Support for Disadvantaged Communities

The State Revolving Fund offers additional financial support and technical assistance to communities that qualify as a Disadvantaged Community (DAC). If your community meets the criteria to be considered a DAC, your project may be eligible for planning grants, design and engineering grants, principal forgiveness, and reduced interest rates. Click through the dropdowns below to learn more about whether your community may qualify as a DAC.

What is a Disadvantaged Community (DAC)?

A disadvantaged community (DAC) has a population of 10,000 or less and meets other primary and secondary factors, such as income levels, household value, and unemployment rates, as defined by Colorado’s SRF program. Click through the sections below to learn how to determine if your community is eligible for DAC status.

How to Determine if Your Community Qualifies as a DAC

Your community must meet a combination of primary and secondary factors to qualify as a DAC. Review the criteria and use the flowchart below to determine if your community qualifies as a DAC. You can also refer to “Testing for DAC” on page 5 of DOLA, CWRPDA, and CDPHE’s “Defining Disadvantaged Communities” document linked here and at the Additional Resources/Tool dropdown, below.

Primary factors

  • P1 – Community Median Household Income (MHI)
    • Community MHI less than or equal to 80% of state MHI
  • P2 – Community Median Home Value (MHV)
    • Community MHV less than 100% of State MHV
  • P3 – County Unemployment Job Loss
    • County 24-month unemployment rate is greater than the state average OR
    • loss in the number of jobs in the county over a 10 year period

Secondary factors

  • S1 – County Median Household Income (MHI)
    • The community is in a county that is equal to or less than 80% of the state MHI
  • S2 – Community 10-year Population Loss
    • Community or system shows a decline in population over a ten year period
  • S3- Community Assessed Value per Household
    • Community’s total assessed value per household is less than the median Colorado municipality’s
  • S4 – Current and Projected System Debt Per Tap to MHV
    • Community’s current and projected debt per tap to MHV is more than that of the median CO municipality
  • S5 – System Full-Cost Per Tap to MHI OR Required Revenue Per Tap to MHI
    • Revenue per tap to MHI necessary to cover operations and depreciation for a system OR
    • Revenue per tap to MHI necessary to achieve 110 percent coverage ratio for approved SRF loan.
    • Either must be greater than the median Colorado municipality

Disadvantaged communities are classified as either Category 1 or Category 2 based on the scenarios above.

Category 1: Communities that meet Scenario 1, 2, or 3 are qualified to receive a 2.50%* interest rate for 20 year loan and a 2.75%* interest rate for loans up to 30 years on loans up to $3 million, or the prevailing direct loan rate limit.

Category 2: Communities that meet Scenario 1, 2, or 3, and both Current and Project System Debt to MHV and Required Revenue per Tap to MHI exceed the municipal 80th percentile for each factor are qualified to receive a 1.5%* interest rate for 20 years and a 1.75% interest rate for up to 30 years on loans up to $3 million, or the prevailing direct loan limit.

* Interest rates are determined on or before December 31 each year for the upcoming calendar year.

What if Your Community Did Not Qualify as a DAC?

If your community does not pass the traditional tests to qualify as a DAC, as described in the section above, you may still be eligible to receive financial benefits through a business case scenario. This approach is used when traditional data is unavailable, falls just short of the DAC criteria thresholds,  or does not reflect recent socio-economic changes in your community. A business case scenario allows your community to present alternative, relevant data to demonstrate financial need. A business case may be conducted after submission of an acceptable Project Needs Assessment. For more details, contact your Water Quality Control Division project manager.

Support Available to Disadvantaged Communities

The Colorado SRF program offers additional support, lower interest rates, subsidies, and grants to applicants that qualify as a disadvantaged community. DACs are also eligible for additional loan principal forgiveness. Click through the dropdowns below to learn more:

Loan Principal Forgiveness

One way Colorado provides additional subsides to eligible DACs is in the form of principal forgiveness, i.e., the portion of a loan that does not need to be repaid. Principal forgiveness may be awarded at the loan approval phase for project costs such as construction.

Amounts available will vary, and depends on availability of funds. The priority point system awards points to communities for meeting DAC eligibility criteria. The more priority points a community receives, the more principal forgiveness they are eligible to receive. Communities that meet these criteria will receive more priority points, which makes them eligible for greater principal forgiveness.

Grants

The Colorado SRF program offers Planning and Design & Engineering grants to DACs.

Planning Grant

  • Planning Grants provide funds up to $10,000 per project.
  • Planning Grants Assist DACs with the costs of complying with program requirements such as the Project Needs Assessment, environmental assessments, energy audits, and the legal and accounting fees that may be associated with the formation of a government entity.
  • Grant requests are included as part of pre-qualification step and applicants are required to have a pre-qualification meeting with the SRF administrators.
  • Both government agencies and private non-profits are eligible for Planning Grants. Business cases are not eligible for planning grant assistance.
  • Planning Grants are invoiced at an 80:20 ratio to meet the state 20% match requirement. Planning Grant terms are no more than 1 year.

Conversion Planning Grant

  • Conversion Planning Grants assist DACs with costs of converting a privately owned for profit or non-profit system into a governmental entity such as a special district, or a local public improvement district for the purposes of financing an eligible project. Conversion grants can also assist with the costs of complying with SRF program requirements.
  • Conversion Planning Grants generally amount to 10-16% of the cost of the total project budget up to $25,000.
  • Each DAC can only receive one Conversion Planning Grant or Planning Grant.

Design and Engineering Grants

  • DACs may be eligible for up to $300,000 for a design and engineering grant. Private non-profits are not eligible.
  • Design and Engineering Grants are paid at an 80:20 ratio. The 20% match portion will be reimbursed upon execution of the project’s loan.
  • The Design and Engineering Grant is only intended to assist entities that plan to come through the SRF program for loan funding.

