The waiver means a family of four exposed to lead-tainted drinking water in Flint with income up to $97,200 would be eligible for Medicaid coverage. As a result, lead leached from pipes, joints and fixtures into an unknown number of Flint households, causing a spike in the levels of toxic lead in the bloodstreams of Flint children.

At the time, Flint's state-appointed emergency manager said that switching back to Detroit-supplied water would cost the city more than $1 million a month and that the Detroit water was "no safer than Flint water". The city had been using Lake Huron water from Detroit but made the change to save money, planning eventually to join a consortium that would have its own pipeline to the lake.

Snyder spokesman Ari Adler said that, under the loan agreement, "nothing was prohibited as this latest round of political rhetoric is suggesting".

Snyder said on Thursday that Flint needed continued local, state, federal and national efforts.

"DEQ needs to improve its oversight and monitoring of community water supplies that implement a new water source or treatment process to ensure that DEQ meets its mission of promoting wise management of water resources to support healthy communities", the audit said, adding that failure to do so in Flint "may have contributed to elevated lead levels in the drinking water system". He thanked the mayor and said he no longer will "have to worry about the lead poisoning" his water. He said he'd also like to set a higher water quality standard than the Federal Lead and Copper Rule and the state is "continuing to do the work on finding all these lead lines".

"Throughout our audit, we became aware of many instances in which sole reliance on the (Lead and Copper Rule) may not serve the best interest of MI citizens...", the report reads.

A month before the loan, a state official notified Snyder's aides of a surge in Legionnaires' disease potentially linked to Flint's water. The lawsuits also name 3 individual government, or former government, employees who played significant roles in the misconduct that led to the poisoning of thousands of children in Flint. Flint’s mayor has floated a shockingly high price to fix the city’s lead-contamination problem, saying it could millions to replace damaged pipes.

The "Fast Start" initiative aims to first replace pipes in residences for at-risk groups, such as pregnant women, children under 6, seniors, people with compromised immune systems, and homes where testing shows high lead levels, city officials said.

A crew dug up a service line Thursday leading to a Flint home as part of a separate effort funded by group of private, charitable, business and community groups.