Drinking Water Revolving Fund Loans

Purpose:  The Drinking Water Revolving Fund provides low-interest loans to water suppliers to finance the construction (including upgrades/expansions) of public drinking water systems.

Goals of the Program:  To assist water suppliers in providing safe/high quality drinking water.

Eligibility:  Any water supplier who owns and operates a community or non-community (if operated as a non-profit entity) water supply.

Criteria:  The requirements for this program are identified in Part 54, Act 451 of the Public Acts of 1994, as amended. Certain federal requirements may also apply and are spelled out in Title XIV of the Public Health Services Act (commonly referred to as the Safe Drinking Water Act). Primarily, applicants must present environmentally sound water supply projects which are drawn from a Project Priority List (PPL) administered by the Office of Drinking Water and Municipal Assistance.

Application Process:

  • The water supplier is first ranked on the project priority list by submitting a project plan to the Department of Environment, Great Lakes, and Energy (EGLE).
  • The water supplier is included in the annual fundable range according to priority ranking and the level of fund lending capacity.
  • The water supplier submits plans and specifications for EGLE review.
  • The water supplier submits an application for assistance in accordance with the quarterly funding schedule.
  • The water supplier receives financial assistance upon satisfying program requirements through the application process.

Nominating Procedures:  After submitting a project plan and the project is ranked on the PPL, projects in the fundable range are notified.  A schedule is then developed that will lead to completion of the environmental review, submission of an application, award of an Order of Approval, and closure of the loan.

Deadlines:  The deadline for submission of a project plan to be included on the annual PPL is May 1.  The deadline for the application for financial assistance is negotiated for each project dependent upon which quarter they will receive a binding commitment.

Timelines:  The time period may run approximately eight months to several years from the time the project plan is submitted to receipt of assistance. From the time of actual application to receipt of assistance, the process may take as little as three months. Much is dependent upon available funds and the quality of municipal submissions.

Dollar Amount(s) Available (Min or Max):  Dependent on federal grant amount.

Required Match:  No local match is required.

Source(s) of Funds:  The fund is capitalized with federal grant funds and a required 20% state match.

Authority:  Part 54, Act 451 of the Public Acts of 1994 and Title XIV of the Public Health Service Act (commonly referred to as the Safe Drinking Water Act).

Responsible Division/Office Contact:  Finance Division, Water Infrastructure Financing Section, Karol Patton, Acting Supervisor, 517-284-5433.

Phase-out/Expansion/Changes for Next Fiscal Year:  Since the fund "revolves" it is intended to operate in perpetuity. Annual lending capacity will remain even if new federal/state capitalization ceases.

Related Programs:   None.

Request for Proposals:  Municipalities can apply at any time by submitting a project plan.