Drinking Water State Revolving Loan Fund

Drinking Water State Revolving Loan Fund (“DWSRLF”) is operated in partnership with the New Mexico Environment Department (“NMED”) to provide low-cost financing for the construction of and improvements to drinking water facilities throughout New Mexico in order to protect drinking water quality and the public health.

This federally funded program, managed by the NMFA on behalf of the State of New Mexico, is funded through a federal capitalization grant of approximately $8 million annually. The State is required to match the federal grant by 20 percent. The primary use of the funding is for zero or two-percent loans to drinking water systems to fund vital water quality projects.

There are three priorities of the program:

  • protection of public health;
  • compliance with drinking water standards; and
  • affordable access to drinking water.

To ensure the success of the program, NMFA and NMED partner to provide technical, managerial and financial assistance to water systems as well as low-cost loans.

The DWSRLF provides long term loans at below market interest rates.

  • Publicly-Owned Water System—Disadvantaged 0%*
  • Publicly-Owned Water System—Non-disadvantaged 1%
  • Privately-Owned Water System—Non-profit 3%
  • Privately-Owned Water System—For-profit 4%

* Disadvantaged funding is limited to the first $1,000,000 of total project financing. Disadvantaged is defined as:

  • Disadvantaged Entities – to be considered a Disadvantaged entity, the applicant’s MHI must be greater than 80% but less than 100% of the State’s MHI, based on the most recent 5-year average of MHI from census data or through a survey acceptable to NMFA.
  • Severely Disadvantaged Entities – to be considered a Severely Disadvantaged entity, the applicant’s MHI must be 80% or less of the State’s MHI, based on the most recent 5-year average of MHI from census data or through a survey acceptable to NMFA.
  • Applications for Regionalization – projects may use the MHI of the community proposed for incorporation into the applicant’s water system service area for purposes of determining Disadvantaged entity status. These applications will be limited in scope to project elements related to the provision of water to the Regionalized Community and all assets funded by the loan must be owned and maintained by the borrower.

Median Household Income date can be found at: 2017 MHI Numbers


Community water systems and non-profit non-community water systems are eligible to apply for DWSRLF funding. Projects that protect drinking water quality and public health are eligible for the DWSRLF, including:

  • New and replacement water sources
  • Treatment
  • Transmission and distribution lines
  • Storage
  • Supervisory Control and Data Acquisition (SCADA) systems
  • Infrastructure to interconnect or regionalize water systems

In addition to funding costs needed for project construction, the DWSRLF can also finance planning, design and associated pre-project costs, and land acquisition needed for locating project components.

Current Comprehensive and Fundable Priority List

DWSRLF Comprehensive and Fundable Priority Lists identify projects that are expected to receive DWSRLF funding in the future. They are prepared quarterly.

Water systems on the Fundable Priority List have met three criterias:

  • capacity to maintain compliance with federal and state drinking water regulations;
  • readiness to proceed with the project in a reasonable timeframe;
  • financial ability to take on debt and repay the loan, and are eligible to submit a DWSRLF application.

SFY 21 Annual Fundable and Comprehensive Priority List

EPA Grant and Intended Use Plan

The NMFA is the state’s recipient of federal Environmental Protection Agency (EPA) Capitalization Grants awarded under the Safe Drinking Water Act (SDWA). The SDWA partners with the NMFA and NMED to carry out the provisions of the program.

The Intended Use Plan is required by the SDWA in order to receive each Capitalization Grant, pursuant to 40 CFR 35.3555. The amount of the Capitalization Grant allotted to the State is determined by Congress and administered by the EPA. The Intended Use Plan contains information about the short and long-term goals, subsidy and green project reserves, principal forgiveness, and other programmatic topics funded by the Capitalization Grant.

SFY 21 Intended Use Plan

New Mexico State Environmental Review Process (SERP)

The applicant’s preparation of the environmental information required as part of the State Environmental Review Process (SERP) and the Chief Executive Officer of the NMFA review and issuance of a determination forms an integral part of the planning process required of any potential applicant to the DWSRLF. (In 1997, the New Mexico Legislature enacted the Drinking Water Revolving Loan Fund Act – 1997 N.M. Laws, ch. 144, paragraph 1 to 9 (the Act)). The Act establishes a DWSRLF that is funded through the Safe Drinking Water Act (SDWA) and Amendments – United States Environmental Protection Agency (EPA) and administered by the NMFA.



If you have any questions regarding the DWSRLF application process, please contact a Public Lending Officer or:
NM SFY 2018 Annual Report FINAL

Todd Johansen,
Sr. Program Administrator, (505) 992-9654 – tjohansen@nmfa.net
Mary Finney,
Water Resources Administrator, (505) 992-9658 – mfinney@nmfa.net