Principal Forgiveness

Principal Forgiveness
Next: The Wise Act

Some high priority projects are also eligible for principal forgiveness (or grant-like funding) and interest-free loans from the Water Bank. Please note that there are limited funds available each year and the types of projects that are eligible for principal forgiveness change each year.

TIP: CALL THE WATER BANK FOR INFORMATION ON PROJECTS CURRENTLY ELIGIBLE FOR PRINCIPAL FORGIVENESS AND REMAINING PRINCIPAL FORGIVENESS BALANCES FOR EACH.

This guide details the types of projects eligible for principal forgiveness that have been available in the past; however, this eligibility is subject to change. Please note that Water Bank financing is subject to change year-to-year. To verify the current loan types and terms, see the most recent Intended Use Plan (IUP), which is available online at http://www.nj.gov/dep/dwq/cwpl.htm. Principal forgiveness is available for green infrastructure projects in Combined Sewer Overflow (CSO) Sewersheds.

GREEN INFRASTRUCTURE PROJECTS IN COMBINED SEWER OVERFLOW (CSO) SEWERSHEDS

The Water Bank provides principal forgiveness loans for Combined Sewer Overflow (CSO) abatement projects utilizing green practices (such as green roofs, rain gardens, porous pavement, and other activities that maintain and restore natural hydrology by treating stormwater runoff through infiltration into the subsoil, treatment by vegetation or soil, or stored for reuse).

In FY19, the Water Bank provides 50% principal forgiveness, 25% DEP interest-free financing, and 25% I-Bank Market rate financing for GI projects that manage stormwater to reduce the overflow of untreated wastewater from CSOs, for a half grant, half loan at .125% of market rate.There is a $2 million cap of principal forgiveness per applicant in SFY19. DEP interest-free funding will be provided for costs beyond the cap or in lieu of principal forgiveness.

Other high-priority project types that are eligible for principal forgiveness in FY19 include the following:

CSO FLOW ABATEMENT IN COMBINED SEWER OVERFLOW (CSO) SEWERSHEDS: the Water Bank provides 50% principal forgiveness, 25% DEP interest free financing, and 25% I-Bank Market Rate financing for the first $10 million for more traditional capital improvements (e.g. treatment plant expansions, sewer separation) that reduce CSOs. DEP interest-free funding will be provided for costs beyond the cap or in lieu of principal forgiveness. (Dependent upon the availability of prior year carryover funds.)

COASTAL COMMUNITY WATER QUALITY RESTORATION: the Water Bank provides 50% principal forgiveness for projects that will eliminate, prevent, or reduce occurrences of shellfish bed and beach closings due to the presence of pathogens; 25% DEP interest-free and 25% I-Bank Market Rate financing. (Dependent upon the availability of prior year carryover funds.)

BARNEGAT BAY: the Water Bank provides 50% principal forgiveness, 25% DEP interest-free financing, and 25% I-Bank Market Rate financing for stormwater and non-point projects in the Barnegat Bay Watershed.

SMALL SYSTEM ASSET MANAGEMENT: the Water Bank provides 100% principal forgiveness to small drinking water and clean water systems to develop and implement asset management programs.

NANO: the Water Bank provides 50% principal forgiveness for small drinking water systems serving communities with populations of 10,000 residents or less. Qualified borrowers are currently active publicly-owned and privately-owned community water systems and nonprofit non-community water systems.

LEAD SERVICE LINE REPLACEMENT: the Water Bank provides principal forgiveness program for drinking water systems to replace lead service lines in communities serving customers whose median household incomes are less than the county median household income. For SFY 2019, financing is provided in the form of 90% principal forgiveness and a 10% DEP interest free loan, with a $1.0 million cap per project. In order to receive the principal forgiveness, projects must be certified as "complete." Complete projects alleviate lead in all affected system components (service provider lines, property owner lines, and any internal plumbing, and delivery fixtures). Please check with the I-Bank or reference the current Intended Use Plan for financing details.

Principal Forgiveness
Next: The Wise Act
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NEW JERSEY INFRASTRUCTURE BANK APPLICANT'S GUIDE