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Septic System Upgrade Financing Options – Information from the Town of Westport Board of Health
The Westport Board of Health local septic regulation was recently amended to extend the deadline for cesspools to be upgraded to meet current Title 5 standards to February 1, 2028. The Board of Health heard concerns about the financial impact for many homeowners and voted to grant up to two extra years for the upgrade to be completed.
There are several loan programs available to homeowners needing to upgrade their cesspool or failed septic system. The information below gives details on the different options.
Community Septic Loan Betterment Program:
This program for repair of failed systems and is administered by the Town, with the interest rate at 5% for up to $25,000.
The homeowner enters into a Betterment Agreement with the Town to pay back the loan over a period from 5, 10, 15, or 20 years, at the homeowner’s choice. The betterment is placed as an additional line item on your real estate tax bill. To be eligible for a loan, the borrower’s annual income cannot exceed $150,000. Homeowners obtain the estimated costs and choose from among the contractors who bid on the project.
Board of Health 1% Loan Program for Low/Moderate-Income Homeowners:
This option is available to low to median-income residents whose system upgrade includes nitrogen reduction technology.
This program is also structured as a betterment, similar to the Community Septic Loan program, for homeowners who meet the income criteria and install nitrogen reducing technology.
For either of these programs contact Nelia Williams at williamsn@westport-ma.gov OR call 508-636-1035. Application forms are at: https://www.westport-ma.com/board-health.
MassHousing Septic Repair Loan Program
0 to 2.5% interest financing through participating banks to help income eligible homeowners address a failing or non-compliant septic system.
The Mass Housing septic loan program provides up to $25,000 loans at 0% for borrowers whose income does not exceed $63,800. Repayment is deferred until home’s sale, transfer, or refinancing. The program also provides 2.5% loans for 15 years for homeowners with income up to $127,700. The loans are administered through participating lenders, including BankFive in Fall River and First Citizens' Federal Credit in Fairhaven.
More details are at: https://www.masshousing.com/home-ownership/homeowners
NEWLY ENHANCED SEPTIC TAX CREDIT FOR 2023:
The recently enacted Massachusetts Tax Relief law provides up to $18,000 as a tax credit available to homeowners who upgrade their failed residential septic system.
The septic tax credit is a reduction in the homeowner’s personal tax obligation after all other exemptions are taken. The total amount of tax credit available is capped at $18,000, three times the amount available under the prior law. The credit that can be taken annually is now up to $4,000. Any excess credit above the annual threshold can be carried over each year for an additional five years up to the $18,000 total cap. The issuance of a Certificate of Compliance for the system upgrade starts the tax year when the credit can be taken. Further details on the septic tax credit will be forthcoming in a Department of Revenue guidance document.
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