Local Water Protection Program

Local Water Protection Program

The Local Water Protection Program (LWPP) offers low-interest loans through participating lenders to Iowa landowners for projects to control the runoff of sediment, nutrients, pesticides or other nonpoint source pollutants from entering Iowa waters.

The types of eligible projects include composting facilities, contour buffer strips, field borders or windbreaks, filter strips, riparian forest buffers, terraces, grade stabilization structures, grassed waterways or other practices that are shown to improve or protect water quality.

The Division of Soil Conservation (DSC) of the Iowa Department of Agriculture and Land Stewardship administers the program through its local Soil and Water Conservation Districts (SWCD). The Iowa Finance Authority (IFA) acts as the financial agent.

Prior Prior to receiving a loan, the landowner must receive project approval from the local SWCD.

IFA deposits funds in an account at the local lending institution in an amount equal to the loan amount. This linked deposit allows the lender to make a loan to an eligible borrower at a low interest rate.

How Does It Work?

The local lender originates the loans in amounts ranging from $5,000 to $50,000 with a maximum term of 10 years. The loan amount may not exceed the Natural Resources Conservation Services (NRCS) estimate by more than 5%.
The interest rate charged the borrower will not exceed 3%.
IFA will deposit funds equal to the principal amount of the loan at 0% interest.
The deposit does not guarantee the loan nor is it collateral for the loan. The deposit is only to reduce the interest rate charged to the borrower.
Annually IFA will withdraw from its deposit account an amount equal to the principal repayment of the outstanding loan. As a result, the amount in the deposit account will equal the principal outstanding on the loan.
All costs directly related to the implementation of local water protection projects are eligible. Costs for the purchase of land are not eligible.

Application Procedure
Applying for the LWPP is easy! Simply complete this step-by-step process.

Become a participating lender:

Sign up as a participating lender. Fill out the on-line application and send or fax Lender Participation Agreement to IFA.
After receiving the Lender Participation Agreement, IFA will activate the lender. The lender may now access the on-line system.

Project Application Process:

The borrower works with the local SWCD on the project. For more information on project eligibility or approval, contact Tony Toigo at 515.281.6148.

Loan Application Process:

The borrower completes the lender’s normal loan application process.
When the loan is approved by the local lender, the lender completes the LWPP on-line application.

Loan Completion:

After the project has been completed, inspected and certified by the local NRCS staff, DSC approves the project and loan amount on-line.
After DSC approves the project, IFA approves the loan and the lender receives an email that funds can now be requested.
Lender goes on-line and requests the funds. This involving entering loan details (maturity date, final loan amount, etc.) as well as ACH instructions.
Funds are deposited in the financial institution and the borrower receives his/her loan from the lender.

Annually:

Approximately two weeks before the anniversary date of the loan, IFA will send a notice to the local lender via email reminding the lender that IFA will withdraw from its deposit account an amount approximately equal to the principal that has been repaid.
The amount in the deposit account and the amount of the outstanding principal on the loan will be the same.