How to Access Federal Infrastructure Funding for Manhole Rehabilitation Programs

Federal funding for water and wastewater infrastructure has never been more accessible than it is right now. The Infrastructure Investment and Jobs Act (IIJA) — commonly called the Bipartisan Infrastructure Law — allocated $55 billion specifically for water infrastructure, creating a once-in-a-generation opportunity for municipalities to tackle deferred rehabilitation backlogs that have been building for decades.

But navigating federal funding programs is genuinely complex. Understanding which programs apply to manhole rehabilitation, how to document your eligibility, and how to structure your project to maximize grant vs. loan allocations can mean the difference between a fully-funded rehabilitation program and a missed opportunity. This guide breaks it down.

The Key Federal Programs

State Revolving Fund (SRF) Programs

The Clean Water State Revolving Fund (CWSRF) is the largest source of federal water infrastructure financing, channeled through state environmental and infrastructure agencies. Under the IIJA, CWSRF capitalization grants increased substantially, and the program now includes provisions for additional subsidy (grants and principal forgiveness) for smaller and disadvantaged communities.

Manhole rehabilitation projects qualify under CWSRF as water quality infrastructure — specifically, sanitary sewer overflow (SSO) reduction. Projects that can demonstrate a direct connection to SSO reduction are eligible for base CWSRF financing, and in many states, for additional subsidy in the form of principal forgiveness.

The practical path: work with your state environmental agency (EPA in your state — for example, Ohio EPA, Texas TCEQ, California SWRCB) to understand your state’s SRF priority system and application timeline. Most states publish annual priority lists and have pre-application assistance available.

EPA WIFIA Program

The Water Infrastructure Finance and Innovation Act (WIFIA) program provides direct federal loans at subsidized interest rates for larger water infrastructure projects ($20 million and above for most communities, $5 million for rural communities). WIFIA loans can be used alongside SRF financing, and the program is specifically designed for projects that are too large for typical SRF processing.

For municipalities with large-scale, system-wide manhole rehabilitation programs, WIFIA can be a highly efficient financing tool. The application process is more intensive than SRF, but the interest rate subsidy on multi-year, large-dollar financing can represent millions in savings over the life of the project.

USDA Rural Development

For rural municipalities and utility districts serving populations under 10,000 (and in some cases up to 20,000), USDA’s Rural Development Water & Waste Disposal Program provides both grants and loans for water and wastewater infrastructure. The grant component is means-tested (lower per-capita income = higher grant percentage), but can cover up to 75% of project costs for the most rural and lowest-income communities.

USDA RD tends to move more slowly than SRF programs, but for eligible communities, the grant component makes it extremely attractive. Application assistance is available through state USDA RD offices.

HUD CDBG Program

For communities with significant low-to-moderate income populations, Community Development Block Grant (CDBG) funds can be used for water and sewer infrastructure improvements, including manhole rehabilitation, when the project serves LMI areas. CDBG is allocated to states (which then sub-grant to smaller communities) and directly to entitlement communities (generally cities over 50,000 population).

Building a Fundable Project

The Essential Foundation: Asset Management Data

Federal funding programs increasingly require evidence of systematic asset management planning. This means you need MACP inspection data for your manholes, a condition-based prioritization queue, and a capital improvement plan that demonstrates how the rehabilitation program fits into your long-term asset management strategy.

If you don’t have this data yet, that’s actually okay — many funding programs include pre-construction technical assistance that can fund the assessment work that builds the foundation for a construction grant/loan application. Starting there is a legitimate and common approach.

The Water Quality Narrative

Frame your project explicitly around water quality outcomes. Funders — whether federal programs or state infrastructure banks — respond to projects that have clear, measurable environmental benefits. For manhole rehabilitation programs, the relevant metrics are:

• Reduction in SSO frequency and volume (if you have SSO data, use it)
• Reduction in infiltration and inflow (I/I), which drives treatment plant capacity and operating costs
• Protection of receiving water bodies
• Compliance with consent decrees or regulatory compliance schedules

Workforce and Equity Requirements

Federal infrastructure funding under the IIJA includes Davis-Bacon Act prevailing wage requirements, Buy America provisions (for iron and steel components), and in many programs, equity requirements around contracting with disadvantaged business enterprises (DBEs). Make sure your procurement documentation reflects these requirements from the outset — retrofitting compliance is painful and can create audit findings after the fact.

State-Specific Resources

Every state has its own SRF program structure, priority point system, and application timeline. The most important first step is identifying your state’s infrastructure finance contact — typically housed at the state environmental agency, state infrastructure bank, or both. The EPA maintains a directory of state CWSRF programs at epa.gov.

State infrastructure finance contacts are generally highly accessible and motivated to help communities access federal funds. Don’t be intimidated by the complexity — reach out to your state SRF program early in your planning process.

Getting Expert Help

For projects of any significant scale, engaging a grant writer or infrastructure finance consultant with specific experience in federal water programs is worth the investment. A good consultant knows your state’s priority system, helps you frame your project for maximum scoring, and navigates the application process to avoid the common errors that cause delays or rejections.

The Manhole Recovery community includes professionals with experience in federal funding application — join our community and post in the forum to connect with peers who have gone through the process in your state. Our upcoming webinars also cover infrastructure funding in depth.