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Funding Your Capital Improvements Projects

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Breaking Down Your Indiana Water and Wastewater System Funding Options

Indiana communities know strong water and wastewater systems matter. The challenge is finding the best way to pay for upgrades. The good news is that several state and federal programs can help fund planning, design, and construction!

Water, wastewater, and stormwater projects are major long-term investments. The right funding plan can:

  • Lower pressure on ratepayers,
  • Improve affordability,
  • Increase grant opportunities,
  • Support long-term planning, including Asset Management Plans, and
  • Help meet regulatory and growth goals

Each program has its own rules, timeline, and benefits. Here is a quick look at common funding options for Indiana utilities.

1. SRF – Indiana State Revolving Fund (IFA‑SRF) – The State Revolving Fund (SRF) provides low-interest financing for water and wastewater projects across Indiana.

  • Low-interest loans with standard 20-year terms and up to 35 years for qualifying projects
  • Possible principal forgiveness for eligible projects
  • Best for Water and wastewater system improvements of all scales and communities seeking predictable, low-cost financing

2. USDA – Rural Development – USDA Rural Development (RD) is a strong fit for small and rural communities.

  • Low-interest loans with terms up to 40 years
  • Grants may be available to qualifying communities, often those serving fewer than 10,000 residents
  • Best for rural communities with limited ratepayer capacity and projects with high costs and where grants can significantly improve affordability

3. OCRA – Office of Community & Rural Affairs – OCRA offers grants for infrastructure and broader community development needs.

  • Wastewater/Drinking Water (WDW)
  • Stormwater Improvement Program (SIP)
  • Best Communities seeking grant-heavy funding packages and projects with strong community benefit or revitalization links
  • Awards vary by round and program.
  • Many projects require a local match

4. EDA – U.S. Economic Development Administration – EDA funding supports projects that create jobs, strengthen industry, and improve economic resilience.

  • Grants for infrastructure tied to economic development
  • Funding often covers public infrastructure needed to support private investment
  • Best for Communities supporting industrial expansion or job creation, and water and wastewater projects connected to economic growth zones

5. Local Funding Options – Many communities pair local funds with state or federal programs. Common local sources include:

  • Utility reserve funds
  • Capital improvement fees
  • Revenue bonds
  • Local income or property tax allocations
  • TIF (Tax Increment Financing) in some cases

These are best for smaller projects, local match requirements, and emergency or time-sensitive improvements.

How to Choose the Right Mix of Funding

Most projects use a mix of funding sources. Commonwealth can help you build a strategy that improves affordability and supports long-term success. For more information on your infrastructure funding needs, contact our Business Development Team!