New HUD Requirements Re Well And Septic

[Thomas J Kirchmeyer]

I watched only a portion of the webcast (there's only so much one can take) and I believe I heard the comment that well and septic systems are NOT required on the sketch any longer. Does the appraiser have to comment on the distances in the report - well 50' from septic, 10' from property line, and 100' from septic drain field? I would say 95% of owners do not have these distances labled on a survey for the appraiser to see. Are we supposed to guess? I have FHA lender clients that want exact distances, not approximate. Even if the owner pointed out where he thought the well and septic were located, it would be tough for the appraiser to document. Maybe this has been a lender guideline and not a HUD requirement for me. It stems mainly from an FHA reverse mortgage client of mine. They do not want to order surveys and the appraiser cannot accurately report the distances.

I was wondering if the rule is now changed on this topic and how should the appraiser report it? My interpretation is that we should note obviously that the property has well and septic, and that's it. Only if we observe a condition (seapage, smell, etc) would we report further on these private systems. They don't even have to be tested anymore per HUD (I know if local codes mandate inspections we must note).

Any thoughts?

 

[ANNA TODARO]

I have just run into this exact situation. I did an FHA last month but did not have enough documented information for the exact locations of the septic and drainfield. And, of course, it is on over three acres with no physical boundary markers. I do not feel comfortable (and actually refuse) making educated guesses and basing it on what the homeowner thinks.... Are there new parameters for this?

 

[Thomas J Kirchmeyer]

None that I am aware of. And based on the feedback of answers to my question (you are the only one) appraisers are either very confused about this topic, do not care, will do whatever they are told, or just guessing. I still do not have an answer but I am attending an AI FHA seminar in early Feb and will ask then.

 

[Mr Rex]

As an FHA appraiser, I have never included the sketch of a location of the septic field in a report. My X-Ray vision hasn't been working up to par, so I can't see thru the ground. I indicate that I can't determine (as is allowed by FHA). I also do not rely on the sketches supplied by the health department. As a former builder, I know they don't always match real life, at least not well enough for me to sign a certification that it meets requirements.

While I don't know the answer to your question "Does FHA still want the sketch". If I was there when they were installing teh system and I saw the lines I might provide the sketch. Otherwise, not my problem.

 

[Otis Key]

I don't do FHA's but did listen in the background (couldn't watch all of that) and I remember something about it not being a requirement that the appraiser sketch it. The only, from what I remembered, was that the appraiser should comment if there was surface evidence and then you could comment on the distance to the well head if known.

Why not contact your regional office?

 

[Karl]

Just returned from the FIRST Seminar given reference FHA for 2006 Phoenoix AZ 1/10/2006 for APPRAISERS. Got the BOOKS with the additional pages that are ALREADY changes since book publication December 29 2005, The general overall reason for the Seminar is FHA has lost a LARGE share of the Market. DUH!! If you can breath you can get a loan so.

Well seems FHA is just going to pretty much go with a conventional type BUT supposedly they EXPECT Appraiser to tell the TRUTH on the NEW forms. No VC Sheets No Well, Septic Info just does it have it & does it work. Basically it comes down to this: We Don't want you to tell us everything you use to, BUT in the Event that the Loan goes South You will be who we hold accountable. So you can either just check the boxes on the new Form or do the checked boxes with a LOT of EXPLANATION & with the speakers emphazing this is the way it is to be done as of TODAY. Me, I'm going with checked boxes with LOTS of Explaining. Box 4 checked when report leaves here.

YOU are to still know evertyhing in the Book & remember ALL items on VC sheet Items as yoiu are requires to do the checks. New test for NEW FHA Appraisers due to be ready Feb 6, 2006, OH & NO TRAINEES can do a FHA Appraisal (Ain't that a FUNNY one)

 

[Mr Rex]

So Karl: Is it check box 4 for the well and septic locations?

 

[Don Clark]

B) Page 9 of 88 in the MORTGAGE LETTER 2005-34

"Identify the type of utilities in the site section of the report.......when water and sewer are private, the lender must require water testing and note compliance with HUD guidelines......Septic testing is to be governed by state or local requirements....however, the appraiser must note any readily observeable deficiencies regarding the septic system....appraiser is also to report on availibility of connection to public and/or community water/sewer systems. Nowhere in the 88 pages can I find anything else except restatement of the above.

 

[Karl]

NO it is check box 4 due to Don's posting Location on a sktch is no longer required.