The Water Bank consists of two loan formats, short-term and long-term loans:
Construction Loan Program (CLP) loans are short-term loans that provide capital for project planning, design, and construction without repayment of principal or interest during the period of the CLP loan.
Project sponsors are strongly encouraged to secure CLP loans during the project planning phase for multiple reasons. It avails the sponsor of funds necessary to pay for engineering and related project soft costs, such as legal fees. It addresses all financing issues at the beginning of the project, avoids delays in scheduling financing at the time of project construction, and provides an opportunity for borrower staff to learn the requisition process prior to construction and interact sooner with Program staff on their specific project(s).
As of the date of this publication CLP loans mature no later than the third fiscal year following the date of loan closing. Legislation pending at the time of this writing, will authorize up to two additional years for planning and design activities as part of CLP loans closed prior to submission of engineering design.
As of the date of this publication, interest rates for CLP loans are currently 0% but may be greater based on the availability of funds.
6 This is a change to the program as of FY19. Prior to this year, projects had to be "substantially" complete.
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