PENNVEST Individual On-Lot Sewage System Repair Program
Individual On-Lot Sewage System Loans
The Pennsylvania Infrastructure Investment Authority (PENNVEST) has teamed with the Pennsylvania Housing Finance Agency (PHFA) and the Pennsylvania Department of Environmental Protection (DEP) to offer this special funding program. This assistance is available to eligible homeowners who do not have access to a public sewage system and need to repair or replace their individual on-lot sewage disposal system.
All assistance to homeowners under the On-Lot Funding Program is in the form of loans at an interest rate of one percent. The monthly payment also includes a .75 percent servicing and insurance fee. Loans will be secured by a mortgage on the borrower's home. The maximum term of a loan is 20 years and loan repayment commences within 60 days after the date of loan disbursement. A loan must be immediately repaid in full if the property on which the project is located is either sold or transferred. Loan origination fees will also be charged in connection with a loan.
Benefits to You
The low cost financing available to you under the On-Lot Funding Program can provide you with an adequate on-lot sewage disposal system and save money at the same time. For example, the interest cost savings on a 15 year, $10,000 loan under this program, compared with a conventional loan, could range from $3,000 to $6,000. At the same time, you will be contributing to a cleaner environment for all of Pennsylvania.
Your Continuing Responsibility
A basic requirement of the program is that you keep your upgraded or new on-lot system in good repair, have it pumped out regularly, and ensure that it does not malfunction, fail to adequately treat wastewater, or cause a public health hazard. DEP will help you comply with these requirements. Simple common sense and reasonable regular upkeep should be sufficient to avoid any problems. A pumping schedule and reporting requirements will be included in your loan agreement.
Loans offered under the On-Lot Funding Program are available to all citizens of the Commonwealth, with limited exceptions, as noted below. Information on eligibility requirements is also available by contacting a PENNVEST Participating Lender or your local Sewage Enforcement Officer.
Family income may not exceed $80,613. This is determined using the Adjusted Gross Income from the most current federal income tax returns.
- Credit Worthiness: financial ability to repay the loan.
- Loan Amount Maximum: $25,000.
- Project Type: rehabilitation, improvement, repair, or replacement of an existing system located on a single family, owner occupied property which is the primary residence of the owner.
- Project Location: all areas are eligible unless a community wastewater collection and treatment system is either in place or will be constructed in the next five years.
- Project Costs: construction fees and costs, permit fees, loan origination fees, and legal fees.
- Documentation: all applicable permits, verification from your local municipality that a community wastewater disposal system neither exists nor is planned in the next five years, income, and other credit information.
- Lien Position: the PENNVEST loan must be in
second lien position unless the loan amount is not greater than
$7,500, in which case a third lien position would be allowed.
How to Apply
- Your first step should be to contact a PENNVEST Participating Lender to see if you qualify for a loan. An application fee of $65 will be collected, but it is a reimbursable fee if your loan is closed and disbursed.
- If approval is given, you should then contact your municipal officials (city, township, or borough office) and have them sign a standard form certifying that your proposed project is not in an area which is currently served by public sewers and will not be served by public sewers within five years. Once this is completed, contact the sewage enforcement officer (SEO) serving your municipality to determine if a repair or replacement of your on-lot system is permissible under all applicable Pennsylvania regulations.
- If a repair or replacement is permitted, the system must then be designed, and the designing SEO or professional engineer (PE) must certify that the system proposed is the most cost-effective system available for your property. Your municipality’s SEO then reviews the design and, if acceptable, issues a permit for the system. Where conditions are not suitable for a standard or alternative subsurface disposal system, small flow treatment systems with a discharge may also be eligible. In these cases a PE must design the system and it must be permitted by DEP.
- Your next step is to obtain bids from contractors who could do the work you are considering. Where possible, a minimum of three responsible bids is recommended. Have each contractor provide you with a written copy of the bid.
- Once these steps are completed, take the permit application, permit, bids, and the certifications from both the designer and municipal officials to the participating local lending institution you contacted in the first step to complete your application for funding. That institution may request additional information and documentation.