Money in the revolving fund may be used to:
(1) make loans to municipalities to finance all or a portion of the cost of a project and to make loans to private persons to finance all or a portion of the cost of nonpoint source pollution control projects;
(2) buy or refinance debt obligations of municipalities that were issued to finance projects within the state at or below market rates, provided that the obligations were incurred after March 7, 1985;
(3) guarantee or purchase insurance for obligations of municipalities that were issued to finance projects in order to enhance credit or reduce interest rates;
(4) provide a source of revenue or security for general obligation bonds the proceeds of which are deposited in the revolving fund;
(5) provide loan guarantees for similar revolving funds established by municipalities;
(6) earn interest on fund accounts;
(7) pay reasonable administrative costs of the program not to exceed 4% of all federal grant awards to the fund or the maximum amount allowed under the federal act; and
(8) provide additional subsidization to eligible recipients in the form of forgiveness of principal of loans to the extent authorized or required by federal law and subject to satisfaction of conditions on loans described in 75-5-1113 or to satisfy any other incentives, conditions, or requirements of federal law related to the program.