                                 CODE OF VIRGINIA

FINANCING THE REPAIR OF FAILED SEPTIC SYSTEMS (§ 15.2-958.6)

A. Any locality may, by ordinance, authorize contracts with property owners to
provide loans for the repair of septic systems. Such an ordinance shall state:

   1. The kinds of septic system repairs for which loans may be offered;

   2. The proposed arrangement for such loan program, including (i) the interest
   rate and time period during which contracting property owners shall repay the
   loan; (ii) the method of apportioning all or any portion of the costs
   incidental to financing, administration, and collection of the arrangement
   among the consenting property owners and the locality; and (iii) the
   possibility that the locality may partner with a planning district commission
   (PDC) to coordinate and provide financing for the repairs, including the
   locality&#8217;s obligation to reimburse the PDC as the loan is repaid;

   3. A minimum and maximum aggregate dollar amount that may be financed;

   4. A method for setting requests from property owners for financing in
   priority order in the event that requests appear likely to exceed the
   authorization amount of the loan program. Priority shall be given to those
   requests from property owners who meet established income or assessed property
   value eligibility requirements;

   5. Identification of a local official authorized to enter into contracts on
   behalf of the locality; and

   6. A draft contract specifying the terms and conditions proposed by the
   locality or by a PDC acting on behalf of the locality.

B. The locality may combine the loan payments required by the contracts with
billings for water or sewer charges, real property tax assessments, or other
billings; in such cases, the locality may establish the order in which loan
payments will be applied to the different charges. The locality may not combine
its billings for loan payments required by a contract authorized pursuant to
this section with billings of another locality or political subdivision,
including an authority operating pursuant to Chapter 51 (&#xA7; 15.2-5100 et
seq.), unless such locality or political subdivision has given its consent by
duly adopted resolution or ordinance.

C. In cases in which local property records fail to identify all of the
individuals having an ownership interest in a property containing a failing
septic system, the locality may set a minimum total ownership interest that it
will require a property owner or owners to prove before it will allow the owner
or owners to participate in the program.

D. The locality or PDC acting on behalf of the locality shall offer private
lending institutions the opportunity to participate in local loan programs
established pursuant to this section.

E. In order to secure the loan authorized pursuant to this section, the locality
is authorized to place a lien equal in value to the loan against any property
where such septic system repair is being undertaken. Such liens shall be
subordinate to all liens on the property as of the date loans authorized
pursuant to this section are made, except that with the prior written consent of
the holders of all liens on the property as of the date loans authorized
pursuant to this section are made, the liens securing loans authorized pursuant
to this section shall be liens on the property ranking on a parity with liens
for unpaid local taxes. The locality may bundle or package such loans for
transfer to private lenders in such a manner that would allow the liens to
remain in full force to secure the loans.

F. Prior to the enactment of an ordinance pursuant to this section, a public
hearing shall be held at which interested persons may object to or inquire about
the proposed loan program or any of its particulars. The public hearing shall be
published twice, with the first notice appearing no more than 28 days before and
the second notice appearing no less than seven days before the hearing, in a
newspaper of general circulation in the locality.

HISTORY: 2013, c. 185; 2023, cc. 506, 507; 2024, cc. 225, 242.