Homeowner Sewage Program

Loans are available to eligible homeowners, for their principal residence, when they need to:

• Repair or replace their existing lateral to a public sewer system.
• Connect an existing home to the public sewer system for the first time. 
• Repair or replace their individual on-lot septic system. 

The primary benefit for homeowners utilizing the Homeowner Sewage program is eliminating the financial stress of paying for an expensive septic project in one lump sum. The low-interest loans offered through this program allow homeowners to stretch the cost burden over as long as 20 years, providing easier budgeting for other living expenses.

Other benefits of this program:

• Attractive rate for this vital home improvement.
• No prepayment penalty if the loan is paid off early.
• Eliminate worries about your septic system when selling your home.
• Improve the environmental health of your property.
• Avoid or respond to citations from your municipality.
• No limits on household income.

• Fixed interest rate for life of loan, currently as low as 1.75 percent
• Up to 20 years to repay the loan balance (up to 15 years for manufactured homes)
• Maximum loan amount is $25,000; minimum is $2,500.
• Affordable payments: A $25,000 loan at 1.75 percent (2.338 percent APR) for 20 years, would have a monthly payment of $124. (See Terms and conditions below).

• Applicants’ debt to income ratios may not exceed 45%, typically, and 47% with strong compensating factors as identified by PHFA. While there is no minimum credit score, applicants’ credit payment history is reviewed.
• The PENNVEST Homeowner Sewage loan is secured financing and is “sized” around your preferred contractor’s estimate. Making loan application while reaching out to contractors for work proposals and costs is recommended.
• Applicants must be listed on the deed to the property, evidencing ownership, and must be at least 50% owners. If the deed shows more than two owners, a quit-claim deed to remove owners must be recorded prior to PENNVEST Homeowner Sewage Loan closing.
• Loans may take 45 days or more to originate and close. Borrowers who are very responsive to lender information requests may be able to reduce this timeframe to 30 days and those needing more time may need more than 60 days. Applicants are responsible for ensuring that they meet sewer authority or sewage enforcement officer deadlines.
• Second homes, rentals, family members’ homes, and businesses are not eligible for financing.
• A lien will be placed against the property.

The PENNVEST loan’s lien position may be first or second.  Third lien position is permissible only if the second lien is NOT a home equity line of credit (HELOC), a home equity loan (HEL) or a partial claim.  

• For example, an acceptable third lien PENNVEST loan is one behind two loans simultaneously originated for purchase of the home and the second lien is a downpayment or closing cost assistance lien from PHFA or other non-profit organizations OR the two purchase loans are 80-20% split finance liens. Acceptable third lien loans may be up to $25,000.
• Potential applicants with HELOC/HE loan in second lien position who can pay off their HELOC/HEL will be instructed on how to satisfy and document the elimination of their HELOC/HE loan by the PENNVEST lender. In this situation, the HELOC/HE loan satisfaction must occur prior to the recording of the PENNVEST Homeowner Sewage Loan so that it may be recorded in second lien position.
• Applicants with Reverse Mortgages secured by their home may not apply for PENNVEST Homeowner Sewage Loans. 

• The home itself may not be located in an A or V flood zone, even if the homeowner has NFIP (government) flood insurance.
• If any part of the property (i.e., the yard) or an outbuilding or deck is in one of these zones the homeowner must obtain and maintain NFIP flood insurance for the term of the loan.
• The sewer lateral or the septic system may be in an A or V flood zone ONLY IF the municipality will permit (or requires) the location, homeowners obtain and maintain NFIP flood insurance, and no part of the home itself is in the A or V flood zone.

Subject to credit approval and eligibility restrictions including loan use and owner occupancy. Interest rate quoted as of 1/1/2024. The APR is fixed for the term of the loan. Borrower pays origination and closing charges. Sample payment based on $25,000 loan with twenty-year term and 240 payments. Total finance charge for for a $25,000 loan is $5,984.