Interest Rates
Clean Water Fund Program and Safe Drinking Water Loan Program
The Clean Water Fund Program (CWFP) and Safe Drinking Water Loan Program (SDWLP) provide subsidy to municipalities to buy down the market rate on program loans to the reduced interest rates described in the tables shown below. The fixed interest rate applied to the program loan is based on the Environmental Improvement Fund (EIF) market rate in effect on the day of the municipal meeting at which the municipal governing body signs the resolution(s) approving the municipal obligation(s) and the financial assistance agreement (FAA) also known as a loan.
- Interest rate determination
- Market rates
- Subsidy
- Loan terms
- Bonds
- Median household income and population
- Contact information
- Accessible descriptions of interest rate determination tables
Interest Rate Determination
Download the Interest Rates (PUB-CF-036) for both the Clean Water Fund Program and the Safe Drinking Water Loan Program. Accessible descriptions of the following interest rate determination tables are available below.
Municipalities Eligible for CWFP and SDWLP Loans at 55% of the Market Rate
The interest rate for eligible CWFP and SDWLP projects of municipalities not meeting the financial need criteria is 55% of the EIF market rate.
| Loan Term | Bond Type Securing Loan | Market Rate (effective July 1, 2026) | Reduced Interest Rate |
|---|---|---|---|
| ≤ 20 Years | Tax-Exempt | 4.300% | 2.365% |
| 21-30 Years | Tax-Exempt | 4.500% | 2.475% |
| ≤ 20 Years | Taxable | 4.778% | 2.628% |
| 21-30 Years | Taxable | 5.000% | 2.750% |
Municipalities Eligible for CWFP and SDWLP Loans at 33% of the Market Rate
The interest rate for eligible CWFP and SDWLP projects of disadvantaged municipalities that have a population of less than 10,000, and the median household income (MHI) is eighty percent or less of Wisconsin's MHI, is 33% of the EIF market rate.
| Loan Term | Bond Type Securing Loan | Market Rate (effective July 1, 2026) | Reduced Interest Rate |
|---|---|---|---|
| ≤ 20 Years | Tax-Exempt | 4.300% | 1.419% |
| 21-30 Years | Tax-Exempt | 4.500% | 1.485% |
| ≤ 20 Years | Taxable | 4.778% | 1.577% |
| 21-30 Years | Taxable | 5.000% | 1.650% |
Municipalities Eligible for CWFP Loans at 0% of the Market Rate
The interest rate for eligible CWFP projects of extremely disadvantaged municipalities that have a population of less than 1,000, and the median household income is sixty-five percent or less of Wisconsin's MHI, is 0%.
Septage Projects Eligible for 0% Loan Rate
The interest rate for the portion of an eligible CWFP project that provides facilities for receiving and storing septage and capacity for treating septage is 0%. For information on what costs qualify for the 0% rate, read Guidance for Septage Considerations in Municipal Wastewater Facility Planning and for Application of Zero Percent CWFP Loans.
Lead Service Line Projects Eligible for 0.25% Loan Rate
The Bipartisan Infrastructure Law (BIL)-funded Lead Service Line (LSL) Replacement Program interest rate is not tied to the current EIF market rate and is instead set at 0.250%. All loan funding from the BIL LSL capitalization grant will be made available at 0.250% interest for all eligible project costs.
Market Rates
On a quarterly basis, the Wisconsin Department of Administration (DOA) assesses the EIF market rates on which the program subsidies are based. Note that DOA reserves the right to make an increase, if needed, to EIF market rates at any time.
The EIF market rates are as follows for loans with municipal meetings on or after July 1, 2026:
- Market rate for loans issued on a tax-exempt basis with terms of 20 years or less is 4.300%.
- Market rate for loans issued on a tax-exempt basis with terms of 21-30 years is 4.500%.
- Market rate for loans issued on a taxable basis with terms of 20 years or less is 4.778%.
- Market rate for loans issued on a taxable basis with terms of 21-30 years is 5.000%.
Taxable Financing
The market rate for loans issued on a taxable basis will be slightly higher than the market rate for loans issued on a tax-exempt basis. The market rate for loans issued on a taxable basis is determined by dividing the market rate for 20-year or 30-year loans issued on a tax-exempt basis by the prior calendar year's average taxable/tax-exempt ratio.
- Calendar year 2025's ratio was 90% and will apply to municipal meetings between July 1, 2026, through June 30, 2027.
- Calendar year 2024's ratio was 84% and was applied to municipal meetings between July 1, 2025, through June 30, 2026.
- Calendar year 2023's ratio was 89% and was applied to municipal meetings between July 1, 2024, through June 30, 2025.
Longer-Term Financing
In addition, the market rate for loans with terms longer than 20 years will be slightly higher than the market rate for 20-year loans.
Subsidy
Interest Rate Subsidy
Program subsidy buys down the market rate on loans (reduced interest rate loans). Most eligible project costs are funded at a percentage of the EIF market rate, in accordance with sections 281.58(12) and 281.61(11), Wis. Stats., and chapters NR 162.10 and 166.13, Wis. Adm. Code.
