Financing Private Septic System Repair and Replacement

September 24, 2021 Stacey Isaac Berahzer

By Stacey Isaac Berahzer

Figure 1: Septic tank word cloud by ibreak stock

Publicly-owned wastewater systems face large infrastructure expenses, and there are several established sources of financing designed for these types of systems. On the other hand, there have traditionally been very limited funding options designed for a homeowner who is not connected to public wastewater. Thousands of Georgia homeowners fit this scenario, where they have private onsite wastewater systems called septic tanks. In the 15-county Metropolitan North Georgia Water Planning District alone, it is estimated that there are more than 450,000 of these septic systems (see Figure 2). When these systems need repair or replacement the cost can vary widely but is usually in the range of several thousand dollars, and in some instances, costs can get up to around $20,000. This post highlights a few financing programs tailored specifically to septic tank repair.

Besides the generic home improvement financing options such as personal loans, cash advances from credit cards, lines of credit, or home equity loans, the following are financing options designed for septic repair or replacement. The programs range from grants to loans with interest rates ranging from 1% to 6%.

Figure 2: Estimated Number of Septic Systems by County within the Metropolitan North Georgia Water Planning District (Geosyntec Consultants)

The Single-Family Housing Repair Loans & Grants (Section 504) is a program run by the United States Department of Agriculture (USDA). As part of its Rural Development program, these grants assist elderly, very-low-income homeowners to remove health and safety hazards, including septic repairs. Loans are also available to very-low-income homeowners to repair, improve, or modernize a dwelling.
The USDA runs another program known as the Rural Decentralized Water Systems Grant Program. In this case, however, the homeowner is not the grantee. Instead, a qualified nonprofit runs a revolving loan fund that homeowners can then access to repair septic systems.
The Water Well Trust is an example of a nonprofit organization that runs the type of revolving loan described in the previous bullet. This organization will soon be providing funding for septic projects to rural homeowners. The maximum per septic system will be $15,000. Loans have an interest rate of 1% with terms of up to 20 years.
In some limited cases, Section 319(h) Georgia's Nonpoint Source Implementation Grant can be used for septic systems. The Georgia Environmental Protection Division (GAEPD) receives an annual grant under Section 319(h) of the Federal Clean Water Act to address nonpoint source pollution in support of Georgia’s Nonpoint Source Management Program. GAEPD then conducts a competitive process to fund eligible projects that will lead to direct reductions in pollutant loads and measurable water quality improvements in impaired waters throughout the State. In specific cases, the public entity that applies for these funds may include septic tank funding in its application. Individuals do not qualify to receive funding, but may be granted funding through one of the funded public entities.
The Individual Household Well & Septic Loan Program is run by the Rural Community Assistance Partnership (RCAP). It provides loans of up to $15,000 to residents of rural communities to pay for the installation of a new standard or alternative septic system. Interest rates range from 3% to 6%.

As may be apparent from some of these programs’ names, most of them also fund private water well projects. More about each of these programs, including eligibility criteria and staff contacts, can be found here by clicking on the “Septic Funding Table.”

Proper maintenance of septic tanks involves some costs to the homeowner too. But, even with regular maintenance, septic tanks eventually need major repairs and replacement. With many Georgians living in areas where public wastewater service is not feasible, financing sources for homeowners to repair and replace these septic systems are an important tool in managing the state’s water quality.

This is part of a blog post series funded by the Georgia Environmental Finance Authority (GEFA).

Disclaimer: The opinions of the writers should not be considered legal advice or endorsement by GEFA.

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The USDA runs another program known as the Rural Decentralized Water Systems Grant Program. In this case, however, the homeowner is not the grantee. Instead, a qualified nonprofit runs a revolving loan fund that homeowners can then access to repair septic systems.

The Individual Household Well & Septic Loan Program is run by the Rural Community Assistance Partnership (RCAP). It provides loans of up to $15,000 to residents of rural communities to pay for the installation of a new standard or alternative septic system. Interest rates range from 3% to 6%.

As may be apparent from some of these programs’ names, most of them also fund private water well projects. More about each of these programs, including eligibility criteria and staff contacts, can be found here by clicking on the “Septic Funding Table.”

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