Knowledge Base

What is a State Revolving Fund (SRF) loan?

A State Revolving Fund (SRF) loan is low-interest financing for water infrastructure projects, made possible by a federal-state partnership where EPA capitalizes a state-run loan fund that gets "revolved" — repaid loans are lent out again to the next round of projects — rather than spent once as a grant.

There are two parallel programs: the Clean Water SRF (CWSRF), created by the 1987 Clean Water Act amendments (33 U.S.C. § 1383) for wastewater, stormwater, and nonpoint-source projects, and the Drinking Water SRF (DWSRF) for public water systems. EPA provides capitalization grants to all 50 states plus Puerto Rico; for base capitalization grants, states generally contribute a 20% match. Each state administers its own program, so eligibility, interest rates, and project-ranking criteria vary even though the federal framework is shared. American Iron and Steel (AIS) domestic-content rules apply broadly to covered SRF-funded public water system and treatment works projects. BABA applies to SRF equivalency projects; when BABA and AIS both cover iron-and-steel products, AIS compliance satisfies BABA's iron-and-steel requirement, while BABA separately extends domestic-content requirements to manufactured products and construction materials. Covered SRF construction also generally carries Davis-Bacon prevailing-wage requirements. Under current EPA guidance, applicable good-faith procurement efforts toward DBE, MBE, and WBE participation remain relevant, while fair-share-objective negotiation and certain reporting and enforcement provisions are suspended under RAIN-2025-G02. Knowing a project is SRF-funded early tells a contractor or supplier which requirements to verify before the specification book confirms them.

SRF funding is one of the highest-leverage facts to catch early because it signals a cluster of downstream requirements worth checking together. Nonlinear surfaces funding-source indicators during project qualification alongside scope and quantities, so a company does not discover AIS, BABA, or prevailing-wage requirements only after committing estimating hours to a bid.

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