                                 CODE OF VIRGINIA

ELIGIBILITY FOR BETTERMENT LOANS TO REPAIR OR REPLACE FAILING ONSITE SEWAGE
SYSTEMS (§ 32.1-164.1:2)

A. The Board shall establish a betterment loan eligibility program to assist
owners with the repair, replacement, or upgrade of failing or noncompliant
onsite sewage systems, and the Board may identify sources for betterment loans
to be provided by private lenders, directly or through conduit lenders. In
addition, owners may also apply to the Department for betterment loan
eligibility to upgrade an onsite or alternative discharging sewage system that
is not failing, provided such upgrade is for the purposes of reducing threats to
public health, and ground and surface waters, including the reduction of
nitrogen discharges.

B. Upon determination by the Department that the owner has one or more onsite
sewage systems that are out of compliance with those regulations promulgated
pursuant to this chapter, or in need of repair or replacement, the owner shall
follow the requirements in the Board&#8217;s regulations to initiate the repair
or replacement of such systems. If the owner desires to be qualified by the
Department to receive a betterment loan, at any time before the repair or
replacement is completed, he shall provide the Department with an estimate of
the approximate cost of such remedial work, which the Department shall accept.
The issuance of a permit by the Department to repair or replace an onsite sewage
system, combined with an estimate provided by the owner to the Department, shall
demonstrate eligibility for a betterment loan. Upon a determination of
eligibility, the Department shall notify the owner in writing. If the Department
refuses the request for an eligibility letter, the owner may appeal the refusal
to the State Health Department Sewage Handling and Disposal Appeal Review Board.
It shall be the sole responsibility of the owner to secure the betterment loan
from or through a private lender. Local health departments may provide a list of
lenders available for this purpose. Nothing in this section shall be construed
as allowing construction or modification of an onsite or alternative discharging
sewage system without a permit issued by the Department.

C. Betterment loans made pursuant to this section shall be recorded in the deed
book of the circuit court clerk&#8217;s office for the locality in which the
land is located and an abstract of the loan and betterment loan eligibility
letter issued by the Department shall be indexed in the name of the owner.
Betterment loans made pursuant to this section may be recorded in increments by
the private lender as the repair or replacement of the onsite sewage system is
completed, provided that in no event shall the total amount recorded exceed the
estimate provided to the Department, without the Department approving an
amendment to the repair permit, and issuing a revised betterment loan
eligibility letter. The Department may, subject to appropriate waivers for
economic hardship, charge the owner a fee not to exceed $50 for each betterment
loan eligibility letter request made by an owner. The Department may require
that the owner or private lender provide the Department with proof that any
betterment loan has been recorded in the deed book of the circuit court
clerk&#8217;s office for the locality in which the land is located.
			The incurrence of a betterment loan pursuant to this section shall not be
considered a breach of limitation or prohibition contained in a note, mortgage
or contract on the transfer of an interest in the owner&#8217;s property.

D. Where agreeable to the private lender and the conduit lender, if any, a
locality may act as the collection agent for the payments made by the owner on a
betterment loan. Any such payments collected by the locality shall be deemed to
be held in trust by the locality for benefit of the private lender and conduit
issuer, if any. The locality may receive a fee payable by the private lender or
conduit loan provider, if any, for such service not to exceed one-eighth of one
percent of the payments collected.

HISTORY: 2009, c. 829.