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Indiana Finance Authority

IFA > State Revolving Fund > Finance Center Finance Center

Before applying for an SRF loan, most entities hire a Financial Advisor to manage the financial documentation related to the loan. However, if the borrower wishes, hiring a Financial Advisor can wait until after approval of the Preliminary Engineering Report.

Interest Rates:

Interest rates for your loan will be based on a "Base SRF Program Interest Rate," which will be re-set on the first business day of each January, April, July and October. This Base Rate will be calculated by using 90 percent of the average 20-year AAA-rated, general obligation bond Municipal Market Data ("MMD") composite index for the most recent calendar month. The Base Rate is then discounted further based upon a borrower's Median Household Income from 2000 census data and projected user rates.

Due Diligence:

The SRF program requires the borrower to submit a complete due diligence form and packet, including required documentation shortly after the approval of their Preliminary Engineering Report (PER). A Financial Advisor (FA) is selected by the borrower to compile past, present and projected financial information. The borrower must own, operate and maintain the system. The borrower will need to generate sufficient revenue to support operation and maintenance cost and any existing and proposed debt. The SRF loan is repaid within 20 years, and at closing requires the borrower to have a debt service coverage ratio of 1.25 and a commitment to fund a debt service reserve account within the first 5 years.