Drinking Water State Revolving Fund

To provide a low-cost, long-term source of drinking water infrastructure financing, EPA awards capitalization grants to States and Puerto Rico to capitalize their Drinking Water State Revolving Funds (DWSRFs). EPA also awards construction grants to the District of Columbia, U.S. Territories (Virgin Islands, Northern Mariana Islands, American Samoa, and Guam), and Indian Tribes. The funding priority established by the Safe Drinking Water Act (SDWA) is for capitalization grants to each state for infrastructure improvement projects that are needed to address the most serious risk to human health, are necessary to achieve or maintain compliance with SDWA requirements, and assist systems most in need on a per household basis according to State affordability criteria. A state may use a portion of the capitalization grant funds for programs emphasizing contamination prevention through technical assistance, capacity development, operator certification, and source water protection. The program supports the Agency's strategic goal of providing for clean and safe water. The Infrastructure Investment and Jobs Act (IIJA), 2021, (Public Law 117-58), makes available additional capitalization grants to each state and construction grants to the other listed entities for the purpose of providing assistance through the Drinking Water SRF to: (1) activities identified above, (2) activities identified above for projects that address emerging contaminants in drinking water, and (3) activities identified above for projects that identify and replace lead service lines (including related planning and design projects and activities). The capitalization grant is deposited in the State's DWSRF, which is used to provide loans and other types of financial assistance to public water systems as described in Section 1452 of the SDWA. A maximum of four percent of the grant amounts, $400,000 each year, or 1/5 percent per year of the current valuation (total net position) of the fund, whichever is greatest, may be used by the States for the cost of administering the DWSRF. States may discretionally take other “set-asides” for small system technical assistance, state program management, and local assistance as described in Section 1452 of the SDWA. States determine priorities for funding within their State in accordance with the SDWA. For the 51 State DWSRFs, a portion of the capitalization grant funding must be used to provide additional subsidy in the form of grants, principal forgiveness, or negative interest loans.

States (includes District of Columbia), U.S. Territories or Possessions (the Commonwealth of Puerto Rico, Virgin Islands, Mariana Islands American Samoa, and Guam), and Federally Recognized Indian Tribal Governments are eligible for grants from the program. The Consolidated Appropriations Act, 2023, Public Law 117-328, provides two sets of additional funding. Division N of the Act appropriates $450 million in disaster supplemental funding for the DWSRF, available only to states or territories in EPA Region 4 in areas where the President declared an emergency in August of fiscal year 2022 pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. §§ 5121 et seq.). The President’s emergency declaration dated August 30, 2022, applies to Hinds County, Mississippi, but was necessitated by the water crisis impacting the City of Jackson’s public water systems. Therefore, the City of Jackson’s public water systems (PWS ID No. MS0250008 and PWS ID No. MS0250012) are the nation’s only public water systems eligible for these funds. Division N of the Act also includes $402 million in supplemental funding for the DWSRF, available only to states or territories in EPA Regions 2 and 4 for drinking water facilities impacted by Hurricanes Fiona or Ian. Only the State of Florida and the Commonwealth of Puerto Rico are eligible to apply for these DWSRF supplemental funds. Two percent of the appropriated funds are reserved for direct grants or interagency agreements to benefit Tribes. The American Relief Act, 2025, Public Law 118-158, provides funding in Title VII of the Act in the amount of $1.77 billion for the DWSRF programs, available only to states or territories in EPA Regions 3, 4, and 9 for wastewater treatment works and drinking water facilities impacted by Hurricanes Helene and Milton and the Hawai’i wildfires. Only the States of Florida, Georgia, Hawai’i, North Carolina, South Carolina, Tennessee, and Virginia are eligible to apply for these DWSRF supplemental funds.

States, U.S. Territories or Possessions (the Commonwealth of Puerto Rico, Virgin Islands, Mariana Islands American Samoa, and Guam), Federally Recognized Indian Tribal Governments, local, and intrastate.

A grant application is reviewed by the appropriate Regional Office, and if approved, the grant is awarded by the Regional Administrator under a delegation of authority from the Administrator of EPA. EPA Headquarters retains the authority to review certain applications or parts thereof.

Approval time averages 45 days.