Some costs, projects or portions of projects are ineligible for interest rate subsidy and thus receive market rate funding. In the CWFP, a portion of a project may be at the market rate, depending on the project's parallel cost percentage.
Principal Forgiveness
Some municipalities may also be eligible for additional subsidy in the form of principal forgiveness (PF). The PF is comparable to a grant because it reduces the size of the loan, thus reducing annual principal and interest payments. Note: In other states, principal forgiveness may be referred to as partial loan forgiveness.
To be clear, the criteria described on this page only determine the interest rate a municipality qualifies for and is not connected to any additional subsidy a municipality may be eligible for. A separate set of criteria are used to determine principal forgiveness eligibility and are available on the Principal Forgiveness webpage and in the corresponding program's annual intended use plan.
Loan Terms
Loan terms are typically 20 years. Loan terms exceeding 20 years and of up to 30 years are available. The loan term cannot be greater than the useful life of the project.
The Design Life Calculation Worksheet must be submitted at least 9 weeks prior to loan closing for all projects (even 20-year loan terms) unless the project consists solely of installation or replacement of pipeline and associated appurtenances. The worksheet is required for pipe re-lining and/or rehabilitation projects. The CWFP and SDWLP worksheets are available on the Loan Terms webpage.
Bonds
Beginning with state fiscal year 2025 financing, the DOA and DNR have added a market rate for taxable bonds to the CWFP and SDWLP annual intended use plans. Municipal borrowers typically secure a CWFP or SDWLP loan by issuing a tax-exempt revenue or general obligation (G.O.) bond to the program.
Please note that under the state constitution, loans secured with a general obligation note cannot exceed 20 years.
Median Household Income and Population
The Environmental Loans programs use a municipality's median household income (MHI) and population size to determine the amount of interest rate subsidy. The MHI and population data can be accessed from the Data Sources web page.
For State Fiscal Year (SFY) 2027 Projects:
- Wisconsin State MHI = $77,485
- 80% of State MHI for determinations = $62,276
- Municipality's MHI must be $62,276 or less to meet the 80% of MHI criterion for program determinations.
- 65% of State MHI for determinations = $50,365
- Municipality's MHI must be $50,365 or less to meet the 65% of MHI criterion for program determinations.
For SFY 2026 Projects:
- Wisconsin State MHI = $75,670
- 80% of State MHI for determinations = $60,536
- Municipality's MHI must be $60,536 or less to meet the 80% of MHI criterion for program determinations.
- 65% of State MHI for determinations = $49,185
- Municipality's MHI must be $49,185 or less to meet the 65% of MHI criterion for program determinations.
MHI cutoff clarification
All MHI calculations used to determine the subsidized interest rate will be rounded to the third place after the decimal. This policy is truer to language in sections of the CWFP and SDWLP statutes that read XX% or less. (e.g. 80.0001% would be equal to 80.000%; 80.0005% would be equal to 80.001% and considered greater than 80.000%.)
Contact Information
Contact information
Please direct any EIF market and interest rate questions to DOA Capital Finance Office staff at DOAEIF@wisconsin.gov.
Please direct any median household income or population questions to the appropriate coordinator:
Lisa Bushby, Clean Water Fund Program coordinator
Noah Balgooyen, Safe Drinking Water Loan Program coordinator
Accessible Descriptions of Interest Rate Determination Tables
The following are accessible descriptions of the interest rate determination tables above.
The interest rates are as follows for loans with municipal meetings on or after July 1, 2026:
- For eligible CWFP and SDWLP projects of municipalities not meeting the financial need criteria and therefore are eligible for loans at 55% of the EIF market rate:
- Tax-exempt loans with terms of 20 years or less will be awarded with an interest rate of 2.365%.
- Tax-exempt loans with terms of 21-30 years will be awarded with an interest rate of 2.475%.
- Taxable loans with terms of 20 years or less will be awarded with an interest rate of 2.628%.
- Taxable loans with terms of 21-30 years will be awarded with an interest rate of 2.750%.
- For eligible CWFP and SDWLP projects of disadvantaged municipalities that have a population of less than 10,000, and the median household income is eighty percent or less of Wisconsin's MHI, and therefore are eligible for loans at 33% of the EIF market rate:
- Tax-exempt loans with terms of 20 years or less will be awarded with an interest rate of 1.419%.
- Tax-exempt loans with terms of 21-30 years will be awarded with an interest rate of 1.485%.
- Taxable loans with terms of 20 years or less will be awarded with an interest rate of 1.577%.
- Taxable loans with terms of 21-30 years will be awarded with an interest rate of 1.650%.
- Reminder of determinations not included in the tables above but after them:
- The interest rate for eligible CWFP projects of extremely disadvantaged municipalities that have a population of less than 1,000, and the median household income is sixty-five percent or less of Wisconsin's MHI, is 0%.
- The interest rate for the portion of an eligible CWFP project that provides facilities for receiving and storing septage and capacity for treating septage is 0%. Refer to Septage Considerations Guidance.
- The BIL-funded LSL Replacement Program interest rate is not tied to the current EIF market rate and is instead set at 0.250%. All loan funding from the BIL LSL capitalization grant will be made available at 0.250% interest for all eligible project costs.