Stormwater Loan Program

Stormwater Loan Program

The Stormwater Loan Program offers low-interest loans through participating lenders for projects to control stormwater runoff. These loans offer incentives for developers, landowners, watershed organizations and others for installing infiltration-based stormwater quality practices.

The types of eligible projects include infiltration practices, soil quality restoration, native landscaping, detention basins, ponds or wetland systems, pervious paving systems, 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 administer the program through its local Soil and Water Conservation Districts (SWCD); the Iowa Finance Authority (IFA) is the financial agent.

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?

Local banks originate the loans of $5,000 and more with a maximum term of 20 years.
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 water quality improvements are eligible.

Application Procedure
Applying for a Stormwater Loan 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 the Lender Participation Agreement to IFA at 2015 Grand Ave., Des Moines, Iowa 50312 or fax it to 515.725.4901.
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 lender approves the loan, the lender completes the Stormwater Loan on-line application.

Loan Completion:

After the project has been completed, inspected and certified by the local NRCS staff, the DSC approves the project and loan amount online.
After DSC approves the project, IFA approves the loan and the lender receives an e-mail that funds can now be requested.
Lender goes on-line and requests the funds. This involving entering loan details (date of loan, term of loan, lender contact, etc.)
Funds are deposited in an IFA deposit account at the local lending 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 e-mail reminding the lender that IFA will withdraw from its 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.