To carry out this mandate and responsive to evolving financial markets, Iowa's State Revolving Fund Loan Programs utilizes Base Interest Rates for Tax-Exempt and Taxable Standard Term loans (up to 20-year terms) that are re-calculated and published on the first business day each January, April, July, and October (the "Effective Date").
Current Interest Rates
Effective 10/1/2025-12/31/2025
| Planning & Design | Term (years) | Interest Rate | Servicing Fee | Total |
|---|---|---|---|---|
| 3-year Balloon | 3 | 0.00% | 0.00% | 0.00% |
| Standard Term | Term (years) | Interest Rate | Servicing Fee | Total |
|---|---|---|---|---|
| Tax Exempt | 20 | 3.01% | 0.25% | 3.26% |
| Taxable | 20 | 3.89% | 0.25% | 4.14% |
| Extended Term | Term (years) | Interest Rate | Servicing Fee | Total |
|---|---|---|---|---|
| Tax Exempt | 21-30 | 4.01% | 0.25% | 4.26% |
| Taxable | 21-30 | 4.89% | 0.25% | 5.14% |
Interest Rate Lock
To provide applicants with greater certainty during the final stages of the loan process, an interest rate lock is applied once an applicant, in coordination with its financing team, has completed all program prerequisites. These include, but are not limited to:
- Submission of a complete SRF Construction Loan Application;
- Issuance of Notice of Funding Eligibility (NOFE) letters by the Iowa DNR for all contracts funded by the loan;
- Receipt of a legal opinion confirming compliance with bidding procedures;
- Completion of all steps necessary to authorize the issuance of the debt; and
- Completion of a pro-forma financial analysis meeting the program’s criteria.
Once these prerequisites are met and the application is deemed complete, Program staff will place the loan on an upcoming Iowa Finance Authority (IFA) Board meeting agenda. At that point, the following rate lock terms immediately apply.
Interest Rate Policy
Standard Term Construction Loans (up to 20 years)
The Base Interest Rate for tax-exempt loans is calculated by taking 75 percent of the average daily Bloomberg BVAL General Obligation Municipal AAA 20-year yield ("BVAL") for the calendar month immediately preceding the Effective Date. For example, the Base Interest Rate effective October 1 is calculated using the average daily 20-year BVAL yield for the month of September.
Similarly, the Base Interest Rate for taxable portions of SRF projects is calculated by taking 75 percent of the average daily Bloomberg BVAL Taxable General Obligation Municipal AAA 20-year yield for the calendar month immediately preceding the Effective Date.
Extended Term Construction Loans (21-30 years)
Extended term loans of up to 30 years are available for qualifying projects (as approved by DNR). The interest rate for projects that qualify and wish to close a loan with extended term financing is:
| Loan Term* | Interest Rate |
|---|---|
| 21-30 years | Base Interest Rate + 1.00% |
| * Not to exceed the qualifying average useful life of the project | |
Loans for Lead Service Line Projects
The interest rate for the loaned portion of lead service line projects is 0%. Loan servicing fees will still apply.
Loan Initiation Fees
New SRF Construction Loans are assessed a loan initiation fee equal to 0.50% of the total loan commitment amount, capped at $100,000, payable upon loan execution. Borrowers who meet the SRF Program’s affordability criteria as a disadvantaged community and have received a loan forgiveness award will not be charged initiation fees.
Planning & Design (P&D) Loans
P&D Loans have no interest or payments due for up to three years while the project is designed. Borrowers will still need to engage their Bond Counsel to authorize and issue the debt. P&D Loans will be rolled into an SRF Construction Loan or may be repaid when other permanent financing is committed.