| Financial help is available for all homeowners faced with the
need to repair a failed septic system to meet the Commonwealth's
Title 5 requirements. Through a combined effort of the Department
of Environmental Protection, the Massachusetts Department of Revenue,
and the Massachusetts Housing Finance Agency (MHFA), below-market-rate
loans are now available.
Homeowner Septic Repair Loans are available to eligible homeowners
at low interest rates of 0%, 3%, and 5%, depending on income, for
loans ranging in size from a minimum of $1,000 to a maximum of $25,000.
Participating Lenders
All lenders who have been approved by the MHFA to particiapte
in the Home Owner Septic Repair Loan Program. See enclosed list
for lenders in your area.
Contact
Call the MHFA at (617) 854-1020 or (617) 854-1333.
Program Requirements
| Borrowers |
All owner-occupants of 1-4 family homes and
residential condominiums with failed sewage disposal systems
whose income does not exceed Program Income Limits. Borrowers
must meet lenders' internal credit guidelines. |
| Property Type |
Single-family homes, 2-4 family homes, residential
condominiums, and condominium associations. |
| Activities |
All costs associated with sewage disposal system
repairs or sewer connections. |
Loan Terms
| Amount |
Minimum: $1,000
Maximum: $25,000
|
| Terms |
Amortizing; 3-20 years, based on size of loan.
Paid in full upon sale, refinance, or transfer. |
| Interest Rate |
Loans are fully amortizing at interest rates
of 0%, 3%, or 5%, depending on household income. |
| Maximum Loan-to-Value |
Loans are credit based, not equity based; maximum
loan-to-value ratios are not applicable. |
| Points |
"0" points
|
| Security |
All loans are secured by a subordinate
mortgage; nonassumable. |
| Insurance |
Hazard Insurance on each property;
Flood insurance is applicable. |
| Debt-to-Income |
The maximum debt-to-income ratio
is 50% of borrower's gross income. |
| Appraisal |
No appraisal of the property is
required |
Loan Application Process
| Where to Apply |
Borrowers apply for financing through MHFA-approved
lenders. |
| Required Forms |
FHLMC#703 / FNMA#1012 plus other program-specific
forms which will be provided by the participating lender. |
| Additional Documentation |
Plans/specifications approved by local Board
of Health as evidenced by a Disposal System Construction Permit;
Sewage Disposal System Inspection form; contract with firm price
and Contractor's Mass. Registration number; Certificate of Compliance
by local Board of Health upon completion |
Homeowner Septic Repair Loan Program
- A Step-By-Step Guide
1. Homeowner discovers septic system failure and obtains subsurface
disposal system inspection.
2. Homeowner obtains repair contract and construction permit.
3. Homeowner submits loan application and Board of Health
approved plans to lender.
4. Lender determines income eligibility.
5. Septic loan underwritten.
6. Loan(s) closed; funds in escrow.
7. Loans sent to MHFA for purchase.
8. MHFA pays $500 fee to lender.
9. Septic system repairs completed; Certificate of Compliance
issued by local Board of Health.
10. Certificate of Compliance sent to MHFA by lender.
Income Limits for 0% Loan
Family Size
| 1-2 Persons |
3 or more |
| $23,000 |
$26,000 |
Income Limits for 3% Loan
Family Size
| 1-2 Persons |
3 or more |
| $46,000 |
$52,000 |
Income Limits for 5% Loan
| 1-2 Persons |
3 or more |
| $92,000 |
$104,000 |
| 
