Interim Financing

Environmental Improvement Fund

Clean Water Fund Program
Safe Drinking Water Loan Program
Land Recycling Loan Program

CLEAN WATER FUND PROGRAM

Section NR 162.04(3), Wis. Adm. Code, limits the eligibility of interest and issuance costs incurred on interim financing taken out by an applicant for project costs requested in a financial assistance application for the Clean Water Fund Program (CWFP).

Net Interest Expense - Interest expense will be offset with any interest earned on the investment of the proceeds from interim financing.

Limits on Costs of Issuance - For issuance expenses, the amount eligible is limited to $7,500 plus 1/2 percent of the total eligible face amount of the interim financing. If interim financing is rolled over or renewed, the face amount may not be counted multiple times in calculating the eligible face amount of interim financing for purposes of this limit.

Eligible Term For Interest Costs - The period of time for which interest on interim financing is eligible for funding shall run from no earlier than 6 months prior to the start of construction through the earliest of any of the following:

1. the closing date of the CWFP loan; or
   
2. one year following substantial completion of the project; or
   
3. September 30th in the year after the project's listing on the CWFP funding list.

Cost Proration - If the term of the interim financing exceeds the above limit, a proration factor will be applied to interest cost using the length of the eligible term divided by the total time interim financing is outstanding.

Interim Financing as a Component of a Multi-Purpose Issue - If the interim financing is a part of a larger multi-purpose debt, the eligible amount of interest and issuance costs will be prorated according to the proportion of eligible interim debt to the total interim debt.

Maximum Principal and Disbursement Documentation - The principal amount of interim financing that can be refinanced with CWFP financial assistance cannot exceed the total amount of the interim financing that was spent on eligible project costs. Supporting invoices must be provided for the amount of the CWFP refinancing.

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SAFE DRINKING WATER LOAN PROGRAM

Section NR 166.07(3), Wis. Adm. Code, limits the eligibility of interest and issuance costs incurred on interim financing taken out by an applicant for project costs requested in a financial assistance application for the Safe Drinking Water Loan Program (SDWLP).

Net Interest Expense - Interest expense will be offset with any interest earned on the investment of the proceeds from interim financing.

Limits on Costs of Issuance - For issuance expenses, the amount eligible is limited to $7,500 plus 1/2 percent of the total eligible face amount of the interim financing. If interim financing is rolled over or renewed, the face amount may not be counted multiple times in calculating the eligible face amount of interim financing for purposes of this limit.

Eligible Term for Interest Costs - The period of time for which interest on interim financing is eligible for funding shall run from no earlier than 6 months prior to the start of construction through the earliest of any of the following:

1. the closing date of the SDWLP loan; or
2. one year following substantial completion of the project; or,
3. September 30th in the year after the project's listing on the SDWLP funding list.

Cost Proration - If the term of the interim financing exceeds the above limit, a proration factor will be applied to the interest costs using the length of the eligible term divided by the total time interim financing is outstanding.

Total Eligible Amount and Disbursement Documentation - The total eligible face amount of interim financing may not exceed the face amount of the Financial Assistance Agreement. Supporting invoices must be provided for the amount of the SDWLP refinancing.

Interim Financing as a Component of a Multi-Purpose Issue - If the interim financing is a part of a larger multi-purpose debt, the eligible amount of interest and issuance costs will be prorated according to the proportion of eligible interim debt to the total interim debt.

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LAND RECYCLING LOAN PROGRAM

Section NR 167.13(2), Wis. Adm. Code, limits the eligibility of interest and issuance costs incurred on interim financing taken out by a municipality for project expenses requested in a Land Recycling Loan Program (LRLP) financial assistance application.

Interest Expense - Interest expense will be offset with any interest earned on the investment of the proceeds from interim financing.

Limits on Costs of Issuance - For issuance expenses, the amount eligible is limited to $7,500 plus 1/2 percent of the total eligible face amount of the interim financing.

Eligible Term for Interest Costs - The period of time that interest on interim financing is eligible shall begin no earlier than 6 months prior to the start of remediation through the earliest of:

1. the closing date of the LRLP loan; or
2. one year following completion of remediation.

Cost Proration - If the term of the interim financing exceeds the above limit, a proration factor will be applied to the interest costs using the length of the eligible term divided by the total time interim financing is outstanding.

Under current IRS regulations, interest or principal payments that the political subdivision makes on the interim debt from municipal funds may not be reimbursed by the LRLP. Interest capitalized to the interim debt balance may be eligible subject to the term limitations above.

Interim Financing as a Component of a Multi-Purpose Issue - If the interim financing is a part of a larger multi-purpose debt, the eligible amount of interest and issuance costs will be prorated according to the proportion of eligible interim debt to the total interim debt.

Disbursement Documentation - Supporting invoices must be provided for the amount of the LRLP refinancing.