New loan program launched to replace failing septic systems

In an effort to protect groundwater quality, and assist homeowners with the high cost of replacing septic systems, Washington County has unveiled a low-interest loan program. 

The program will use funds from the Minnesota Department of Agriculture’s Agricultural Best Management Practice program, by serving as a local lender. The program is available to county homeowners with noncompliant septic systems. Interest rates range from 1.5 to 3 percent, which ABMP program director Dwight Wilcox said would save an average homeowner between $2,000 and $3,000 in interest charges on a new septic system. Applicants can choose five-eight-or 10- year term options.

Loans are made on a first-come, first-served basis, with no income or asset restrictions.  

There is also a small pool of cost-share grant funds to assist lower income residents with replacing noncompliant septic systems. Those grants range from $4,500 to $6,000. Wilcox said the typical cost to replace a private septic system is between $12,000 and $15,000 in the Twin Cities.

“We are encouraging people to do it the right way and do it now or pay for it later,” Wilcox said.

The county was awarded $270,000 in funds for the loan program for 2014 and $37,400 for the grant program, said Washington County Department of Health and Environment deputy director Sue Hedlund.

“Replacing a septic system is not a cheap thing to do and we wanted another alternative to help finance them,” Hedlund said.

If the program’s funding is used up, Wilcox said there is an additional $2 to $3 million in uncommitted ABMP funds that can be used for counties that have seen their awarded amounts exhausted.

“We have been able to fund every project within three months,” he said.

Since its creation in 1996, the revolving loan program has doled out $41,000,000 in loans, funding the replacement of 5,324 sewage system projects across the state, according to Wilcox.

The ABMP program obtains 75 percent of its funds from the federal government and 25 percent from the state’s Clean Water Fund.

Lake Elmo community development director Kyle Klatt said the loan program would be beneficial for many homeowners living in areas of Lake Elmo that are not in line for future public sewer system development.

While none of the roughly 2,800 households in Lake Elmo are hooked up to a public sewer system yet, Klatt noted that the development of a standard municipal sewer in the Village area is underway, as well as land slated for development along the Interstate 94 corridor. 

For more information or to obtain an application for Washington County’s new septic system loan program visit and click on financial assistance.

Joshua Nieslen can be reached at or 651-748-7822.


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