Federal Grants for Wastewater

The U.S. Environmental Protection Agency (EPA) estimated in 2004 that hundreds of millions of gallons of raw sewage go untreated every year, mostly due to aging treatment systems. To mitigate this problem, the EPA and other federal agencies offer grants and loans to upgrade local treatment systems.

Direct Grants

• The federal government offers a few direct loans to communities to build or upgrade sewage systems. For example, the Department of Agriculture's Rural Utility Service offers grants to communities with fewer than 10,000 residents to do work on water utilities, including wastewater. Other programs include the EPA's Colonias Program for poor communities along the Mexican border and the Department of Health and Human Services' Indian Health Service's Sanitation Facilities Construction Program, which provides technical services to Native American communities.

Block Grants

• The Department of Housing and Urban Development operates the Community Development Block Grant (CDBG) program. HUD appropriates money to states, who then distribute grants. Communities may apply for CDBG funds through the appropriate state agency for many projects, including sewage projects. Additionally, the Department of Commerce appropriates money to the Appalachian Regional Commission for use by communities in the region to complete economic development projects, such as building and expanding sewage plants.

Revolving Loan Programs

• Finally, the EPA offers the Clean Water State Revolving Loan Fund. The EPA appropriates money to states to establish low-interest loans to municipalities to perform sewage treatment projects. As communities repay the money, states can loan the money to other communities. The EPA also offers a Hardship Grant Program to communities of fewer than 3,000 people to offset some of the costs of revolving loan programs.