State Loan Program Texas Water Development Fund II (DFund)

TWDF Program Information Sheet

1. What can the program do for you?

The Water Development Fund (Dfund) is a state funded loan program that does not receive Federal subsidies and is not subject to federal crosscutters.  The DFund enables the Board to fund multiple eligible components in one loan to our borrowers, e.g. an application for funding of water and wastewater components can be processed in a single loan.

2. Who can borrow?

Eligible applicants for the DFund include all political subdivisions of the State (at tax exempt rates) and nonprofit Water Supply Corporations (at taxable rates).  Political subdivisions include cities, counties, districts, and river authorities.  (See additional eligibility Special Requirements below).

3. What types of projects can I use the loan funding for?

Financial assistance for Water Supply projects may include planning, design, and construction for:

  • wells,
  • retail distribution and wholesale transmission lines,
  • system acquisitions,
  • pumping facilities,
  • storage reservoirs and tanks,
  • water treatment plants, and
  • purchase of water rights

Financial assistance for Wastewater projects may include planning, design, and construction for:

  • sewer treatment plants,
  • collection systems,
  • system acquisitions,
  • nonpoint source pollution abatement, and
  • development of new municipal solid waste disposal facilities

Financial assistance for Flood Control may include structural and nonstructural flood protection improvements such as:

  • construction of storm water retention basins
  • enlargement of stream channels
  • modification or reconstruction of bridges
  • acquisition of floodplain land for use in public open space
  • relocation of residents of buildings removed from a floodplain
  • public beach re-nourishment
  • flood warning systems
  • control of coastal erosion
  • development of flood management plans
4. Are loans and grants offered?

Due to statue limitations, only loans are offered through the DFund.  The interest rate on a DFund loan varies depending on market conditions.  The lending rate scales are set 0.40 percent above the TWDB's borrowing cost.  The lending rates are intended to provide reasonable rates for TWDB customers while covering the TWDB’s cost of funds and risk exposure.

Current interest rates are available.

5. What project components can I receive funding to complete?

The pre-design funding option is available for most water supply, treatment, and wastewater projects and allows an eligible applicant to receive a loan commitment on the basis of preliminary engineering, environmental, economic, and social information.  Funds for completing detailed planning, including environmental studies, are provided at closing, whereas funds for design, preparation of final plans and specifications, and construction are placed in escrow until needed.

If the pre-design funding option is not used, ap¬plicants seeking only construction phase funding must develop plans and specifications and have them approved, obtain all necessary permits, and open bids prior to closing the loan.

6. How much funding is available?

The TWDB will sell bonds as needed to obtain proceeds for DFund which will be used to fund loans for our applicants.

For up to date funding availability, please contact Darrell Nichols at (512) 463-8491.

7. When can I apply?

The first step in the application process is to schedule a pre-application conference with TWDB staff to discuss the project's eligibility.  The purpose of the conference is to discuss the proposed project and receive any needed guidance and assistance.  For tax-exempt borrowers, the applicant, the applicant’s financial advisor, and the applicant's consulting engineer should attend this conference.  Requesting a pre-application conference does not in any way obligate an applicant to continue the process.

8. What are the Conditions of Financial Assistance?

For detailed information of the Conditions of Financial Assistance

9. Where can I find more information regarding the financial assistance application?

Interested applicants will need to complete a financial assistance application for agency review and Board approval.  For more information, contact Mireya Loewe at (512) 475-0590.

Special Requirements?

  • Water supply projects must be consistent with the 2012 State Water Plan.
  • A water conservation and drought contingency plan is required for financial assistance greater than $500,000 as mandated by the Texas Administrative Code Title 31 §363, Subchapter A.

Loan Process

Application Process