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TeachMeFinance.com - explain Water heated in furnace Water heated in furnace -- Some furnaces provide hot water as well as heat the home. The water is heated by a coil that is part of the furnace. There is no separate hot water tank. Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional medical, legal or financial advice. Information presented at TeachMeFinance.com is provided on an "AS-IS" basis. Please read the disclaimer for details.