Texas Water Development Fund Grant

Texas Water Development Fund Grant

Status: ACTIVE
Funder: Texas Water Development Board (TWDB)
Last Updated: November 04, 2025

Summary

The Texas Water Development Fund (DFund) offers state-funded loans for a variety of infrastructure projects, including water supply and flood control initiatives. Eligible applicants include political subdivisions and nonprofit water supply corporations. The program streamlines funding by allowing multiple project components to be included in one loan. As of FY 2020, approximately $2.7 billion has been committed, with applications requiring a pre-application conference to discuss eligibility and project details.

Overview

NOTE:  The first step in the application process is to schedule a pre-application conference with your Regional Project Implementation Team to discuss the project's eligibility. Texas Water Development Fund (DFund) The DFund is a streamlined state loan program that provides financing for various types of infrastructure projects. This program enables the TWDB to fund projects with multiple purposes (e.g., water and wastewater) in one loan. Through Fiscal Year 2020, the program has committed approximately $2.7 billion for projects across Texas. What can the program do for you? The Water Development Fund (DFund) is a state funded loan program that does not receive federal subsidies and is not subject to federal crosscutters. The DFund enables the Board to fund multiple eligible components in one loan to our borrowers, e.g. an application for funding of water and wastewater components can be processed in a single loan. Who can borrow? Eligible applicants for the DFund include all political subdivisions of the state (at tax exempt rates) and nonprofit water supply corporations (at taxable rates). Political subdivisions include cities, counties, districts, and river authorities. What types of projects can I use the loan funding for? Financial assistance for water supply projects may include planning, design, and construction for: wellsretail distribution and wholesale transmission linessystem acquisitionspumping facilitiesstorage reservoirs and tankswater treatment plantspurchase of water rights Financial assistance for wastewater projects may include planning, design, and construction for: sewer treatment plantscollection systemssystem acquisitionsnonpoint source pollution abatementdevelopment of new municipal solid waste disposal facilities Financial assistance for flood control may include structural and nonstructural flood protection improvements such as: construction of storm water retention basinsenlargement of stream channelsmodification or reconstruction of bridgesacquisition of floodplain land for use in public open spacerelocation of residents of buildings removed from a floodplainpublic beach re-nourishmentflood warning systemscontrol of coastal erosiondevelopment of flood management plans Are loans and grants offered? Due to statutory limitations, only loans are offered through the DFund. The interest rate on a DFund loan varies depending on market conditions. The lending rate scales are set at approximately the TWDB's borrowing cost. The lending rates are intended to provide reasonable rates for TWDB customers while covering the TWDB's cost of funds and risk exposure. Current interest rates are available. What project components can I receive funding to complete? The pre-design funding option is available for most water supply, treatment, and wastewater projects and allows an eligible applicant to receive a loan commitment on the basis of preliminary engineering, environmental, economic, and social information. Funds for completing detailed planning, including environmental studies, are provided at closing, whereas funds for design, preparation of final plans and specifications, and construction are placed in escrow until needed. If the pre-design funding option is not used, applicants seeking only construction phase funding must develop plans and specifications and have them approved by TWDB staff, obtain all necessary permits, and open bids prior to closing the loan. How much funding is available? The TWDB will sell bonds as needed to obtain proceeds for DFund which will be used to fund loans for our applicants. When can I apply? The first step in the application process is to schedule a pre-application conference with your Regional Project Implementation Team to discuss the project's eligibility. The purpose of the conference is to discuss the proposed project and receive any needed guidance and assistance. For tax-exempt borrowers, the applicant, the applicant's financial advisor, and the applicant's consulting engineer should attend this conference. Requesting a pre-application conference does not in any way obligate an applicant to continue the process.

Eligibility

You can learn more about this opportunity by visiting the funder's website. Eligible ApplicantsPolitical subdivisionsNonprofit water supply corporationsEligible ProjectsPlanning, design, acquisition, and construction of projects for:Water supply, including reservoirs and well fieldsConservationWater quality enhancementFlood controlWastewaterMunicipal solid wasteProgram RequirementsWater supply projects must be consistent with the current state water planReservoir funding must be segmented or phased; permitting is required prior to a construction commitmentAdoption of a water conservation and drought contingency plan (for entities receiving assistance greater than $500,000)U.S. Iron and Steel requirementsReview of legislative requirements regarding water loss threshold limits