United States.

Administered by the Rural Utilities Service (RUS) under the U.S. Department of Agriculture (USDA), the program provides grant funding to qualified nonprofit organizations that establish revolving loan funds. These funds are then used to provide loans to eligible rural water and wastewater projects.

The program addresses financing gaps that often prevent rural communities from planning, developing, or upgrading critical water and wastewater infrastructure.

Program Objectives

The program aims to:

• Support rural water infrastructure development.
• Improve wastewater management systems.
• Finance project predevelopment activities.
• Fund small-scale capital improvement projects.
• Increase operational efficiency of utility systems.
• Enhance system resilience and reliability.
• Promote water reuse and conservation technologies.
• Strengthen long-term sustainability of rural utilities.

Funding Details

• Program Name: Revolving Funds for Financing Water and Wastewater Projects Grant Program
• Administering Agency: USDA Rural Utilities Service (RUS)
• Fiscal Year: 2026
• Total Available Funding: Approximately $1 million
• Funding Type: Competitive Grant
• Performance Period: October 1, 2026 – September 30, 2027
• Eligible Applicant Type: Private nonprofit organizations

Awards are made through a competitive review process based on program regulations and evaluation criteria.

What Is a Revolving Loan Fund?

A revolving loan fund is a financing mechanism that provides loans to eligible projects and reinvests loan repayments into future projects.

As borrowers repay their loans, the funds become available for new lending opportunities, creating a sustainable source of financing for rural infrastructure development.

This approach helps maximize the long-term impact of federal funding while supporting multiple projects over time.

Eligible Uses of Funding

Grant recipients may use revolving loan funds to support projects involving:

Predevelopment Costs

Funding may be used for expenses incurred before construction or implementation begins.

Examples include:

• Engineering studies
• Feasibility assessments
• Environmental reviews
• Preliminary design work
• Project planning activities
• Technical evaluations

Small Capital Projects

The program supports short-term infrastructure improvements that are not considered routine operation or maintenance activities.

Examples may include:

• Equipment upgrades
• System modernization
• Minor infrastructure improvements
• Efficiency-enhancing investments
• Technology upgrades

Operational Efficiency Improvements

Projects that improve the efficiency and effectiveness of water and wastewater systems are encouraged.

Potential activities include:

• Energy efficiency improvements
• Process optimization
• System management upgrades
• Technology integration

Resilience and System Hardening

The program supports activities that improve the ability of water systems to withstand disruptions.

Examples include:

• Infrastructure hardening
• Disaster preparedness improvements
• Climate resilience measures
• Emergency response capabilities
• Risk mitigation investments

Water Reuse Technologies

Funding may support technologies that improve water conservation and sustainable resource management.

Potential examples include:

• Water recycling systems
• Water reuse infrastructure
• Conservation-focused technologies
• Sustainable water management solutions

Loan Terms for End Borrowers

Organizations receiving assistance through revolving loan funds must comply with program financing requirements.

Key loan conditions include:

• Maximum loan amount: $200,000
• Alternative limit: Up to 75% of total project costs, whichever amount is lower
• Maximum repayment period: 10 years
• Interest rate: Determined by the grant recipient and approved by RUS

These terms are intended to provide affordable financing for rural infrastructure improvements.

Who Is Eligible?

Eligible applicants include qualified private nonprofit organizations that meet all program requirements.

Applicants must:

• Be a legally eligible nonprofit organization.
• Demonstrate the ability to administer a revolving loan fund.
• Meet all federal eligibility requirements.
• Comply with program regulations and reporting requirements.
• Provide the required cost share contribution.

Organizations should have sufficient financial and administrative capacity to manage loan programs and monitor funded projects.

Cost Share Requirement

Applicants must provide a cost share equal to 20% of the project cost.

Important requirements include:

• A minimum 20% matching contribution is required.
• Matching funds must meet federal eligibility standards.
• In-kind contributions are not permitted.
• Applicants must demonstrate the availability of matching funds during the application process.

