Disadvantaged Loans And Affordability

The Department may award disadvantaged loans to applicants deemed a disadvantaged community using the following criteria: (7-1-26) 01. Disadvantaged Community. In order to qualify for a disadvantaged loan, A disadvantaged community may be designated by the Department as a Tier 1, Tier 2, or Tier 3 disadvantaged community if the following affordability criteria are met: (7-1-26) a. Tier 1 disadvantaged community is considered disadvantaged if the community: (7-1-26) i. Is at or below state median household income (MHI); or (7-1-26) ii. Has an MHI equal to or less than one hundred twenty-five percent (125%) of the state MHI and the system meets one (1) of the following four (4) criteria: (7-1-26) (1) Greater than the state poverty rate; (7-1-26) (2) Greater than the state unemployment rate; (7-1-26) IDAHO ADMINISTRATIVE CODE IDAPA 58.01.12 – Rules for Administration of Department of Environmental Quality Wastewater & Drinking Water Loan Funds Section 022 Page 9 (3) The population trend over the most recent five years shows a stagnant or decreasing trend; or (7-1-26) (4) Annual user rate exceeds one and one-half percent of community’s MHI. (7-1-26) b. Tier 2 disadvantaged community is considered disadvantaged if the criteria in Subsection 021.01.a. is met and the annual user rates, based on all operating, maintenance, replacement, and debt service costs (both for the existing system and for upgrades of proposed alternative) for either drinking water or wastewater services exceed two percent (2%) of the applicant community’s MHI. (7-1-26) c. Tier 3 disadvantaged community is considered disadvantaged if the criteria in Subsections 021.01.a. and 021.01.b. are met and the MHI of the applicant’s community is less than eight tenths (0.8) the current statewide MHI. (7-1-26) d. Special conditions and adjustments may include the following. (7-1-26) i. If the applicant's service area is not within the boundaries of a municipality, or if the applicant’s service area’s MHI is not consistent with the municipality as a whole, the applicant may use the census data for the county or the most representative area in which it is located or may use a representative survey, conducted by a Department approved, objective third party, to verify the MHI of the applicant’s service area. (7-1-26) ii. The affordability criteria may be adjusted by the Department on a case-by-case basis if there is a demonstration of special conditions and if approved by the Board as part of the Intended Use Plan. (7-1-26) 02. Disadvantage Loans. The Department will prioritize loan modifications to Tier 3 disadvantaged communities, then Tier 2 and Tier 1 disadvantaged communities such that the loan modifications do not result in user rates below two percent (2%) of the MHI. (7-1-26) a. A disadvantaged loan may be a thirty (30) year loan unless the design life of the project is documented to be less than thirty (30) years. For wastewater loan funding, the length of the repayment period is set at the loan recipient’s discretion, up to the maximum repayment period of thirty (30) years. (7-1-26) b. The interest rate may be reduced from the rate established by the Department to a rate that results in an annual user rate equal to two percent (2%) of the MHI. If the annual user rate still exceeds two percent (2%) of the MHI with the rate reduction, then the community may be provided with principal forgiveness. (7-1-26) c. Principal forgiveness will be allocated proportionally among prioritized disadvantaged communities in the Intended Use Plan. The principal forgiveness may be revised from the initial estimates in the Intended Use Plan based upon review of the total indebtedness. (7-1-26) d. The Department may make adjustments to the disadvantaged loan terms on a case-by-case basis if special conditions exist and are outlined in the Intended Use Plan for Board approval. (7-1-26)