Throwing a lifeline to fix failing septic systems

“Out of sight, out of mind,” goes the expression, but ignoring septic systems that treat millions of gallons of sewage each day threatens the pure Michigan waters we all rely on for drinking, recreation, habitat, and more.

Now, the new Septic Replacement Loan Program (SRLP), which provides low-interest loans, is available to help Michigan homeowners with the high costs of repairing or replacing failing septic systems.

In Michigan, more than 1.3 million septic systems, also known as onsite wastewater treatment systems, treat wastewater from toilets, sinks, washing machines, showers, and more from homes, businesses, and small communities, before returning it to the environment.

Especially in rural areas where costly public sewer systems are out of reach, septic systems are a cost-effective, long-term option to protect public health and meet water quality goals – when the systems are properly designed, installed, and maintained.

Old septic systems beyond their life expectancy, outdated system designs and installations, improper use or overuse, and lack of maintenance can lead to untreated wastewater rising to the ground surface or into groundwater, potentially exposing people and animals to harmful bacteria and viruses.

Properly designed and maintained septic systems are especially crucial in developments, such as waterfront homes, near environmentally sensitive areas to prevent inadequately treated wastewater from contaminating our waterways.

By some estimates, more than 20% of septic systems in Michigan are failing, threatening public safety, drinking water sources, and the natural environment of our lakes, streams, and rivers.

Help for high costs

For many owners, replacing a failing septic system is a new experience that can be stressful and come with a hefty price tag. It has been estimated that nearly 56% of Americans are unable to afford a $1,000 emergency, and with replacement septic system costs ranging from $8,000-$30,000, Michigan homeowners need solutions. Historically, resources to help cover the costs of a septic system replacement have been few.

In May 2024, Michigan launched the SRLP, the first statewide resource for Michigan homeowners to replace failing and near-failing residential septic systems through low-interest loans.

The Michigan Department of Environment, Great Lakes, and Energy (EGLE) developed the SRLP after Governor Gretchen Whitmer signed Public Act 53 in March 2022, allocating $35 million to EGLE’s Onsite Wastewater Management Unit for such a program. To implement the program, EGLE partnered with Michigan Saves, the nation’s first nonprofit green bank.

The SRLP offers low-interest financing on loans of up to $50,000 to Michigan homeowners needing to replace their failing or near-failing septic systems. The program is divided into two tiers of financing with both an income-based loan and a market-based loan:

• Tier One loans offer a fixed 1% interest rate to those who meet the income-based eligibility guidelines.
• Tier Two loans offer standard market-based loans for those homeowners with incomes that exceed the Tier One requirements.

To qualify for the program, the replacement septic system must be permitted by the local health department in accordance with the SRLP minimum standards for design and installation, and it must be installed by a Michigan Saves Authorized Septic Installation Contractor. There are currently over 150 Authorized Contractors available to homeowners statewide.

This collaboration ensures that supported replacement septic systems funded by the SRLP are designed and installed in accordance with industry best practices and protect both public health and the environment.

Making a difference

Since launching, the program approved more than 220 loans totaling more than $3.8 million in funding. As of June 30, 2025, 184 septic systems had been installed, approved by the local health department, and funded by EGLE through Michigan Saves.

 The program’s early success has resulted in an estimated 25,000,000 gallons of sewage annually now being safely and adequately treated so clean water can reenter the environment.

EGLE and Michigan Saves are excited to continue connecting Michigan homeowners with financial resources through this program while protecting Michigan’s water resources and safeguarding the well-being of residents, visitors, and the water in our great state.

Dig into details

Learn more about septic systems at EGLE's Septic Smart web page. For more about the SRLP, visit MichiganSaves.org/Septic.

Adapted from an article by Anne Mitchell of the Michigan Department of Environment, Great Lakes, and Energy (EGLE) in the 2024 Michigan State of the Great Lakes Report.