This paper presents a new fault distance estimation algorithm for loop distribution systems that uses traveling wave theory. The algorithm filters signals to remove noise, transforms the signals to modal components to avoid mutual effects, and uses discrete wavelet transforms to extract arrival times. It then identifies the faulted phase and estimates the fault distance based on the time delay between the zero mode and faulted phase-based aerial mode components. Simulations test the algorithm on a modified IEEE 14-bus test system under various fault conditions and noise levels. Results show the algorithm can accurately estimate fault distance up to 99.7% with 30dB SNR.