Frontline Community Issues

Frontline communities often encounter obstacles in accessing funding for critical water infrastructure, including limited financial borrowing capacity, financially distressed rate bases, declining populations, or poor credit ratings. While not a complete solution, some state and federal resources offer funding opportunities or technical assistance to support the water infrastructure needs of frontline communities.

The following programs provide funding or financing to implement water, wastewater, and stormwater infrastructure projects:

• EPA provides Sewer Overflow and Stormwater Reuse Municipal Grants to address sewer overflows and stormwater management. This program specifically prioritizes municipalities in financially distressed communities.
• State-administered State Revolving Fund loan programs offer subsidized financing options, including principal forgiveness, zero interest loans, negative interest loans, and grants. Eligibility depends on each state’s SRF policies, but often includes incentives specifically designed to support smaller and disadvantaged communities. Additional subsidies may also be available for green infrastructure, water and energy efficiency improvements, and other environmentally innovative activities.
• For utilities in Western states, the Bureau of Reclamation’s WaterSMART program provides grants for water use efficiency, conservation, and drought resiliency projects.
• The Section 108 Loan Guarantee Program is a program within the federal Department of Housing and Urban Development (HUD) that provides low-cost financing for economic and community development projects, including green stormwater infrastructure and other water infrastructure improvements. Communities can use Section 108 guaranteed loans to either finance specific projects or to launch loan funds to finance multiple projects over several years. Section 108 financing provides an avenue for communities to undertake larger, more costly projects, where they may have limited resources to invest in upfront.

Note that any of these low-cost financing options are only available to publicly owned water systems.

The resources listed here can help communities identify the best programs to support their goals, and to apply for and administer these awards:

• EPA’s online Water Finance Clearinghouse – for communities seeking information about drinking water, wastewater, and stormwater infrastructure needs; includes 2 databases about resources and funding opportunities.
• The EPA’s RealWaterTA program – assists local utilities with aging infrastructure, regulatory maintaining compliance, accessing financial assistance, or planning for lead service line removals and more.
• 12 Regional Environmental Finance Centers around the nation help communities with infrastructure solutions and developing project proposals.

To learn more about funding and financing strategies, visit our Distributed Infrastructure Toolkit section on How to Pay for Distributed Infrastructure.