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Septic w/ Lagoon - FHA - yes/no

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mutigerfan

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Feb 11, 2008
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Certified Residential Appraiser
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Missouri
Real Simple:
Subject with Septic Tank with Lagoon that is up to local health code. I am finding conflicting information of the FHA website regarding this type of system and its acceptance with FHA Guidelines.

Where I live, it is estimated that 70% of the homes on acreage have this type of septic system - which is neccessary due to the high clay-content soil.

Please advise.
:peace:
 

RSW

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Tennessee
I would think that the queation would be: Is it approved by the local health department?
 

mutigerfan

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Missouri
Scott - Yes - it is approved by the local health department

Just so we are talking about the same thing: a Lagoon in this area is a earth bermed circle with fencing. Usually it is 3-5ft deep. It is NOT considered the primary source of decomposition - that would be the attached septic tank. The Lagoon serves as a "overflow" collection site that holds the effluent until absortion can take place. Most Lagoon here are dry 50% of the tiime.
I have conflicting reports that FHA will accept this type of private septic system.
 

Peter LeQuire

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With "conflicting reports" that HUD will accept these installations, you should, IMO, contact to the HOC office having jurisdiction. When you don't get an answer from them, you could
(1) talk with the client's DE underwriter about how to proceed, or, (2) complete the report subject to inspection and approval of the disposal system by the health department and let the DE underwriter make the call.
 

David S. Roberson

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Scott - Yes - it is approved by the local health department

Just so we are talking about the same thing: a Lagoon in this area is a earth bermed circle with fencing. Usually it is 3-5ft deep. It is NOT considered the primary source of decomposition - that would be the attached septic tank. The Lagoon serves as a "overflow" collection site that holds the effluent until absortion can take place. Most Lagoon here are dry 50% of the tiime.
I have conflicting reports that FHA will accept this type of private septic system.

Yuck!!!!!!!!!!!!!!
 

Mr Rex

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North Carolina
What are FHA's requirements for septic and sewer systems?

Answer

FHA requires that a property be connected to a public sewer system if feasible. If connection to a public system is not feasible, the property may be served by an individual sewage (septic) system or a community system.

Community Sewer System: HUD no longer maintains list of approved systems. The appraiser must note on the appraisal report the name of the community system(s). The lender is responsible to ensure the community system(s) are licensed and adequate to service the property.

Individual Sewage Systems: For properties that cannot connect to a public system and are served by an individual sewage system that is acceptable to the local health authority, the system is then acceptable to HUD/FHA. This includes numerous types of sewage systems including cesspools, individual pit privies, and mound systems. Individual sewage system inspections are only required if there is evidence of system failure, if mandated by state or local jurisdiction, if customary to the area, or at lender's discretion. In those instances, the appraiser is to condition for an inspection by the local health authority, a licensed sanitarian or an individual determined to be qualified by the DE Underwriter and a certification that the system is operating satisfactorily.

If the home has been unoccupied for more than 30 days (and does not meet one of the conditions noted above) the lender's underwriter must decide if an inspection of the system is necessary.

Handbook 4150.2 Section 3-6A.5 and Appendix D-4
HOC Reference Guide, Section 1-20
Mortgagee Letters 05-48, 05-34

Reference Handbook 4150.2 Section 3-6A.5 and Appendix D-4; HOC Reference Guide, Section 1-20; Mortgagee Letters 05-48, 05-34'
 

mutigerfan

Thread Starter
Junior Member
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Feb 11, 2008
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Certified Residential Appraiser
State
Missouri
So I took the advice and called the local HUD office in Kansas City.
The lady I talked to stated the same things that Mr. Rex had cut and paste (thank you btw).

Funny thing is that she did not want to give me the page number or any reference numbers. She simply said its on the website - go find it.
Nice.

Long story short is that Local Codes Trumps FHA Guidelines in regrds to lagoons.

A sincere Thank You to those who helped me out on this one.
:clapping::clapping::clapping::clapping:
 

Terrel L. Shields

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May 2, 2002
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Certified General Appraiser
State
Arkansas
Subject with Septic Tank with Lagoon that is up to local health code
that's all you need to know.

Long story short is that Local Codes Trumps FHA Guidelines in regrds to lagoons.
nope. FHA guidelines allow any type system that is locally approved.
 

RSW

Elite Member
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Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
So I took the advice and called the local HUD office in Kansas City.
The lady I talked to stated the same things that Mr. Rex had cut and paste (thank you btw).

Funny thing is that she did not want to give me the page number or any reference numbers. She simply said its on the website - go find it.
Nice.

Long story short is that Local Codes Trumps FHA Guidelines in regrds to lagoons.
A sincere Thank You to those who helped me out on this one.
:clapping::clapping::clapping::clapping:
That's what I thought!
 
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