New York's 2026 Water Grants: Nearly $500M to 106 Projects as the $3.75B Clean Water Plan Starts and Federal IIJA Money Ends. What Municipalities Should Do Before the Next WIIA Round

On October 20, 2026, Gov. Kathy Hochul announced nearly $500 million in grants for 106 drinking water and sewer projects with $1.4 billion in total costs. The awards come from the Environmental Facilities Corporation (EFC) under its two main state grant programs: the Water Infrastructure Improvement Act (WIIA) grants and the Intermunicipal Water Infrastructure Grants (IMG). The state calls this round the first installment of Hochul's $3.75 billion Clean Water Investment Plan, which is funded in the 2027 Enacted State Budget. It estimates the grants will save communities about $1 billion in debt service and support 22,400 jobs.

The round ended up larger than advertised. EFC's June 2026 grant summary offered $425 million, and the awards reached nearly $500 million. Two days later, on October 22, the EFC board approved another $200 million in financing and grants for 22 projects. That package includes grants awarded in the 2022-2025 rounds, which can now move to funding agreements.

The timing matters because federal money is shrinking. The release says Infrastructure Investment and Jobs Act (IIJA) funding, which has added to the Clean Water and Drinking Water State Revolving Funds since 2022, ends this year. From 2027, the state's own grant money will make up a larger share of the subsidy for local water projects. Municipalities that missed the July 27 deadline should start preparing for the next round now.

Where the money went

The regional totals add up to about $499 million. Four patterns stand out.

The upstate rural regions did well. The North Country, with about 2% of the state's population, received $65 million, nearly as much as the Mid-Hudson. Elizabethtown's $14 million for a new municipal sewer and treatment system is the kind of project the enhanced 50% award for small, rural, disadvantaged communities is designed for. Total grants for enhanced drinking water projects addressing emerging contaminants and wastewater projects in small, rural and disadvantaged communities came to $119 million.

New York City got about 5%. The city has more than 40% of the state's population and received a single $25 million award. WIIA's formula limits how much any one municipality can receive. A city with billions in capital needs reaches the $25 million per-municipality cap on clean water grants with one large project.

Lead service line replacement got its own pool. This was the first WIIA round open to lead service line (LSL) inventory and replacement. LSL projects received $64 million, adding to more than $600 million in state LSL commitments since 2021. EFC had made $127.5 million available for LSL work. If the $64 million figure is the full LSL total, about half of that pool was not awarded, which suggests few municipalities had LSL projects ready under the new rules.

Help with applications paid off. $120 million, about a quarter of the round, went to municipalities that worked with EFC's Community Assistance Teams (CAT). CAT is free one-on-one help with applications, and EFC expanded it in 2023. Use it if you are a small municipality.

How the formulas work

The 2026 Grant Summary sets out the award rules. They are what an applicant needs to plan around.

WIIA clean water (sewer, wastewater, CSO/SSO):

• The lesser of $25 million or 25% of net eligible project costs, covering all phases of the project.
• An enhanced 50% up to $25 million for communities of 3,500 people or fewer that meet the 2026 Clean Water Hardship Policy. That policy compares local income to the 2023 ACS statewide median household income of $84,578, adjusted by a Regional Cost Factor for some counties.
• A maximum of two projects per municipality per round. EFC funds the higher-scoring project first, and the second project gets 25% only if the $25 million municipal cap has not been reached.

WIIA drinking water:

• Emerging contaminants above a federal MCL (PFAS) or the New York MCL for 1,4-dioxane: 70% of net eligible costs with no cap. No other state water grant in New York is this generous.
• Emerging contaminants below an MCL: the lesser of $5 million or 70%.
• LSL inventory: 100% up to $2 million, but only for municipalities that have not received an IIJA LSL inventory grant.
• LSL replacement: 70% up to $10 million, again only without prior IIJA LSL replacement funding. The project must replace the entire line, and the whole scope must be LSL work. Adding a water main replacement to the contract disqualifies it as an LSL project.
• Other drinking water projects: the lesser of $5 million or 70%. Except for EC and LSL projects, a municipality is capped at $5 million per year combined across DWSRF base grants, DWSRF IIJA general supplemental grants and WIIA.

IMG (shared projects between municipalities):

• The lesser of $30 million or 40% of net eligible costs, with one IMG per municipality per year.
• The project needs a binding intermunicipal agreement that sets out each municipality's role and share of costs, plus a designated lead municipality. There is no separate application. EFC decides IMG eligibility from the WIIA application.

Oswego County's $25 million regional wastewater award shows what IMG can do. Forty percent of a large regional project can be worth more than a 25% WIIA grant to each participating town separately. Regional consolidation is the most underused option in New York water funding.

