Revolving Fund Program | RDRUS 23 RFP

Frequently Asked Questions (FAQs)

What is the Revolving Fund Program (Funding Opportunity Number RDRUS 23 RFP)?

The Revolving Fund Program (Funding Opportunity Number RDRUS 23 RFP) is a discretionary grant opportunity offered by the U.S. Department of Agriculture (USDA) through its Rural Utilities Service. It is intended to strengthen water and wastewater systems by helping create or expand revolving loan funds managed by qualified private, non-profit organizations.

What does this grant actually fund?

This grant is used to capitalize (seed) a revolving loan fund rather than paying directly for construction. The non-profit grantee uses the grant funds to operate a loan program that provides financing to eligible borrowers for specific near-term water and wastewater needs.

How is this different from a typical construction grant?

Instead of paying for a specific construction project directly, the program supports a financing mechanism (a revolving fund). That fund can make multiple loans over time, and as loans are repaid, the money can be re-lent to support additional eligible projects.

What is meant by a "revolving fund" in this program?

A revolving fund is a pool of capital used to make loans. The defining feature is that repayments flow back into the fund, allowing the same dollars to be loaned out again for future eligible projects, extending the impact of the initial grant.

What is the central focus of the program?

A central focus is covering pre-development costs tied to proposed water and wastewater projects. These early-stage expenses often happen before a project is ready for full financing or construction and can be a major barrier to moving projects forward.

What are "pre-development costs" in the context of water and wastewater projects?

Pre-development costs are early project expenses incurred before a project is ready for full financing or construction. Based on the opportunity description, these can include preliminary engineering, feasibility work, project planning, environmental documentation, and other upfront activities needed to make a project viable and "shovel-ready."

Why does the program emphasize pre-development financing?

Many communities and utilities may have a strong project concept but lack available cash to pay for required early technical and administrative work. By enabling financing for this stage through a revolving fund, the program helps projects advance to a point where they can qualify for larger funding sources and proceed more quickly.

Can the revolving fund finance costs for existing water and wastewater systems?

Yes. The revolving funds can also finance certain short-term costs for existing systems, including replacement equipment, small-scale service extensions, and other small capital projects that fall outside routine operations and maintenance.

What types of system needs are targeted beyond routine operations and maintenance?

The program is aimed at practical, often time-sensitive upgrades that keep systems functioning, improve service reliability, or address minor expansions, but that are not part of day-to-day operations and maintenance budgets.

Does the program fund routine operations and maintenance (O and M)?

The description distinguishes eligible uses from routine operations and maintenance, indicating the financing is intended for certain short-term costs and small capital projects that fall outside routine O and M.

Who is eligible to apply for this grant?

Eligibility to apply is limited to qualified private, non-profit entities. The listing notes "Others" and directs applicants to the opportunity's additional eligibility language for exact requirements.

If a non-profit receives the grant, what role does it play?

The non-profit grantee acts as the revolving fund manager. Rather than being the end-user for water/wastewater improvements, the grantee makes financing available to eligible entities working on water and wastewater needs.

Who ultimately benefits from this program?

The program ultimately benefits communities and utilities with water and wastewater needs by helping them access financing for crucial pre-development work and certain small, non-routine capital needs that might otherwise be delayed due to limited cash flow or restricted budgets.

Which federal agency and office administer this opportunity?

This opportunity is offered by the U.S. Department of Agriculture (USDA), specifically through its Rural Utilities Service.

What is the CFDA number associated with this opportunity?

The opportunity is associated with CFDA number 10.864.

What funding activity areas are associated with this program?

The program is categorized under funding activity areas that include agriculture, community development, environment, and health, reflecting the role of water and wastewater infrastructure in public health, environmental protection, and rural economic stability.

When was this opportunity created, and what was the closing date?

The opportunity was created on May 10, 2023, with an original closing date of June 10, 2023.

How many awards were expected?

The notice indicates an expected four awards.

What is the maximum (ceiling) award amount?

The award ceiling is shown as 0 in the summary field. This typically indicates that the maximum award amount is not specified in that summary and would need to be confirmed in the full program notice or application package details.

Does the program pay for full project construction?

The description states the program is not intended to fund construction directly. Instead, it capitalizes a revolving fund that can finance eligible pre-development activities and certain short-term, small capital needs.

What is the main purpose of using a revolving structure instead of one-time funding?

The revolving structure allows the initial grant dollars to support multiple projects over time. As loans are repaid, funds return to the pool and can be re-lent, multiplying the impact of the original award.

How should this grant opportunity be understood at a high level?

It is best understood as a capacity and financing tool: it helps establish a sustainable pool of capital managed by a non-profit, which then supports water and wastewater systems and project sponsors with early-stage project costs and small, non-routine capital needs.