FHA - Shared Well & Septic

[IASNY]

Chapter 12 FHA says much about shared wells, but little about shared septic. Can anyone elaborate on FHA guidelines? I'm rather stuck.

This rural property began as a mfg home place on 18 acres with legal well/septic and filed with county. A few years later they built a cottage about 100' in front of mobile. Now they've sold the property and trying to go FHA. They've said not to include the mfg home and have provided separate surveys for cottage/mobile. The well is on cottage site. But, septic and absorption field cross between the two. I estimate septic tank is on mobile site.

What to do? Appreciate your input.

 

[Terrel L. Shields]

Call the Direct Endorsement underwriter. A written agreement is necessary usually when the water or septic is shared. But the explicit answer may not be in the book. The DEU can give you guidance. The mortgagee is the source of the "cure". It is their responsibility. Don't let them browbeat you into making those calls on your own. People trying to save money often make rather dumb decisions. The last thing I would share is septic since someone putting paper towels or disposable diapers in the system can cause a lot of problems all parties pay for.

 

[andrew81]

does it function properly and meet the requirements of the local health department?

 

[IASNY]

does it function properly and meet the requirements of the local health department?

Vacant - so will not be 'testable' until occupied for 30 days....HOWEVER, these are utilized as camps, and I cannot imagine how that will ever allow testing to be completed. Health Dept says 1000 is acceptable as it is an existing system, but ?

 

[IASNY]

Call the Direct Endorsement underwriter. A written agreement is necessary usually when the water or septic is shared. But the explicit answer may not be in the book. The DEU can give you guidance. The mortgagee is the source of the "cure". It is their responsibility. Don't let them browbeat you into making those calls on your own. People trying to save money often make rather dumb decisions. The last thing I would share is septic since someone putting paper towels or disposable diapers in the system can cause a lot of problems all parties pay for.

Terrel, How do I access the DEU? Never have prior. Would the AMC need to do this or me?

 

[glenn walker]

FHA requires the utilities to be turned on so you can operate the mechanical equipment flush toilets etc otherwise you cannot state it meets FHA ( MPR ) minimum property requirements. In your case I would make the report subject to all utilities being on and recommend lender obtain a septic tank certification from a licensed contractor because you won't know if it's in good shape or not unless the home fills up with sewage. When properties are empty or vacant things in tanks tend to harden up and that's often when the septic will fail. FHA will do shared well or septic but like shared driveways or easements they require an-agreement between the parties on how it's to serviced-replaced or repaired and who is responsible ? I have seen as many as 5 houses on a common septic system and if it fails you can be talking mucho bucks to replace.

 

[IASNY]

FHA requires the utilities to be turned on so you can operate the mechanical equipment flush toilets etc otherwise you cannot state it meets FHA ( MPR ) minimum property requirements. In your case I would make the report subject to all utilities being on and recommend lender obtain a septic tank certification from a licensed contractor because you won't know if it's in good shape or not unless the home fills up with sewage. When properties are empty or vacant things in tanks tend to harden up and that's often when the septic will fail. FHA will do shared well or septic but like shared driveways or easements they require an-agreement between the parties on how it's to serviced-replaced or repaired and who is responsible ? I have seen as many as 5 houses on a common septic system and if it fails you can be talking mucho bucks to replace.

Of course the utilities were on at inspection, that's not the issue. The issue is SHARED septic between the mfg and cottage. While FHA guidelines are fairly specific about wells, I don't see anything regarding septic systems. County already said that it is sufficient for 2 residences IF it can be tested (30 days inhabited), but County does not = FHA guidelines. Looking for specifics here if you have them? Thanks!

 

[Terrel L. Shields]

Contact your lender (mortgagee) and they should give you a contact number for the DEU.

 

[Vermonter]

Of course the utilities were on at inspection, that's not the issue. The issue is SHARED septic between the mfg and cottage. While FHA guidelines are fairly specific about wells, I don't see anything regarding septic systems. County already said that it is sufficient for 2 residences IF it can be tested (30 days inhabited), but County does not = FHA guidelines. Looking for specifics here if you have them? Thanks!

HUD isn't as concerned with septics as they are wells, so that is why there is less guidance.

I was told years ago by my HOC (concerning a community septic) that if the wastewater system is legally permitted for the combined bedrooms, has a maintenance agreement in place (also sounds like an easement in your case) and they are acceptable in the market, they are acceptable to HUD.

YMMV

 

[andrew81]

iv. Inspection by a Qualified Individual or Entity
If the appraiser cannot determine that a property meets FHA's MPR or MPS, an
inspection by a qualified individual or Entity may be required.
Conditions that require an inspection by qualified individuals or Entities include:
- standing water against the foundation and/or excessively damp basements;
- hazardous materials on the site or within the improvements;
- faulty or defective mechanical systems (electrical, plumbing or heating/cooling);
- evidence of possible structural failure (e.g., settlement or bulging foundation wall,
- unsupported floor joists, cracked masonry walls or foundation);
- evidence of possible pest infestation;
- leaking or worn-out roofs; or
- any other condition that in the professional judgment of the Appraiser warrants
inspection.
Appraisers may not recommend inspections only as a means of limiting liability. The
reason or indication of a particular problem must be given when requiring an inspection.