Technical Assistance

The EPA selected 29 Environmental Finance Centers (EFCs) across the country to help communities access federal funding for infrastructure projects that improve environmental protection. Through the Bipartisan Infrastructure Law, these EFCs are funded to provide technical assistance to disadvantaged and underserved communities. This assistance includes working with communities to identify sustainable infrastructure solutions and develop and submit SRF project proposals.

The National Rural Water Association (Region 8 EFC, which includes Colorado) provides finance-related training, technical assistance, finance studies, and other analytical support to help communities develop sustainable solutions to the critical issues associated with meeting environmental standards and goals.

The Colorado SRF Program has dedicated funding and technical assistance specifically to support Colorado communities. Use the dropdowns below to explore details about the technical assistance available through the DWRF and WPCRF programs.

Drinking Water Revolving Fund

Within the DWRF, the Colorado SRF program uses federal funds to provide small system training and technical assistance to systems serving 10,000 people or fewer. Technical assistance can include:

  • One-on-one training and coaching for water systems.
  • Collaborating with EPA supported technical assistance contractors regarding project development to assist drinking water systems in meeting the requirements to obtain funding through the SRF.
  • Identify training needs and create and provide basic operator training throughout the state.

Water Pollution Control Revolving Fund

Within the WPCRF, the Colorado SRF program uses federal funding to provide technical assistance and coaching for wastewater operators of publicly owned wastewater treatment facilities in rural and underserved communities. Technical assistance can include:

  • Project identification coaching.
  • Coaching regarding technical, managerial, and financial assistance.
  • Contractors providing in-person and virtual training events focused on wastewater operators.

Priority Scoring for Disadvantaged Communities

The Colorado State Revolving Fund uses a project prioritization process to assign a “score” to each project. This prioritization process aims to ensure equitable access to SRF funding. This score determines several factors, including:

  • The loan cycle in which applicants may submit applications.
  • The loan’s interest rate.
  • The level of subsidization or loan principal forgiveness a project is eligible to receive.

The prioritization process establishes a “priority point threshold” to determine when a project may submit an application. This threshold, set by the SRF administrators, is the total number of priority points a project earns. Scoring is based on criteria outlined in the priority scoring models found in Attachment I of the Drinking Water Revolving Fund and Water Pollution Control Revolving Fund  Intended Use Plans.

  • Projects scoring at or above the threshold may apply during any loan cycle throughout the year.
  • Projects scoring below the threshold may only apply during “Open” cycles. (See the schedule below for “Open” and “Limited” cycles.)

January 5 (leveraged) – Open

February 5 – Open

April 5 – Limited

June 5 (leveraged) – Limited

August 5 – Limited

October 5 – Limited

November 5 – Limited

Scoring Process

Applicants will receive a preliminary point score during the pre-qualification stage and a final score at the Project Needs Assessment stage.

Both the DWRF and WPCRF are designed to help finance sustainability projects. The prioritization process for each SRF program awards points to projects that advance sustainable water infrastructure and conservation. Click the dropdowns below to learn more about prioritization scoring for each revolving fund program.

Drinking Water Revolving Fund Scoring Model

The DWRF Priority Scoring Model awards projects points in six categories:

  • Drinking Water Quality and Public Health
  • Affordability
  • CPDWR (Colorado Primary Drinking Water Regulations) Compliance
  • Source Protection and Conservation
  • Sustainability and Resiliency
  • Readiness to Proceed

The priority point threshold for the DWRF is 110 points. Any project that scores 110 or more priority points across the six categories at the time of application is eligible to apply during any loan cycle throughout the funding year.

Attachment II of the DWRF IUP outlines the additional subsidization a project may receive based on their priority point score. Check out Attachment II below to see the formula SRF administrators use to determine a project’s additional subsidization.

Water Pollution Control Revolving Fund Scoring Model

The WPCRF Priority Scoring Model awards projects points in five categories:

  • Water Quality Improvement Criteria
  • Financial/Affordability Criteria
  • Permit Compliance
  • Sustainability/Resiliency/Green Project Reserve (GPR)
  • Readiness to Proceed

The priority point threshold for the WPCRF is 100 points. Any project that scores 100 or more priority points across the five categories at the time of application is eligible to apply during any loan cycle throughout the funding year.

Attachment II of the WPCRF IUP outlines the additional subsidization a project may receive based on their priority point score. Check out Attachment II below to see the formula SRF administrators use to determine a project’s additional subsidization.

Additional Resources & Tools

Drinking Water Revolving Fund 2025 Intended Use Plan

Take a look at the DWRF Intended Use Plan to learn more about the purpose of the SRF program, check project eligibility, see the priority scoring system, and make sure that your community is listed under Attachment 1 as eligible to apply.

Water Pollution Control Revolving Fund 2025 Intended Use Plan

Take a look at the WPCRF Intended Use Plan to learn more about the purpose of the SRF program, check project eligibility, see the priority scoring system, and make sure that your community is listed under Attachment 1 as eligible to apply.

Defining Disadvantaged Communities

Check out this resource to learn whether your community qualifies as a disadvantaged community and is eligible to receive planning grants, design / engineering grants, principal forgiveness, and reduced interest rates.

SRF Prioritization Process Frequently Asked Questions

Learn more about the prioritization scoring system by reading the FAQ here. This CDPHE document answers common administrative questions related to the point prioritization process.

SRF Disadvantaged Communities Data Glossary

Check out this data glossary to learn how the data that decides if you are a DAC is gathered. This glossary also explains what all of the factors that determine DAC eligibility mean.

Colorado SRF Disadvantaged Community Data Map

Explore this interactive map to see if your community qualifies as a DAC and which criteria qualifies your community as a DAC.