1. (a) The interest rate charged on the outstanding balance of disbursed loan funds prior to the date of substantial completion or the date of scheduled completion, whichever is earliest, shall be equal to 1.0% annually.
2. (b) The interest rate charged on the outstanding balance of disbursed loan funds after the date of scheduled completion or substantial completion, whichever is earlier shall be the rate based on the repayment period selected by the applicant and the interest rate established in the applicable IUP (IUP rate) that is in effect at the time the financial assistance agreement is transmitted to the loan recipient.
3. (c) Unless otherwise specified in the applicable IUP, the interest rate based on the repayment period selected by the applicant shall be as shown in (d), below, subject to adjustment pursuant to Env-Wq 507.04, but in no case lower than 2.0%.

4. (d) The interest rate based on the repayment period selected by the applicant shall be as shown in table 507-1, below:

   Table 507-1: Interest Rate Based On Repayment Period Selected by Applicant

   Repayment Period Selected

   Interest Rate

   5 years or fewer

   25% of IUP rate

   Greater than 5 years to 10 years

   50% of IUP rate

   Greater than 10 years to 15 years

   75% of IUP rate

   Greater than 15 years to 20 years

   80% of IUP rate

   More than 20 years, if available under the specific capitalization grant from which the funds are loaned

   Calculated as specified in the applicable IUP

5. (d) If the interest rate determined pursuant to (b) and (c), above, is higher than the interest rate charged by federal agencies for water or wastewater infrastructure projects, the interest rate shall be set at the lower of the following, but not less than 2.0%:
6. (1) The rate determined as specified in accordance with criteria established by the specific capitalization grant from which the funds are loaned; or
7. (2) The interest rate charged by federal agencies for water or wastewater infrastructure projects.

Source. (See Revision Notes #1-#3 at chapter heading for Env-Wq 500) #10984, eff 12-1-15; ss by #13511, eff 12-20-22