What is principal forgiveness?

Principal forgiveness means the portion of a loan that does not have to be repaid.

What is a SRF loan?

A state revolving fund (SRF) is a fund administered by a U.S. state for the purpose of providing low-interest loans for investments in water and sanitation infrastructure (e.g., sewage treatment, stormwater management facilities, drinking water treatment), as well as for the implementation of nonpoint source pollution …

How does the Clean water State Revolving Fund work?

The 51 CWSRF programs function like environmental infrastructure banks by providing low interest loans to eligible recipients for water infrastructure projects. As money is paid back into the state’s revolving loan fund, the state makes new loans to other recipients for high priority, water quality activities.

What is an SRF bond?

SRF Bond or “SRF Bonds” means bonds, notes or other obligations or evidences of indebtedness authorized to be issued in Series and Installments from time to time under the Master Resolution and that are secured by security superior to the lien on and pledge of security granted to Subordinate Obligations.

How does a principal reduction payment work?

A Principal Reduction is set up as an offsetting charge on the Closing Disclosure to match the amount required. Since it is marked as a charge to the borrower, the “Cash from Borrower” goes up by that particular amount and the borrower may need to bring additional funds to the closing.

How is principal reduction calculated?

Subtract the monthly interest from the monthly payment for the monthly principal reduction. Alternatively, subtract the annual interest from the annual payment for the annual principal reduction. Subtract the reduction from the previous balance for the new balance.

Which project would not be eligible for funding from the Clean Water State Revolving Fund?

Green infrastructure One of the few things the CWSRF cannot fund is the operation and maintenance costs of a project. The Water Infrastructure Finance and Innovation Act of 2014 established additional financing mechanisms and includes eligibility for green infrastructure projects.

What are the provisions of the Clean Water Act?

The CWA made it unlawful to discharge any pollutant from a point source into navigable waters, unless a permit was obtained: EPA’s National Pollutant Discharge Elimination System (NPDES) permit program controls discharges. Point sources are discrete conveyances such as pipes or man-made ditches.

How much has the Clean Water Act cost?

$650 billion
The Clean Water Act has cost the government $650 billion in expenditure because of the grants that it has provided to municipalities to build or improve sewage treatment facilities. The researchers also calculated that it costs $1.5 million to keep one mile of a river clean enough to fish in for a single year.

Is principal reduction a good thing?

While it’s unique concept to grasp, a principal reduction on a borrower paid transaction is usually a good thing because all costs are being covered. There are some limits of how much a principal reduction can be based on the loan.

Do I have to pay back my forgivable principal?

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.

Do I have to pay back principal on my revolving fund?

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.

Which revolving funds are eligible for loan guarantees?

Similar revolving funds established by municipalities or inter-municipal agencies can receive loan guarantees. Under certain conditions, CWSRF programs may provide up to a fixed percentage of their capitalization grants as additional subsidization in the form of principal forgiveness, negative interest rate loans, or grants.

What is the revolving loan program?

As money is paid back into the state’s revolving loan fund, the state makes new loans to other recipients for high priority, water quality activities. Repayments of loan principal and interest earnings are recycled back into individual state CWSRF programs to finance new projects that allow the funds to “revolve” at the state level over time.