What Is WIFIA? Eligibility, Loan Terms, and Fees

The WIFIA loan program is a federal credit facility run by the Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act, 33 U.S.C. §§ 3901–3915. It offers long-term, low-interest loans that can cover up to 49 percent of the eligible costs of a large water infrastructure project, with interest fixed at closing to the U.S. Treasury rate for a comparable maturity.¹ Loans are awarded through a two-stage process that starts with a Letter of Interest and, if EPA invites you forward, moves to a full application and credit negotiation.

Who Can Borrow

The statute reaches a broad set of applicants. Under 33 U.S.C. § 3904, eligible borrowers include federal, state, and local government entities (water districts and special utility districts among them), individual tribal governments or consortia of tribes, private corporations, partnerships, joint ventures, and trusts, and state infrastructure financing authorities that run Clean Water or Drinking Water State Revolving Fund programs.

Private-sector applicants carry an extra requirement. Under 33 U.S.C. § 3907(a)(4), a project carried out by an entity that is not a government or tribal body must be “publicly sponsored,” meaning the borrower has to show that a public authority supports the project and that it serves a community interest rather than a purely private one.²

State infrastructure financing authorities have their own dedicated track called SWIFIA, authorized by the America’s Water Infrastructure Act of 2018. SWIFIA loans are structured exclusively for state revolving fund lending, with a minimum project size of $20 million and a final maturity of up to 35 years measured from the date of first disbursement rather than from substantial completion.³

What Projects Qualify

Under 33 U.S.C. § 3905, WIFIA finances a wide range of water-related work:

Drinking water treatment plants, distribution networks, and community water system improvements
Wastewater collection systems, treatment works, and sewage processing upgrades
Stormwater management, including projects that reduce combined sewer overflows
Brackish or seawater desalination, managed aquifer recharge, and water recycling
Drought resilience and watershed improvements
Energy efficiency upgrades at public water systems or publicly owned treatment works
Repair and rehabilitation of aging distribution or collection infrastructure, including facilities serving tribal communities
Flood damage reduction, environmental restoration, and harbor or waterway navigation projects, which are overseen by the Army Corps of Engineers rather than EPA

Borrowers can bundle multiple eligible projects into a single loan request.⁴

Most projects must have reasonably anticipated eligible costs of at least $20 million. Communities with a population of 25,000 or fewer qualify under a reduced threshold of $5 million, which is meant to keep the program accessible to smaller utilities.⁵

Loan Terms

The interest rate is fixed at closing. The statute requires it be “not less than” the Treasury yield for securities of similar maturity, and in practice EPA calculates the rate using the weighted average life of the loan rather than the final maturity date.⁶ Because weighted average life is shorter than the full term, the rate is typically lower than a maturity-date calculation would produce, which compounds into meaningful savings across a multi-decade repayment schedule.

A WIFIA loan matures no later than 35 years after the project reaches substantial completion, or at the end of the project’s useful life, whichever comes first. Borrowers can defer principal and interest payments for up to five years after substantial completion, which bridges the gap between finishing construction and generating enough revenue to begin servicing the debt.⁷

A WIFIA loan can cover up to 49 percent of a project’s eligible costs, and total federal assistance from all sources combined cannot exceed 80 percent. A project stacking WIFIA with other federal grants has to plan for both ceilings.¹ The remainder has to come from local equity, state grants, private financing, or other non-federal sources.

How to Apply

Each fiscal year, EPA publishes a Notice of Funding Availability in the Federal Register soliciting Letters of Interest.⁸ The Letter of Interest describes the borrower and the proposed project, provides key financial and engineering data, and explains how the project meets WIFIA’s selection criteria. Putting together a strong Letter of Interest takes detailed cost estimates, construction timelines, projected revenue streams, and a preliminary financial plan showing how the loan will be repaid over decades.

If the Letter of Interest passes EPA’s initial screening, the agency issues a formal Invitation to Apply. From that point, borrowers generally have up to 365 days to submit a complete application, though EPA can extend the deadline case by case. The full application triggers a comprehensive credit review, during which EPA staff and outside financial, legal, and technical advisors evaluate the borrower’s long-term revenue streams and debt service coverage ratios. Expect multiple rounds of follow-up questions during this period. Legal teams and financial advisors then negotiate the credit agreement terms before closing. Total time from Letter of Interest to closing varies with project complexity and how quickly the borrower can respond to EPA’s information requests.

