FHA - Septic/Well Question

[The Bob]

I have a FHA Appraisal. The homeowner does not know where the septic field is located. She has no records (surverys/plat maps) of the subject. How am I to tell where this is? Who has this information? Please help

Here in VA you can call the County Health Dept and request a copy of the septic permit that will show you where the drain field is.

 

[Steer]

tmeyer,

What Rex said. I just passed on the exact E-mail that I recived from FHA HOC, and the lender has not responded after nearly a week. On mine, the well head was covered, and the leach field was not visable (new construction still doing ground work; house was finished).

Lender wanted me to "definitively state that the well and septic systems complied with FHA minimum standards." The town office had no records or plans on file--pretty common for Maine small towns

 

[RSW]

Also, how do we know what it cost to hook-up to city utilities if they are available? Who has this information?

We are only required to report if it is feasible and are not to provide a cost to connect. The lender is required to get that information.

 

[CANative]

We are only required to report if it is feasible and are not to provide a cost to connect. The lender is required to get that information.

We're not even required to report if feasible. That's a lender responsibility. We only report on availability...

Subject property uses a private, on-site sewage disposal system. There is no public sewage system in this community.

Subject property uses a private, on-site sewage disposal system. This community has a public sewer system and a connection is available to the subject property. Lender to determine feasibility.

 

[Mike Boyd]

That's just the permitting and cost of connecting to the sysystem.

What about when the main is 100 feet or 300 feet from the property? Or on the next block? Trenching and pipe laying can cost more than $100 per linear foot.

You answered that yourself. YOU report the availability and distance plus the hook up fees. The UW decides whether or not to require it.

Location of well, septic tank, leach field should be on file with the local health department. If not, then you call for a survey.

 

[c w d]

Thanks. I emailed the link and a piece of my mind to Q.

Damit Greg! You're not supposed to know what you're doing. Do you know how pliable an appraiser is who doesn't know what they're doing? There's no I in TEAM, Greg, no I at all........

 

[CANative]

You answered that yourself. YOU report the availability and distance plus the hook up fees. The UW decides whether or not to require it.

Nope. Just is there a public connection available. Unless you want to volunteer the information, it is the lender's responsibility to determine feasibility.

FHA requires the lender to be familiar with the market areas in which they lend.

 

[Caterina Platt]

Damit Greg! You're not supposed to know what you're doing. Do you know how pliable an appraiser is who doesn't know what they're doing? There's no I in TEAM, Greg, no I at all........

God bless you, Greg! Someone needs to tell them they're in error.

When Quantrix sent that email, I understood it was Citi's requirements for FHA. It was not meant to state this is for all FHA appraisals done for Quantrix, merely that Citi has more stringent requirements that, in my mind, go beyond the scope of the appraisal. I made a mental note not to accept FHA appraisal assignments from Citi since they seem to have added their own more stringent requirements.

I'm not digging up the leach field, I don't do 'scratch and sniff' and I'm not a surveyor. I find the evident well and septic, click my Disto to determine the distance from the house, and provide those numbers on the sketch. If I note the well and septic are in possibilty of being to close for local environmental code adherance or FHA's requirements (which are less strict than our local, BTW), I state so.

The Improvement Location Report should provide the locations of the well and septic in relation to the lot lines. That, my friends, is what a surveyor does. If it's obvious that the well head is 2' from the fence, I'll make note that it appears so, but I'm not about to make a determination that the fence is indeed the lot line.

 

[CANative]

Cat..

Here is the text of what I received. I put some items in bold. The email starts off by telling us of "FHA errors" which implies to me that these are things the appraiser has done incorrectly for an FHA report. The email also specifically points out what is Chase's policy. Some items like the 18" crawlspace deal appear to be a misreading of the entire protocol for FHA scope of work. The actual passage in App. D states 18" is highly recommended but not mandated. Now their FHA newbies are going to be calling for repair when a repair might not be necessary. This may either cost a borrower a lot of money needlessly or needless rejection of the loan.

Some of the items completely contradict FHA policy and protocols.

Dear Appraiser,

Chase Underwriters are reportedly seeing large numbers of the same FHA errors on the completed reports. Here is a list of the most common noted errors.

Common Errors that need Corrections for FHA Appraisals

• You are not permitted to contact borrower or proceed with the FHA order until you receive the FHA case number. (Chase’s Policy)

• The assigned appraiser on the order must inspect, complete and sign the report. Only one signature is permitted on FHA appraisals. Supervisory signatures are not permitted.

• Street address, city and county must match the FHA connection.

• Reports may not be submitted without the case number.

• Photos need to show all sides of the subject property.

• Provide the distance between well and septic, distance of each from property line and distance of each from the drain field. The appraiser must also comment if well and septic are typical for the area.

• If well and septic are present a comment like “subject, well and septic meet FHA minimum standards” must be on the report if applicable.

• If subject property has a well and septic the appraiser must comment if public water and sewer available and if so provide an estimate of the cost to connect.

• Verify and comment if utilities are turned on at the time of the inspection.

• If subject property meets minimum FHA standards a comment must be included in the report.

• Provide height of crawl space if applicable, 18” minimum.

• Chase does not lend on Mobile or Manufactured Homes, if your research or inspection reveals that the property is one of these types, contact Quantrix immediately at 866-284-6791 on how to proceed.

I am also attaching a copy The FHA Special Report on how to properly complete a FHA appraisal report for your review.

 

[Caterina Platt]

Now, there! See how faulty my memory has become lately? Chase, not Citi! Gads. I went back to the same email I'd received.

I read it, and initially had my blood boiling as well, but decided that it was best addressed on my end by simply saying 'no' when Chase/Quantrix came a callin' with the FHA order. (haven't had that occassion yet) I don't agree at all with their interpretations, as you've pointed out.

My favorite is this one: • If well and septic are present a comment like “subject, well and septic meet FHA minimum standards” must be on the report if applicable.

Outside of the distance from property lines and meeting local code requirements, exactly what other FHA minimum standards would those be? Further, I don't dig up septic systems, nor am I qualified to determine of the existing system meets code. I specifically comment if there is an apparent problem and call for an inspection. I can comment on the distance from the dwelling, the well, etc. Outside of that, I'm an appraiser. I'm not a septic expert, and I'm no well driller. I will not open myself up to further liability.

I've done exactly 2 orders for Quantrix and like I said, the 'opportunity' to turn down an FHA has not yet presented itself. I appreciate the heads up on the apparent misinterpretations of the FHA Protocol, and will avoid the fight accordingly.

For those who have to accept such assignments, bless you. I hope it's on city utilities.