Craft3 Receives $20 Million to Continue Clean Water Loans Across Washington

Craft3 has received $20 million from the Washington State Department of Ecology to continue offering affordable loans to homeowners who need to repair or replace failing septic systems. The funding extends a program Craft3 has administered for nearly a decade — one that has helped more than 2,500 Washington households address serious sanitation problems, deployed over $70 million, and served as a national model for what public-private partnerships can accomplish.

When a septic system fails, families face a crisis

About one-third of Washington households rely on septic systems to treat wastewater — more than 300 million gallons every year. Roughly 10% of those systems experience some level of failure annually. When a system fails, the consequences are immediate: sewage backs up into homes, contaminates groundwater, and threatens nearby streams, shellfish beds, and drinking water sources. Repairs are urgent, unexpected, and expensive, often running $20,000 to $45,000 or more.

For many families, that cost is simply out of reach. This program exists on the premise that access to basic sanitation is not a luxury — it's a right. Without affordable financing, a failing septic system can force a family from their home.

Access to affordable financing to repair or replace failing septic systems can be a serious burden for homeowners, especially in rural and underserved communities. Craft3’s Regional Loan Program is critical for households needing help securing funding when traditional lending may not be accessible. This essential program helps communities protect public health and improve the quality of water resources by helping homeowners access the funding needed to address failing septic systems before there is a greater financial and environmental impact. ‍

—Heather Watts, OSS Program Supervisor, DOH

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Rural poverty makes this harder

Septic systems are far more common in rural areas, and rural Washington has some of the state's deepest pockets of poverty. When a system fails in a rural community, families often have no access to a public sewer system to connect to, no nearby bank willing to finance an emergency repair on a modest rural property, and no path forward without help. The Regional Loan Program fills that gap. Roughly 40% of the households this program serves are low-income — people who, without this lifeline, would face an impossible choice between staying in an unsafe home or walking away from it entirely.

A proven partnership

The Regional Loan Program works because it brings together the right partners. The Washington State Department of Ecology and Department of Health provide funding and oversight. Craft3, a nonprofit community lender, underwrites and administers the loans, absorbing the financial risk so the state doesn't have to. And septic contractors across Washington serve as a critical link — they're often the first to recognize when a family needs financial help, and they connect homeowners to the program before a bad situation gets worse.

Since the program launched in 2016, this partnership has completed more than 2,500 projects across Washington. Loans carry affordable interest rates and include an operations and maintenance reserve to help homeowners avoid future problems.

A model for other states

Washington's program works. It protects public health, keeps families in their homes, and safeguards the water quality that communities and ecosystems depend on. The state bears no financial risk — Craft3 underwrites every loan and absorbs any losses. Revolved repayments extend the program's reach overtime.

Washington's decade of results offers a clear blueprint: sustained public investment, channeled through a trusted nonprofit lender, working alongside local contractors and health agencies, produces deep and lasting impact.

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About Craft3

Craft3 is a nonprofit community development financial institution (CDFI) with offices throughout Oregon and Washington. Craft3 finances loans that strengthen communities and protect the environment.  

Learn more about Craft3’s Clean Water Loan Program