The WIFIA Loan Program will require reauthorization prior to September 30, 2026. Reauthorization legislation is an opportunity to begin reforming the Program.
In ‘Narrative’ World, WIFIA Doesn’t Need Reform
Of course, according to the standard WIFIA ‘narrative’, everything’s fine – no reform is necessary. Yes, the WH FY27 Budget is proposing ‘shocking’ cuts to Program funding, but that’ll be fixed in due course, as it was last year.
- In some ways, and for some parts of the water sector, the Program is working as intended: Two ‘Crony Loaners’ Require Reauthorization in 2026
- Remember, the ‘narrative’ can spin anything: Going Full Narrative: “Without WIFIA’s Free Interest Rate Options, Children in Silicon Valley Would Be Dying of Thirst!”
In the Real World, WIFIA Has Serious Issues
Back in the real world, the Program’s issues are becoming obvious.
- Declining loan volume is real, not just a Trump slow-down effect: Explaining the Decline in WIFIA Loan Volume: Part 1
- A lack of policy outcomes and duplicative overlap with other federal programs is also clear, based on Program results 2018-2025: Explaining the Decline in WIFIA Loan Volume: Part 2
- $3.1 billion in funding losses counts as real money, notwithstanding the off-budget games: EPA WIFIA Mandatory Spending
A Guiding Principle for Reform
A recent report from a major water lobbyist actually spells it out for you:
From page 4 of Beyond the Replacement Era, AWWA April 2026
As a lender, the federal government has some significant ‘comparative advantages’ relative to private sector, especially the tax-exempt bond market. In the coming hard times, maximizing the utilization of these advantages is the key to loan program policies that are effective for both borrowers and federal taxpayers — that is, not just zero-sum transfer payments but a real win-win based on the low intrinsic cost of some federal lending strengths (e.g., very long loan terms).
This isn’t just some abstract economic theory — per the above, even lobbyists appear to get it, at least a bit, and you know they’d be looking for more IIJA-type transfer payments if they thought any were on offer. Hard times must be coming, and I think they’re coming at us pretty fast. So, let’s get on with it at WIFIA, shall we?
- I stated the principle explicitly here: 2026 Budget Request: Policy Hints Amidst the Chaos.
Congressional Directives to Ensure Compliance with Existing Policies
A lot of WIFIA ‘reform’ is in fact already on the books — the Program and OMB just need a couple of stern Congressional reminders to comply with established policy:
- OMB Circular A-129 is very clear that federal credit programs must be fulfilling some need that private-sector lenders or other federal programs aren’t. If the A-129 rules and procedures are followed, they’ll lead to the Guiding Principle — the ‘need’ is obviously affordability in local funding, and unique WIFIA loan terms can help fulfill it.
- WIFIA’s reliance on gigantic mandatory appropriations, apart from being obviously wrong, is simply not in compliance with a slew of hard-edged, no-nonsense federal budget policies: EPA WIFIA: Impact of Loan Options Must Be Included in Credit Subsidy Estimates, Per OMB Circular A-11, EPA WIFIA: Program Statistical Models Predictive of Loan Outcomes, Per OMB Circular A-129, EPA WIFIA’s Violation of Anti-Deficiency Act if Predictable Funding Losses are Excluded from Loan Commitment Apportionment.
- And despite the technical aspects of WIFIA’s funding losses, compliance is straightforward: Outline of Credit Subsidy Estimate Model for Predictable WIFIA Loan Funding Losses.
No more excuses, right?
Statutory Amendments Already Proposed by Diverse Water Stakeholders
To fulfill a real-world mission, the WIFIA Program needs some more real-world capabilities. Previously proposed amendments showed what real-world stakeholders think those additional capabilities should be, and hence the short list is a good start for WIFIA reform:
- 55-Year Loan Term: Recent posts — WIFIA 55Y Case Comparison Update 01082026 and 55-Year WIFIA Loan Term Amendment for Long-Lived Projects (one-pager). A longer loan term for long-lived projects has precedent in TIFIA’s 75-year term, and has been proposed many times, most recently in the 2025 WIFIA amendment bill.
- Sub-UST Rates for SRFs: Most recent post here — How $2.1b of Taxpayer Resources Could Have Been Used for Sub-UST SWIFIA Loans, which also has many background links. The basic idea was proposed in the SRF-WIN bill in 2018 to equalize federal funding for small SRFs, but I think the better use would be to encourage SRF leverage. Get it back on the table, in any case.
- Expanded Scope for Small Project Combinations: Most recent post here — Expanding the Scope for WIFIA’s Eligible Combinations of Small Projects. The specific language hasn’t been proposed before, but I think it’s consistent with what the proposed small project amendments were trying to accomplish and (perhaps more importantly) opens new avenue for innovation.
- FCRA Amendment: More detail than any sane person would want here — FCRA Non-Federal. The ridiculous FCRA Criteria have to go.