Financing Brochure 2C 08:Financing Brochure 2C 05
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®
Funds are available for repairs to improve or modernize a home, or to
remove health and safety hazards. This loan is a 1% loan that may be
repaid over a 20-year period.
As long as money is available and the applicant meets the income
requirements, the Rural Housing Service is able to make grants or, in
the case of those younger than 62 or with higher incomes, low-interest
loans. Income testing varies across the nation based on local averages,
so be sure to discuss your eligibility with the Rural Housing Service.
To learn how to apply, visit www.rurdev.usda.gov/recd_map.html,
then click on your state and look for information on programs, or call
the Rural Housing Service in Washington, D.C., at 202 720.5177 if you
can’t find a nearby office from your local phone directory.
You should confirm what your homeowners or flood insurance
will cover should your well be flooded. The well, including the
pumping system, may be outside the home. Often, wells are not
covered by homeowners or flood insurance. Some items not insurable by insurance may be paid for under the Federal Emergency
Management Agency’s (FEMA) Individual and Households Program,
provided the assistance will bring your home to a habitable condition. Items included under this program can include wells. After an
applicant has registered with FEMA, an inspector will contact the
applicant within 24 to 48 hours to make an appointment.
Financing Your
Water Well System
State Government Assistance
Some state agencies, such as the state health department, may
have programs to assist in upgrading existing household water well
systems.
Other Sources
Sometimes an existing well has unfortunately been unintentionally impacted by some other action, such as controlling insects in
farm fields. Some pesticide manufacturers have offered financial
assistance to private well owners if it is determined that their
products have contaminated a well’s water above safe health-based
levels. Only local health officials and the company’s representatives
can assist in these circumstances.
601 Dempsey Road
Westerville, OH 43081
800 551.7379
www.ngwa.org
www.wellowner.org
This brochure is provided by your professional ground water contractor and
NGWA. The contents of this brochure are for informational purposes only and
should not be relied upon as legal, financial, or tax advice. Consult a qualified
legal, financial, or tax professional before making any contractual commitment.
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Financing Brochure 2C 08:Financing Brochure 2C 05
Congratulations!
You're about to make an investment in a long-lasting, dependable,
highly engineered household water
system, perhaps the most significant infrastructure system to your
home because it provides safe and
plentiful water—the sustenance of
living. This brochure provides you
with ideas on how to best pay for
this important home investment.
Hiring a Contractor
For something as important as your household’s water supply,
never make your choice with your cost being the deciding factor.
Skills, experience, and equipment will come together to provide you
the best possible water well system at a fair price. Check with your
local water well construction regulatory agency, your local consumer
protection office (listed in the blue pages of your phone book), or
the Better Business Bureau before you make your final selection of
a contractor. A very good source for finding a local water well or
ground water contractor is at the consumer information Web site
maintained by the National Ground Water Association (NGWA).
Log on to www.wellowner.org and use the contractor lookup feature
to find an NGWA member contractor or NGWA-certified contractor
in your area. Call NGWA at 800 551.7379 if you need help.
The Contract
Always have a written, detailed contract. Unless you know what
each contractor will do for his specified price, you cannot compare
offers and decide which one to hire. (NGWA makes available standard contract forms to its members.)
Never sign a contract or loan with blanks left unfilled. Never pay
in full before the work is completed to your satisfaction. You should
anticipate making a partial payment to the contractor before work
begins. If the contractor came to your home to get your business,
you have three business days to cancel the contract without penalty.
If your contractor provides financing or helps you obtain financing
for their projects, they’re subject to the Truth-in-Lending Act.
Federal truth-in-lending laws also give you a three-day cancellation
for loans secured by your home. You have additional protections if
your loan has high rates or fees.
For a drilled well, the contract may include:
• Liability insurance coverage held by both the owner and
the contractor
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• Statement that all work will comply with applicable
regulations and codes
• Diameter of the well and wall thickness of the well casing
to be used
• Type of well development and yield evaluation procedures used
• Type of screen installed, where needed
• Type of well cap or seal used
• The disinfection procedure
• Cleanup, including all material abandoned at the drill site
• An anticipated start date for drilling
• Guarantee of materials and workmanship
• A provision that the contractor will do the work and
correct the initial work, if necessary
The contract should itemize charges. Itemization may
include the cost of:
• Drilling per foot
• Casing per foot
• Other materials, such as drive shoe, grout, and well cap
• Other operations, such as grouting, developing, test
pumping, and disinfection
• Drilling deeper and/or second well to ensure an
adequate water supply
• Abandonment and sealing should it prove necessary
• Anything not included in the specification
Get the most from your contractor by:
• Trusting the contractor in solving any difficulties
• Discussing unforeseen costs with the contractor
• Exploring options with the contractor, if original plans
change
• Expecting no free labor if the well doesn’t meet expectations
Cash
Of course, cash is always acceptable to a professional contractor.
Insist upon an itemized receipt, as well as a copy of the well log or
well construction report that a contractor typically prepares for his
own records, and oftentimes for a local or state government oversight agency.
Borrowing Money
If you need a loan, you need to shop for the best possible one
for you. Promises of low monthly payments may not show the
total costs of borrowing money. Before you sign anything, get
several estimates for the work. Get separate estimates for the
financing.
Get legal or financial advice before you make any loan decisions.
Your local Fair Housing Office, Legal Aid Office, housing counseling
agency, or Area Agency on Aging may be able to help.
Contractor-Offered Financing
Under certain circumstances, your contractor may be willing
to negotiate with you terms by which you’ll pay him for his skills,
experience, equipment, and the components used in your new
water well system. Remember, he and his company are professional
contractors above all else, and not a financing company.
Credit Card
While not all ground water contractors accept credit cards,
yours may. Be aware of your credit card’s interest rate and repayment terms before you use your credit card.
Mortgage Options
Your water system is more essential to your ability to live in
your home than any other feature it may have. Ask your mortgage lender to review your contractor’s written price quote and
to include those costs within your mortgage. You’ll pay for your
household water well system over the life of your mortgage loan
in your monthly payments. If refinancing, be sure to figure in the
added costs for that, as well. If you’re age 62 or older, you may
wish to consider a reverse mortgage.
Home Equity Improvement Loan
Home improvement loans cover the addition of any permanent
fixture to the home or property, such as a well system or water
conditioning/treatment equipment. A home equity loan is an
excellent source of home improvement financing for remodeling
or repair projects. Low interest rates, flexible loan terms, and taxdeductible interest make a home equity loan a practical choice
for your home improvement financing. Your potential lender will
ask you to complete an application form. The lender will conduct
a credit check on you, and if everything checks out, you'll quickly
learn if your loan has been approved. You’ll sign a note, which is
payable to your contractor.
Line of Credit
If you intend to borrow a relatively small amount, and pay
back the principal quickly, a line of credit can cost less than a
home equity loan. A line of credit also provides flexible home
improvement financing with the convenience of using money
in variable amounts as needed.
Federal Government Assistance
Another way for low-income and/or elderly customers to
construct or repair their household water well system is with
federal assistance.
Rural Housing Repair and Rehabilitation Loans,
often referred to as 502/504 loans or grants,
from the Rural Housing Service of the
U.S. Department of Agriculture are available to very low-income
rural residents who own and occupy a dwelling in need of repairs.