Substandard septic systems are the primary cause of the deteriorating water quality in area ponds, and an aging septic system can be a fetid accident waiting to happen.
For homeowners who want to upgrade failing septic systems but don’t have the funds, there are several forms of financial aid available.
The Homeowner Septic Repair Loan Program, a co-venture between the Department of Environmental Protection, the Massachusetts Department of Revenue, and MassHousing, offers below-market-rate loans for homeowners with septic systems that don’t meet Title V requirements.
The loans range from $1,000 to $25,000, and interest ranges from 0% to 5%, depending on applicant income. The loans are amortized for a period of three to 20 years, depending on the size of the loan, and must be paid in full if the house is sold, refinanced, or transfered. Rates vary in different parts of the state. A household of two with income below $92,000 can qualify for a loan at 5% interest. A household of three or more making less than $104,000 can also qualify for a loan at 5% interest.
The U.S. Department of Agriculture (USDA) recently established a loan program for septic upgrades and other home repairs through its Rural Development Housing Program, known as the Section 504 Home Repair program. Loans are available for low-income homeowners under the age of 62, for up to $20,000 at a 1 percent fixed interest rate for up to 20 years. Homeowners age 62 and older who do not have repayment ability for a loan may be eligible for a grant of up to $7,500. USDA funds can cover all upfront and construction costs, including septic system designs, permits, and installations. Program eligibility is based on household income that cannot exceed 50 percent of the area median income (AMI) and the property must be in a rural community. According to the USDA website, much of Massachusetts qualifies as a rural community.
For homeowners who make too much to qualify for either program, there is the Massachusetts Income Tax Credit, which can provide up to $6,000 in tax credits over four years.
The amount claimed in a tax year cannot exceed $1,500, but any excess credit amount can be applied against the taxpayer’s personal income tax for three years following the year in the credit is claimed. The Title V credit becomes available in the tax year in which the work to repair or replace the failed cesspool or septic system is completed.
For more information on Title V Septic, contact Morse Engineering and Construction.