Frequently Asked Questions
Who is eligible?
Local Governmental Agencies (LGAs) that are eligible for loans include municipalities, public service districts and other political subdivisions authorized to acquire, construct or operate water and/or wastewater facilities.
Does the WDA have a Loan Program funding cycle?
The WDA maintains a pool of funds which it makes available to LGAs on a first-come basis. As funds are depleted, the WDA prepares for the replenishment of funds by issuing additional revenue bonds.
How frequently does the WDA issue revenue bonds?
The frequency and size of a revenue bond issue are dependent upon the demand from and cost to the LGAs. The WDA measures the demand over a 24-month period and considers the cost-effectiveness to the LGAs by taking into account cost of issuance and the administrative effort required to issue the bonds.
How long is the loan term and when does repayment begin?
The LGAs may choose a loan term ranging from no fewer than 20 years to no more than 40 years. Interest accrues immediately after the loan closing, and interest payments are made semi-annually to the WDA. LGAs are permitted to capitalize the interest on the loans during the construction period plus six months. Principal payments are made annually after completion of construction. LGAs make monthly payments of principal and interest to the West Virginia Municipal Bond Commission (MBC), which is the State sinking fund for the LGAs. The MBC makes semi-annual payments to the WDA.
How quickly must Loan Program proceeds be spent by the LGAs?
Because the WDA issues its revenue bonds on a tax-exempt basis, the LGAs must expend the proceeds of bonds within 36 months from the anniversary date the WDA issued its bonds.