Loan Types

Loan Types
Next: Loan Terms

The Water Bank consists of two loan formats, short-term and long-term loans:

  • SHORT-TERM LOANS are currently available for up to 3 full fiscal years, or up to the statutorily permitted term, to finance the cost incurred for environmental planning and engineering design activities as well as soft costs such as counsel fees, and project construction upon application approval. 
  • LONG-TERM LOANS are issued upon completion of project construction.6 Due to the enhancements to the short-term loan program, long-term loans are mainly intended to refinance previously issued short-term loans for construction and planning and design activities. The maximum loan term is currently 30 years but cannot exceed the useful life of the asset being financed.

 

CONSTRUCTION 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.

Loan Types
Next: Loan Terms
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