Local Impact
Innovative Clean Water Financing in Rural Communities


Craft3 Septic Project


The opportunity to witness firsthand innovative CDFI and CDE activity in communities across the country is one of the most rewarding aspects of my job. Recently, I was privileged to join Craft3 CEO Adam Zimmerman and Carl Seip, VP of Communications and External Affairs, on a site visit to a Clean Water Loan construction site outside of Tacoma, Washington.

Poor water quality can have dire impacts on people within an affected community, particularly in rural areas, which are often not served by public water systems but rely instead on individual wells to provide drinking water and septic systems to remove wastewater. These systems are in varying states of repair and can often fail to provide safe and adequate service. Studies indicate clean water and wastewater needs in rural areas approach $68 billion, and the needs in small communities (with populations of fewer than 10,000) are nearly $34 billion—a daunting obstacle for communities to overcome.

More than ten years ago Craft3 recognized the depth of these challenges and developed the Clean Water Loan in Pacific County, Washington to help rural homeowners finance the repair or replacement of septic systems. The cost to replace a septic system can be a significant burden on a family’s household budget, and failing systems can pollute the environment, threaten public health, and negatively impact local industries reliant on clean water. Craft3 has since invested more than $21 million into the loan program, and has expanded the program with the support of state and local governments and private funders throughout much of Oregon and Washington.

Uniquely, they’ve structured the loan in a way that makes it particularly accessible to low- and moderate-income households, and others with credit challenges. Depending on their income, an applicant may be eligible for a reduced interest rate or deferred payments. As a result, four in ten Clean Water Loan borrowers are low-income. The availability of loans like this help keep families in their homes when they don’t have other viable options. The Clean Water Loan construction site we visited underscored this simple fact.

In one particular case, a homeowner had a series of unexpected home repairs including expensive plumbing, roofing, and the installation of a new furnace. When the family’s septic system failed, they found Craft3. Though the family had good jobs, obtaining financing was a challenge. Craft3 provided an affordable solution for their unique situation. The Clean Water Loan allowed them to get a new system installed before the rainy Northwest winter.

I have always been proud of the breadth of impact that CDFIs make—on everything from large tax-credit community facilities to small-scale entrepreneurs. It was a special moment to stand next to the homeowner as we watched a bulldozer digging into the side of a hill for her new septic system. Her relief was palpable. It is a reminder that building resilience takes many forms, and CDFIs are at the forefront.

Annie Donovan is Director of the CDFI Fund

  1. “Clean Watersheds Needs Survey 2012-Report to Congress,” U.S. Environmental Protection Agency. January 2016.