FHA and 300' storage tank rule

[Overimprovement]

Appraised my first home today that was obviously within 300' of a gasoline station (basic C-store type). I was aware of the rule, but wanted to be absolutely sure before I reported a MPR deficiency.

To my surprise, it appears that the wording in 4000.1 conspicuously states ABOVEGROUND and no longer subsurface. I will post the verbiage below, bold is mine. This is from 10/24/2019 revision. This is chapter 2, D, 3, (c), (7).

So has anyone run into this issue since whatever update changed this? Is it really ONLY aboveground stationary tanks that HUD is concerned with (propane not withstanding). Am I correct in reading this that other than opining on market value impacts from the location/view of the gas station, that there are no actual MPR issues at play and no mention of the 300' rule is necessary (gas station did not have any above-ground tanks)?

(7) Stationary Storage Tanks

If the subject property line is located within 300 feet of an aboveground, stationary storage tank with a capacity of 1,000 gallons or more of flammable or explosive material, then the Property is ineligible for FHA insurance, and the Appraiser must notify the Mortgagee of the deficiency of MPR or MPS.

 

[glenn walker]

You Do not know ? Normally Cities or Counties do not allow a permit if this is the case--So you report what you see YOU are probably wrong and the tanks are not or may even be behind the station - In 90% of what I encounter the appraiser sees a gas station and freaks -- Just report the location and throw it into their court--Honestly almost 85% of the time it is not 300 Feet -or the City-Or County permitted it

 

[Dublin ohio]

(7) Stationary Storage Tanks

If the subject property line is located within 300 feet of an aboveground, stationary storage tank with a capacity of 1,000 gallons or more of flammable or explosive material, then the Property is ineligible for FHA insurance, and the Appraiser must notify the Mortgagee of the deficiency of MPR or MPS.

It says what it says. Don't see the problem.

 

[bnmappraisal]

I have not run across a property within 300 ft of a tank since before the 4000.1 so I guess I agree with Dublin above ... that would be my take on the verbiage
Subject meets MPR/MPS based on nothing aboveground within 300 ft

 

[CANative]

You should probably discuss it briefly and comment on signs or lack of signs of soil contamination. Just to be HUD-ly.

xii. Soil Contamination

The appraiser must check readily observable evidence of hazardous substances in the soil. Conditions that indicate soil contamination include: the existence of Underground 10 Storage Tanks (UST) used for heating oil, pools of liquid, pits, ponds, lagoons, stressed vegetation, stained soils or pavement, drums or odors.

The appraiser must note the proximity to dumps, landfills, industrial sites or other sites that could contain hazardous wastes that may have a negative influence on the marketability and/or value of the subject property.

xiii. Residential Underground Storage Tank

The appraiser must note any readily observable surface evidence of USTs, such as fill pipes, pumps, ventilation caps, etc. The presence of a UST does not automatically trigger an inspection requirement. If there is readily observable evidence of leakage or on-site contamination, the appraiser must make a requirement for further inspection.

 

[Overimprovement]

If you peruse prior threads on this forum on this subject, everyone seems to be of the opinion that even subsurface tanks fall into the 300' rule. In fact, every online search seems to feel the same way.

The point I am making is the current regs APPEAR to only reference aboveground tanks. My question was if anyone can confirm this is true from experience.

I understand the appraiser ONLY observes, and does not decide eligibility. The question, if any still exists, is since subsurface apparently is no longer mentioned in the regs, why would it even need mentioning in the report?

 

[Overimprovement]

You should probably discuss it briefly and comment on signs or lack of signs of soil contamination. Just to be HUD-ly.

I guess including the same snippet I did here might be a good plan too, in case any underwriters still have the "gas station equals automatic not eligible" mentality.

 

[bnmappraisal]

I defer to CAN on this one ... YMMV

 

[Terrel L. Shields]

the current regs APPEAR to only reference aboveground tanks.

I think that was a fairly recent change and the 1,000 gallon was in response to a lot of people who have 1,000 gallon propane tanks within 300 feet of their houses.

 

[Tim The Enchanter]

I was wondering how big is a 1,000 gallon propane tank.
Almost 16' long according to this.