Public Sewer Connection: Feasibility

[ZZGAMAZZ]

Doesn't the feasability of the borrower to connect to the public sewer [that is readily available] depend to a large extent upon his or his financial ability to do so?

If the borrower has the option to continue to rely on a septic system, isn't the decision to connect to public sewer a personal decision.

Isn't that a subjective decision that should be beyond the ability of the appraiser to make that decision?

If the report is being conditioned Subject To a septic certification, couldn't the lender's decision to require that service include the requirement that that septic professional provide an estimate of the cost to connect to public sewer?

Who wants to know the cost? Why? Is the pending financing of the property affected by the so-called feasability?

Peer advice please.

 

[Mark K]

Doesn't the feasability of the borrower to connect to the public sewer [that is readily available] depend to a large extent upon his or his financial ability to do so?

Probably not, its more of a call by the UW IIRC.

If the borrower has the option to continue to rely on a septic system, isn't the decision to connect to public sewer a personal decision.

Not if the UW says otherwise.

Isn't that a subjective decision that should be beyond the ability of the appraiser to make that decision?

Yes. Report what you know; let others make the call.

If the report is being conditioned Subject To a septic certification, couldn't the lender's decision to require that service include the requirement that that septic professional provide an estimate of the cost to connect to public sewer?

Yes, I suppose. Having trouble deciphering the question.

Who wants to know the cost? Why? Is the pending financing of the property affected by the so-called feasability?

The UW's decision re; feasibility likely involves the cost of connection in relation to the home's value. $500K house, $50K to connect might not be considered feasible. $20K, likely feasible...in their minds.

Years ago when I did FHA, if the sewers were in front of the home at the street, connection was mandatory; no exceptions. Then they went to a 'feasible' requirement, basically a judgement call by the UW.


BTW, I would not provide a C2C estimate for sewer connection. The owner needs to do this if necessary. Far too many unknowns.

 

[ZZGAMAZZ]

Probably not, its more of a call by the UW IIRC.


Not if the UW says otherwise.


Yes. Report what you know; let others make the call.


Yes, I suppose. Having trouble deciphering the question.


The UW's decision re; feasibility likely involves the cost of connection in relation to the home's value. $500K house, $50K to connect might not be considered feasible. $20K, likely feasible...in their minds.

Years ago when I did FHA, if the sewers were in front of the home at the street, connection was mandatory; no exceptions. Then they went to a 'feasible' requirement, basically a judgement call by the UW.

WOW. Thanks for the categorical response. I'm very appreciative. GM

 

[RSW]

It's not the appraiser's responsibility to determine the cost to connect and if it is feasible. That is the Lender's responsibility. Only report if it is available. The VA will not require connection unless it is required by a governing authority. The FHA should adopt that rule.

 

[CCAAMO]

Your job is to determine its impact's the market value of the subject property and if so how much. Subject to connection to public sewer is a lender problem, not yours

 

[alebrewer]

If the borrower has the option to continue to rely on a septic system, isn't the decision to connect to public sewer a personal decision.

Remember that they're applying for an FHA loan - if they want the loan, they have to abide by FHA's requirements. Still a personal decision, but the decision is - do you want the loan and, if so, do you want it bad enough to connect to public sewage.

 

[Tom D]

For FHA, if it isn't econonically feasible, then the underwriter can waive it. Yes, the lender can ask you that. Just call the local authority. They can give you the typical price per foot. Most owners already know that cost, when the pubic sewer was put in. At that time they told the owner the cost per foot.

 

[James Mpls]

When a well was currently in service (80% or so of properties on city water in the overall market area) for a property on a recent VA assignment, I was told by the Saint Paul RLC, that if hook up to an easily available public water is required by code by that individual municipality, then it would be a “Subject To” requirement. If not, and the well water service was functional and safe (it was), then just comment on marketability and complete “As-Is”. After checking with the municipality, hook up to public water was not mandatory. I simply bracketed private water service with the SCA, and completed “As-Is”.

 

[David S]

Interesting post. Is it because VA / FHA loan requirement? If it is GSE loan, we just appraisal current use value, right? If the current septic system work, don't have to upgrade modern system, just apply the grid adjustment if comps shows any value impact?

 

[Tom4value]

Oh, boy. Lot of FHA appraisers here don’t know this.

1. If it is economically feasible, FHA requires connection. It is not up to the borrower.
2. FHA gives us a guideline on economically feasible. If the cost to connect is less than 3% of the mortgage, it is “economically feasible”.

3. Yes, it is our responsibility to note this! We can get an estimate to connect. If a purchase, the contract will state the loan amount the buyer is looking for. If it it is a refinance, we can ask the lender.

4. We can use our head. If no public sewer is available on the street, say so and find out how far away it is and state that it is not feasible. If it runs in front of the property and the dwelling is not hundreds of feet back from the road, revert to 1, 2, and 3.