In allocating loan funds to municipalities, the department shall give consideration to, and apply, the following standards and criteria:
(1) The need and desirability for water to be supplied by the proposed waterworks construction;
(2) The need for upgrading the quality of water of an existing waterworks;
(3) The ability of the municipality to secure borrowed money from other sources and costs thereof;
(4) If the purpose of the loan is to extend water service into an area outside the boundaries of incorporated towns and cities or special districts, the greater capability of another municipality to provide water in the area, if such other municipality is permitted by law to serve the area and will make a commitment satisfactory to the department to extend such service into the area;
(5) The enhancement of the economic development of the state, the region or the locality;
(6) The upgrading of the quality of life of the state, the region or the locality;
(7) The achievement of a political equity or balance across the state and between such diversities or interests as cities and counties, urban areas and rural areas, and grand divisions; and
(8) In the case of a special district, the financial stability of the district, and no funds shall be made available to a district when there is reason to believe that the funds may not be repaid.