Optimizing Interest Rate and Other Loan Policies for SRF Financing

waterresources
Written By Danielle Goshen

By Danielle Goshen, Jake Adams, and Janet Pritchard 

The State Revolving Fund (SRF) programs play a pivotal role in financing essential water infrastructure projects across the United States. These programs, bolstered by the recent infusion of funds from the Infrastructure Investment and Jobs Act (IIJA), offer a combination of funding and financing options to support a wide range of projects. The balance between grants and loans, along with the structure and terms of these loans, is crucial to ensuring the sustainability and accessibility of the SRFs.

This brief explores policy options, analyzes trends across the states, and highlights policies and practices that states should consider when determining interest rate and other loan policies. Key recommendations include:

  • Interest Rate Policies

    • Evaluate Fixed vs. Market-Based Rates

    • Adopt Tiered or Formula-Based Rate Structures

  • Loan Term Policies

    • Customize Loan Terms

    • Offer Shorter Loan Terms for Planning Loans

  • Loan Fee Policies

    • Assess the Impact of Fees

    • Consider Flexible, Variable Fees

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Danielle Goshen

Danielle is the Senior Water Infrastructure Policy Analyst at EPIC. Prior to joining EPIC in 2024, Danielle worked on National Wildlife Federation's Texas Coast and Water Program as their Policy Specialist/Counsel where she collaborated with government, industry, and NGO stakeholders to improve water policy across Texas. Prior to her work at NWF, Danielle was the Water Policy Specialist at Galveston Bay Foundation. She attended the University of Toronto for her Honours Bachelor's degrees in Environmental Geography and Environmental Studies, with a minor in Geographic Information Studies. Danielle later earned her J.D. at the University of Georgia School of Law, where she was president of the Environmental Law Association. During her time at Georgia Law, Danielle interned at the Environmental Protection Agency’s Region 4 office and served as a Georgia Sea Grant Legal Fellow working on coastal resiliency policy.

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