Septic Replacement Loan Program

The Septic Replacement Loan Program makes available financing solutions for Michigan residents to address failing septic systems across the state. The program operates through a two-tiered lending structure designed to serve households at different income levels. Tier 1 provides low or no-interest unsecured loans to income-limited households through a dedicated Loan Application and Origination System, while Tier 2 employs a market-based approach with a loan loss reserve for households exceeding Tier 1 income thresholds. These loan products are administered in coordination with authorized lenders, local health departments, and septic contractors to ensure compliance with local permitting requirements and state program guidelines. The initiative directly addresses the critical infrastructure challenge posed by an estimated 130,000 to 325,000 failing septic systems among Michigan's 1.3 million total septic installations.

The Michigan Saves, Inc., a nonprofit organization headquartered in Lansing, serves as the prime contractor for this indefinite delivery vehicle, under the Department of Environment, Great Lakes, and Energy. The contract period extends from May 23, 2023, through May 22, 2026, with two available one-year renewal options at the State's sole discretion. The estimated contract value totals $30,000,000, comprising $24,000,000 allocated to Tier 1 programming and $6,000,000 designated for the Tier 2 loan loss reserve. Michigan Saves, Inc. will provide quarterly financial reporting and annual program outcome reporting, with payments made via Electronic Funds Transfer on a quarterly draw schedule.