Forgivable Principal

"grant-like" funding requiring no repayment

Both Clean Water and Drinking Water Revolving Funds offer forgivable principal to borrowers. Applicants that qualify for principal forgiveness are not required to pay it back. Applicants could also receive additional incentives with their forgivable principal, including Technical Assistant funding, reduced interest rates, and extended repayment periods. 

WIFA staff work directly with borrowers, ensuring all financing packages meet each borrower's unique needs. WIFA awards on a "first-come, first-serve" basis. Estimates provided by WIFA are not guaranteed until the loan proceeds to the board, and the loan agreement is issued. 

Drinking Water SRF

In 2019 WIFA made some changes to the Drinking Water forgivable principal offerings. These changes expanded the eligibility criteria for borrowers to receive Forgivable Principal under the DWSRF. Before these changes, DWSRF Forigivable principal was limited to Disadvantaged Communities only. 

Highlights of the new DWSRF Forgivable Principal include: 
  • All drinking water projects are eligible
  • Three categories of Forgivable Principal
  • Can still be combined with TAP and COG assistance

An example of WIFA's new forgivable principal for Drinking Water projects for borrowers that are disadvantaged and solving a public health/compliance issue

Forgivable Principal up to

On the Loan

 Amount Over

But Not Over

Cumulative Forgivable Principal  up to


$  -


100% of the loan amount




$250,000 + 70% of the loan amount over $250,000




$425,000 + 50% of the loan amount over $500,000




$675,000 + 15% of the loan amount over $1,000,000




$1,275,000 + 15% of the loan amount over $5,000,000

but not over $10,000,000 2


Clean Water SRF

Clean water SRF offers forgivable principal for eligible projects as well. As long-term drought continues in Arizona, protecting and increasing water supply and resiliency is a mission that WIFA takes seriously. Like the DWSRF, forgivable principal on the CWSRF can be combined with other financing incentives, always ensuring the best deal for the borrowers. 

Highlights of the CWSRF Include:
  • Green Projects are eligible for up to 20% forgivable Principal
  • Stormwater projects are eligible for up to 20% forgivable principal

Examples include:
  • Water Reuse: Reuse, recharge, collection, and treatment

  • Stormwater: management, mitigation, storage and treatment. Low Impact Development and Nonpoint Source reduction (NPS).

  • Green Projects: Most stormwater mitigation projects are considered "green," including NPS reduction and Low Impact Development. Riparian restoration, and alternative energy enhancements for existing treatment facilities are also eligible.

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