Stormwater Best Management Practices Loan

Stormwater management next to a farm

Topics:

Water Quality

The Stormwater Best Management Practices (BMP) Loan Program offers low interest loans for projects to control stormwater runoff. The loans offer incentives for installing infiltration-based stormwater quality practices.

The Division of Soil Conservation and Water Quality (DSCWQ) 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) is the financial agent. Private entities use local participating lenders through a linked deposit arrangement, while public entities work directly with the Iowa Finance Authority.

Project Eligibility 

  • Detention basins 
  • Grassed waterways 
  • Infiltration practices 
  • Pervious paving systems 
  • Ponds or wetland systems 
  • Soil quality restoration 
  • Other practices that are shown to improve or protect water quality 

Applicant Eligibility  

  • Developers 
  • Landowners 
  • Watershed organizations 

Loan Terms - Private Borrowers 

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

Project Application Process 

The borrower works with the local SWCD on the project. For more information on project eligibility or approval, contact the Urban Conservation Team or visit the Iowa Department of Agriculture Stormwater BMP loan page to view the application. 

Loan Application Process 

  • The borrower will work with a participating lender to complete the lender’s loan application process.
  • When the loan is approved by the lender, the lender completes the Stormwater Loan online application.

Become a Participating Lender 

  1. The lender must complete the online application and send the Lender Participation Agreement for Iowa Finance Authority (IFA) and return via email. 
  2. After receiving the signed Lender Participation Agreement, IFA will activate the lender, and the lender will then have access to the online system to enter the online application.

Project Application Process

 The borrower works with the local SWCD on the project. For more information on project eligibility and approval, contact Derek Namanny.

Loan Application Process 

  1. The borrower completes the lender’s loan application process.  
  2. When loan is approved by the lender, the lender completes the SWP online application. 

Loan Completion 

  1. After the project has been completed, inspected and certified by the local NRCS staff, the Division of Soil Conservation and Water Quality (DSCWQ) approves the project and loan amount online. 
  2. After DSCWQ approves the project, IFA approves the application and the lender receives an email that funds can now be requested. 
  3. The lender may request the funds online.
  4. Funds are deposited in the financial institution and the borrower receives his/her loan from the lender. 

Annually 

  • Approximately a week before the anniversary date of the loan, IFA will send a notice to the lender via email reminding the lender that IFA will withdraw from its account an amount 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.