Cost - Financing Septic Repairs

General Information about financing septic repairs is provided below.  If you need additional help finding information about programs that may be available in your area, contact us. Sign in and send us a message that says "Septic Repair Financing Help" and include your city and state.  We do not provide any financing, we only provide information about financing.

State Grants and Loans

States that provide greater regulation of septic systems often provide financial support for the costs to comply with the regulations.   State assistance with septic system repair costs may include:

  • A program to provide low interest loans through local banks; the state subsidizes the loans to allow the bank to offer below market interest rates for septic repairs
  • Revolving loan funds can provide low interest loans for septic repair.  These funds are established by cities, towns, other governmental agencies, or non-profit organizations.  Funds are dispersed to applicants to cover their septic system repair costs as a low or no interest loan.  As the loan is paid back, the community loan fund will be replenished.  This allows the community to disperse the funds again to other members for their septic repairs. 
  • State Grants to communities (or other regional entity) to provide assistance to the elderly, fixed income, or low income individuals for the repair of failing septic systems.  Often these grants may take the form of a low or no interest lien on the property with no re-payment required as long as the individual lives at the property.  Typically, the lien may forgive a percentage of the principal each year.  After a period of years the lien is removed from the property.
  • Tax Deductions and Credits.  A state tax credit for repair of failing septic systems is essentially a state grant offered directly to the property owner.  Even if you paid no income taxes, you can file your tax return and recover the value of the credit.  Often these programs do not have any income limits.  Contact a local tax consultant to see if any deductions or credits are available for septic system repairs.

Tax Deductions and Credits

Some things are worth saying twice.  Your state may offer a tax credit or deduction for the repair of a failing septic system.  Contact a local tax consultant to see if any deductions or credits are available.

In Massachusetts, a state income tax credit is available for septic repairs that subsidizes up to forty percent (40%) of the cost for a septic repair with maximum of $6,000 credit.  This credit provides a significant reduction to the homeowner's cost for septic repair.  If the septic repair costs $15,000, the homeowner can recover $6,000 as tax reimbursements even if they did not pay any income tax.  This brings the effective cost for the septic repair down to $9,000. 

Self-financing Repairs

Often property owners do not have ready cash to pay for their septic system repairs.  Common options for self financing include:

  • Re-mortgaging or obtaining a second mortgage on the property
  • Obtaining a Line-of-Credit for the property
  • Obtaining a Bridge loan for a property being sold

Local banks can usually offer the most flexible terms for obtaining credit.    A line-of-credit has the advantage of allowing the property owner to pay interest only for an extended period of time.   If the septic system repair is conducted for a property being sold, the line-of-credit can minimize the cost to the property owner.  This allows some breathing room if a property sale does not go through in a timely fashion.   Currently, interest rates are low and re-mortgaging or line-of-credit are reasonable alternatives for financing a repair. 

Any interest paid on loans for septic repairs may be tax deductible, contact a tax consultant.