Application and Closing Fees

The application fee is due when the full application is submitted, not at the Letter of Interest stage. For projects serving communities of 25,000 or fewer, the fee is $25,000. For all other projects, it is $100,000. The application fee is credited toward the second fee category.⁹

The credit processing fee is due at closing and covers EPA’s cost of retaining outside financial, engineering, and legal experts to underwrite the loan. This amount is not fixed; EPA calculates it case by case based on the deal’s complexity. EPA may waive all or part of the credit processing fee if Congress appropriates funds beyond what is needed to cover internal administrative costs.⁹

How EPA Chooses Among Eligible Projects

Meeting the eligibility requirements does not guarantee funding. EPA evaluates each application against selection criteria in 33 U.S.C. § 3907, and the dominant filter is creditworthiness. EPA examines the financial structure of the proposed deal, the dedicated revenue sources backing repayment, the borrower’s credit history, and the financial assumptions underlying the project.

Every applicant must provide a preliminary rating opinion letter from at least one credit rating agency at the time of application, indicating that the project’s senior debt obligations have the potential to achieve an investment-grade rating. Before the loan closes, a final rating opinion letter confirming an actual investment-grade rating is required.²

EPA also weighs regional or national significance, the extent to which the project leverages non-federal funding, and readiness to proceed to construction. Projects with strong community benefit and sound engineering tend to score highest.

Federal Strings Attached

A WIFIA loan carries significant federal compliance obligations. The borrower is responsible for compliance across the whole project, including work by contractors, subcontractors, suppliers, and manufacturers.

Environmental Review

Every WIFIA project must go through a review under the National Environmental Policy Act. EPA will not finalize a loan until it issues either a Categorical Exclusion, a Finding of No Significant Impact (under the program’s Programmatic Environmental Assessment or a project-specific Environmental Assessment), or a full Environmental Impact Statement, depending on the project’s scope and potential effects. NEPA review can be one of the most time-consuming parts of the process.¹⁰

Prevailing Wage and Labor Standards

All prime construction contracts above $2,000 must include Davis-Bacon prevailing wage language, and the prime contractor must flow those requirements down to every subcontract. Workers must be paid at least the locally prevailing wages set by the Department of Labor. For contracts above $100,000, the Contract Work Hours and Safety Standards Act also applies, requiring overtime pay for work beyond 40 hours per week. Borrowers must keep certified payrolls, personnel interview records, and apprenticeship documentation for at least three years after project completion.¹⁰

Domestic Content

Two overlapping procurement rules apply. The American Iron and Steel requirement under 33 U.S.C. § 3914 requires that iron and steel products permanently incorporated into the project (pipes, valves, hydrants, tanks, structural steel, and similar items) be produced in the United States if those products are more than 50 percent iron or steel by material cost. EPA can grant waivers when domestic products are unavailable, when using them would increase costs by 25 percent or more, or when the requirement conflicts with the public interest. A de minimis exception covers items under 1 percent of unit cost and under 5 percent of total material costs.¹⁰

The Build America, Buy America Act adds broader requirements covering manufactured products (at least 55 percent domestic component cost) and construction materials like lumber, glass, drywall, and plastics. Cement, aggregates, and binding agents are specifically excluded from the construction materials category. Review the WIFIA Specifications Packet early in the procurement process, since some contract language must be included verbatim.¹⁰

1
U.S. Environmental Protection Agency. What is WIFIA?
2
Office of the Law Revision Counsel. 33 USC 3907 – Determination of Eligibility and Project Selection
3
U.S. Environmental Protection Agency. WIFIA State Revolving Fund Borrowers
4
Office of the Law Revision Counsel. 33 USC 3905 – Projects Eligible for Assistance
5
eCFR. 40 CFR Part 35 Subpart Q – Credit Assistance for Water Infrastructure Projects
6
Office of the Law Revision Counsel. 33 USC 3908 – Secured Loans
7
Environmental Protection Agency. WIFIA Program Handbook
8
Federal Register. Notice of Funding Availability for Credit Assistance Under the Water Infrastructure Finance and Innovation Act
9
eCFR. 40 CFR 35.10080 – Fees
10
U.S. Environmental Protection Agency. WIFIA Federal Requirements