Community Water System And Shared Wells

[JSakin]

Hello,

We are currently trying to find a home and finance it through an FHA Loan. And I know that with a home that has a "Shared well" can not have more than 4 homes on one well. The only problem we are running into is that most of the homes around where we are looking are all on Shared wells of 8 homes. A specific home we are looking at is inside a Subdivision that is Ran by a HOA that has a Corporation License. They built a Community Water System to supply the homes in the subdivision but that System is then transferred to Shared Wells throughout the subdivision and then shared by 8 homes. The community Water System is Owned Controlled and Maintained by the HOA Corp. but each Shared well has an agreement between the 8 homes. So I guess my question is would this be considered a Community Water System or a Shared Well by an FHA Appraiser? I'm so confused....and can not seem to get an answer from anyone or anywhere. Please any help would be appreciated.

 

[AJL118]

http://www.fhanewsblog.com/2015/11/...equirements-in-HUD-4000-1-water-supply-wells/

 

[JSakin]

Yes Thank you. But I have already read all that. But I am wondering what would this be considered......a Community Water System or a Shared Well?

 

[JSakin]

Is the Shared Well techinically a "connection" to the Community Water System?

 

[JTip]

Check the other home's deeds/mortgages and see how they got financed/which local lender they used. I wouldn't be afraid to knock on some doors to gather this info too.

With the limited info you provided, I don't think it's going to fly with FHA.

 

[boardman]

i had something like that once; you can make the appraisal subject to lender/client obtaining the copy of the original permit to determine its source. Typically a health department or public works; or when the home was built; home was issued a water/septic or permit to allow it to have potable water for building. in my case appraisal the permit allowed them to connect to a "community well" which we all found was a formed association covering a shared well for groundwater. That is actually a "private" source so checkbox was private and community well was the description. Not my problem.

 

[JSakin]

Thanks boardman. I looked at the covenants of the HOA and it states:

"Developer, Will cause to be constructed and installed a gravity-flow drainage system and water well system servicing all lots in "M****** Subdivision and any additions thereto. Upon completion of construction and installation of the same, the supervision, management, and control of said systems shall be vested in "M****** Homeowner's Association, Inc.

Lot owners will grant M****** Homeowner's Association, Inc. and its contractors the right to enter upon lots as may from time to time be necessary in maintaining, repairing, servicing and replacing all or any portions of the gravity-flow drainage system and the water system, whether in a platted easement or not.

Lot Owners will share equally in the expense of servicing the Well which provides water to their lot and that part of the water system servicing their lot, including the expense of maintenance, repair, inspection, replacement and power. Each lot owner will at its own expense pay all costs incurred in maintaining and replacing that part of the water system located on the owner's lot, excluding, however, such part of the water system which may be located in any easement area. "

Sounds like a Community Water System, right?

 

[boardman]

yup, sounds like they own it and maintain it; there is also some kind of HOA fee then that would be added to page 1 of the report and MAY be a special assessment for its connection. It states "well system" so it would be community "well" to be more exact

 

[Mr Rex]

You probably need to contact your local health department or whatever local government entity has jurisdiction over wells to determine whether the well is considered a shared well or community water system. Typically a "community water system" must be professionally maintained and tested regularly per state requirements.

Here is what USDA requires for a Community Water System:
3. Community Owned If the property is served by a community water system operated by a private corporation or nonprofit property owners association, the lender must ensure the following conditions are met.
 The system and the water supply meet all applicable Federal, State and local requirements.
 The system has the capacity to provide a sufficient water supply during periods of peak demand.
 The system is operated under a legally binding agreement that allows interested third parties to enforce the obligation of the operator to provide satisfactory service.