Failure to meet the cost share requirement may result in ineligibility.

How the Program Works

Step 1: Apply for Grant Funding

Eligible nonprofit organizations submit applications to establish or operate a revolving loan fund.

Step 2: Grant Review and Selection

Applications are evaluated based on program priorities, organizational capacity, project design, and compliance with program requirements.

Step 3: Grant Agreement Execution

Selected applicants enter into a formal grant agreement with the Rural Utilities Service.

Step 4: Establish Revolving Loan Fund

Grant recipients create and manage a revolving loan fund that provides financing to eligible rural water and wastewater projects.

Step 5: Issue Loans

Loans are provided to eligible borrowers for approved activities such as planning, system improvements, and infrastructure upgrades.

Step 6: Loan Repayment

Borrowers repay their loans according to approved repayment schedules.

Step 7: Reinvestment of Funds

Loan repayments are returned to the revolving fund and used to support future eligible projects.

Why This Program Matters

Many rural communities face challenges in financing critical water and wastewater infrastructure improvements.

This program helps address those challenges by:

• Expanding access to affordable financing.
• Improving public health outcomes.
• Supporting reliable water services.
• Enhancing wastewater treatment capacity.
• Increasing infrastructure resilience.
• Promoting environmental sustainability.
• Encouraging efficient water management.
• Strengthening rural economic development.

By supporting revolving loan funds, the program creates a sustainable financing mechanism that benefits rural communities over the long term.

Priority Areas

Projects that align with the following priorities may be particularly competitive:

• Rural water system improvements
• Wastewater infrastructure modernization
• Climate resilience initiatives
• Water reuse technologies
• Infrastructure efficiency improvements
• System reliability enhancements
• Sustainable utility management
• Community infrastructure development

Tips for a Strong Application

• Demonstrate strong experience managing financial assistance programs.
• Present a clear revolving loan fund strategy.
• Show how the fund will benefit rural communities.
• Explain procedures for loan management and oversight.
• Provide evidence of organizational capacity.
• Secure eligible matching funds before applying.
• Develop realistic implementation plans.
• Highlight long-term sustainability and impact.

Common Mistakes to Avoid

• Failing to meet nonprofit eligibility requirements.
• Providing incomplete documentation.
• Neglecting matching fund requirements.
• Including in-kind contributions as cost share.
• Presenting weak loan management procedures.
• Submitting unclear implementation plans.
• Underestimating administrative responsibilities.
• Failing to demonstrate rural impact.

Frequently Asked Questions (FAQs)

What is the Revolving Funds for Financing Water and Wastewater Projects Grant Program?

It is a USDA Rural Utilities Service grant program that supports nonprofit organizations in establishing revolving loan funds for rural water and wastewater infrastructure projects.

Who can apply?

Eligible private nonprofit organizations that meet federal and program-specific requirements may apply.

How much funding is available?

Approximately $1 million is available for Fiscal Year 2026 through a competitive grant process.

What can revolving loan funds finance?

Funds may support predevelopment expenses, small capital projects, operational efficiency improvements, resilience measures, and water reuse technologies.

What is the maximum loan amount available to borrowers?

Loans may not exceed $200,000 or 75% of total project costs, whichever is less.

Is matching funding required?

Yes. Applicants must provide a 20% cost share contribution. In-kind contributions are not accepted.

How long can borrowers take to repay loans?

Loans must generally be repaid within a period not exceeding 10 years.

Conclusion

The Revolving Funds for Financing Water and Wastewater Projects Grant Program provides an important financing tool for improving rural water and wastewater infrastructure across the United States. By supporting nonprofit organizations that administer revolving loan funds, the program helps communities access affordable financing for planning, modernization, resilience improvements, and sustainable water management initiatives. With a focus on long-term infrastructure sustainability, operational efficiency, and public health, the program plays a vital role in strengthening rural utility systems and supporting community development.

For more information, visit Grants.gov.