On-Lot Sewage Funding Program (PENNVEST)

This article informs homeowners how to obtain low-interest loan financing for the improvement, repair or replacement of their existing on-lot sewage disposal systems.

This loan program is funded by the Pennsylvania Infrastructure Investment Authority (PENNVEST), administered by the Pennsylvania Housing Finance Agency (PHFA), and supported by the Pennsylvania Department of Environmental Protection (DEP).

The Loan and Conditions

All assistance is provided in the form of loans at an interest rate as low as 1.75%. Loans are secured by a mortgage on the borrower’s home. The maximum term of the loan is 20 years and repayment starts within 60 days of the loan disbursement. The loan must be immediately repaid in full if the property on which the project is located is sold or transferred. Loan origination fees will also be charged in connection with the loan.


The low cost financing available under the On-Lot Funding Program can provide an adequate on-lot sewage disposal system and save money at the same time. It is very important that approval of a PENNVEST loan occur before construction begins on any on-lot sewage disposal improvement, repair, or replacement.

Continuing Responsibility

A basic requirement of the program is that home owners keep the upgraded or new on-lot system in good repair, have it pumped regularly, and ensure that it does not malfunction, fail to adequately treat wastewater, or cause a public health hazard. PADEP will help home owners comply with these requirements. Simple common sense and reasonable regular upkeep should be sufficient to avoid any problems. A pumping schedule and reporting requirements will be included in the loan agreement.

Eligibility Requirements

Loans offered under the On-Lot Funding Program are available to all citizens of Pennsylvania, with limited exceptions, as noted below. Information on eligibility requirements is also available by contacting a PENNVEST Participating Lender or your local Sewage Enforcement Officer.

  • Family income – May not exceed $80,613. This is determined using the Adjusted Gross Income from the most current federal income tax returns.
  • Credit worthiness – Financial ability to repay the loan.
  • Loan amount – Maximum loan is $25,000.
  • Project type – Rehabilitation, improvement, repair or replacement of an existing on-lot sewage system located on a single-family lot located on a single-family, owner occupied property that is the owner’s primary residence.
  • Project Type - First-time connection to a public sewer
  • Project location – All areas are eligible unless a community wastewater collection and treatment system is either in place or will be constructed in the next five (5) years.
  • Project cost – Construction fees and costs, permit fees, loan origination fees, and legal fees may be covered.
  • Documentation – All applicable permits, verification from your municipality that a community wastewater treatment system neither exist nor is planned in the next five years, income, and other credit information.
  • The PENNVEST loan must be in second lien position unless the loan amount is not greater than $7,500, in which case a third lien position would be allowed.

How to Apply

  1. First contact a PENNVEST Participating Lender to see if you qualify for a loan. An application fee of $65 will be collected, but it is a reimbursable fee if your loan is closed and disbursed.
  2. If approval is given, contact your local municipal officials (city, township, or borough office) and have them sign a standard form certifying that your proposed project is not in an area that is currently served by public sewers and will not be served by public sewers within the next five (5) years.
  3. Once this is completed, contact the Sewage Enforcement Officer (SEO) serving your municipality to determine if a repair or replacement of your on-lot sewage is permissible under all applicable Pennsylvania regulations.
  4. Have the SEO or a Professional Engineer (PE) design your system. The designer must certify that the proposed system is the most cost-effective system for your property.
  5. Have the SEO review the design, and if acceptable, issue a permit for the system. Where conditions are not suitable for a standard or alternate disposal system, small flow treatment systems with a discharge may also be eligible. In these cases a PE must design the system and it must be permitted by DEP.
  6. Obtain bids from contractors who could do the work you are considering; at least three (3) responsible, written bids are recommended.
  7. Once all of the above steps have been completed, take the permit application, permit, bids, and the certifications from both the designer and municipal officials to the participating lending institution you contacted in Step 1 to complete your application for funding. That institution may request additional information and documentation.


If you need to repair, replace, or upgrade an on-lot sewage disposal system serving your primary residence or you connecting to public sewer for the first time and you are not sure how you will pay for this system, consider a PENNVEST loan. Contact PENNVEST, PHFA or your SEO for more information.

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On-Lot Sewage Funding Program (PENNVEST)



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Contact Information

Albert Jarrett
  • Professor Emeritus
Phone: 814-238-0195