What changed in 2026

The 2026 summary lists four rule changes. Two of them change how projects should be planned.

1. Third-party grants are no longer subtracted from eligible costs. Before, a federal earmark or other grant lowered the base WIIA calculated its percentage from. Now net eligible project costs = total project costs minus contingency. Combining a congressional earmark, a USDA Rural Development grant or a county contribution with WIIA no longer shrinks the WIIA award. Pursue every other source.
2. One combined application for WIIA/IMG and the State Revolving Fund. One submission now places a project in line for both grants and low-cost SRF loans. Applicants who also take SRF money must follow federal requirements: American Iron and Steel, Davis-Bacon wages and federal A/E procurement rules.
3. Lead service line projects became eligible.
4. EFC decides IMG eligibility from the application and supporting documents.

The deadlines that eliminate projects

A WIIA application is effectively a bid package for a project that is ready to build. The July 27 deadline required:

• An engineering report with a current schedule and budget
• Complete environmental review (SEQR) documentation
• A SHPO project review determination letter
• A bond or authorizing resolution that appropriates the local match and names who will sign for the municipality

Each of these takes time. A SHPO determination can take weeks or months. A bond resolution needs a board vote and, in some towns, a permissive referendum period. Engineering reports are usually budgeted in the year before. A municipality that starts in May will probably not make a late-July deadline.

There are also timing rules. The project must not have issued a Notice to Proceed before October 1, 2024, and must not have finished construction before June 10, 2026. If the next round follows the same pattern, the cutoffs will move forward about a year. A project that awards its construction contract early to save time could lose eligibility. Also, any contract without EFC's required terms and conditions is disqualified, including contracts signed before you apply. Put EFC's contract language into your bid documents now, even if you do not yet know whether the project will receive state money.

Two federal factors to watch

The IIJA supplemental money is ending. Since 2022, IIJA has added general supplemental, emerging-contaminant and LSL funding to New York's SRFs, and much of it came as grants or principal forgiveness. With that money ending, a 25% WIIA grant will soon cover more of the subsidy than federal sources do. WIIA rounds are likely to become more competitive per dollar even if the state keeps up its $3.75 billion pace.

PFAS MCLs determine whether the 70% award has a cap. The uncapped 70% award applies only to PFAS "above a current Federal Maximum Contaminant Level." In 2025, EPA said it would keep the 4 ppt limits for PFOA and PFOS and reconsider the limits for other PFAS compounds. Utilities with PFOA or PFOS above 4 ppt are clearly in the uncapped category. Utilities whose problem is PFHxS, PFNA or GenX should check how EFC will classify them, because those projects could fall under the $5 million cap for below-MCL emerging contaminants.

Strategy for the next round

• Start this winter. Budget for the engineering report in the 2027 capital plan, begin SEQR, and request the SHPO determination once the project area is defined. Schedule the bond resolution for spring.
• Use CAT now. CAT-assisted municipalities received a quarter of this round's money. Request a consultation at efc.ny.gov/cat before the next round's guidance is released.
• Consider partnering with neighbors. If your plant is near capacity and a neighboring village's plant is failing, a 40% IMG award up to $30 million is much more than two separate 25% grants. Negotiating the intermunicipal agreement is the slow part, so start those talks early.
• Keep LSL projects separate. Bid LSL replacement as its own contract. Mixing it with water main work disqualifies the 70% LSL award.
• Look for other money as well. Third-party grants no longer reduce WIIA awards, so apply for congressional community project funding, USDA Rural Development and county aid at the same time. EFC's $45 million Green Resiliency Grants program for green stormwater infrastructure is accepting applications now.
• Check hardship eligibility. For a town under 3,500 people, the gap between 25% and 50% can decide whether a project goes ahead. Run your numbers against the 2026 Hardship Policy and its Regional Cost Factor before assuming you qualify, or that you don't.

New York has funded $10.6 billion in water and sewer work since 2021, and EFC says WIIA and IMG grants have saved ratepayers more than $8.3 billion since 2015. With a $3.75 billion multi-year commitment, the next round is very likely to happen. Municipalities that are ready to build when it opens will be the ones funded.

For other New York funding opening this cycle, see our analyses of the County Infrastructure Grant Program's third round and the first Open Space Conservation Grant awards. For a smaller-scale model of PFAS funding, see Wisconsin's newly opened PFAS sampling grants.

If your municipality is preparing for the next WIIA or IMG round, from the engineering report narrative to the hardship analysis and the intermunicipal agreement, Granted can help you draft the application and check it against EFC's criteria.