Water source

[Terrel L. Shields]

FHA even will accept a spring but is approved by FHA on an individual basis. And fannie - freddy has accepted them for a long time. They all may require a water test and if a water line is nearby, they may even require you hook up to it.

 

[mark hurlock]

It is my understanding that the EPA regulates public water supply systems but does not regulate private water supplies. Therefore, private water supplies, if regulated, would be under the jurisdiction of local health departments. I would think local health department regulations would qualify as “community standards” in accordance with FNMA. If those standards require permits, design standards and or water testing, then these standards would be required by FNMA.

I recommend you consult your local health department if there is one.

 

[Michigan CG]

It is my understanding that the EPA regulates public water supply systems but does not regulate private water supplies. Therefore, private water supplies, if regulated, would be under the jurisdiction of local health departments. I would think local health department regulations would qualify as “community standards” in accordance with FNMA. If those standards require permits, design standards and or water testing, then these standards would be required by FNMA.

I recommend you consult your local health department if there is one.

The above is correct.

 

[timd354]

FHA even will accept a spring but is approved by FHA on an individual basis. And fannie - freddy has accepted them for a long time. They all may require a water test and if a water line is nearby, they may even require you hook up to it.

Fannie does not generally accept anything other than a public water supply or a well, although I do believe that they have made exceptions to this guideline in the past. In any case, here are the Fannie Mae guidelines regarding this issue:


B4-1.4-07, Appraisal Report Review: Site Utilities (04/01/2009)

Introduction

This topic contains information on site utilities.
​

Site Utilities

For mortgage loans to be eligible for purchase or securitization, the utilities of the property must meet community standards, be adequate, be in service, and be accepted by area residents.
If public sewer and/or water facilities—those that are supplied and regulated by the local government—are not available, community or private well and septic facilities must be available and utilized by the subject property. The owners of the subject property must have the right to access those facilities, which must be viable on an ongoing basis.
Generally, private well or septic facilities must be located on the subject site. However, if inhabitants of the subject property have the right to access off-site private facilities and there is an adequate, legally binding agreement for access and maintenance, then off-site private facilities are acceptable.
If there is market resistance to an area because of environmental hazards or any other conditions that affect well, septic, or public water facilities, the appraisal must address the effect of the hazards on the marketability and value of the subject property (see B4-1.3-01, Special Appraisal Considerations for Properties Affected by Environmental Hazards (04/01/2009)).
​

 

[Meandering]

It looks like the issue for Fannie is the "drinkability" (potable) water, not the spring it's self, but the quality of the water.

Fannie Selling Guide.
Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Guidelines, Special Appraisal Considerations
November 13, 2012


Well Water and Hazardous Waste
When the lender has reason to believe that private well water that is on or available to a property might be contaminated as the result of the proximity of the well to hazardous waste sites, the lender must obtain a well certification to determine whether the water meets community standards.

Page 538

Phase II Environmental Assessment Description
A Phase II assessment provides a more detailed review of the site. It includes specific physical sampling for each hazard that was not acceptable under the Phase I assessment, as well as a review of historical records. It determines the presence or absence of specific environmental liabilities (such as asbestos or leaking underground storage tanks) or quantifies the extent of an observed or suspected environmental liability (such as soil or groundwater contamination).

Page 603

Examples of unacceptable environmental conditions include, but are not limited to, the following: generally recognized as appropriate for residential uses and maintenance of the property;

a property that is the subject of outstanding environmental or public health
litigation or administrative action from private parties or public officials;
a high-risk neighboring property that has evidence of hazardous waste spills or soil
or groundwater contamination on or around its site;

a property that has documented soil or groundwater contamination and/or a
documented tank leak that is leaking at more than 0.05 gallons per hour (which is
the National Fire Protection Association’s standard

a property with groundwater sampling that has values for other organic materials in
excess of the following concentration limits in parts per million:
• total organics (volatiles and base neutrals): 0.10 ppm
• total petroleum hydrocarbons: 1.00 ppm;
a property with groundwater sampling that has values for metals in excess of the
following concentration limits in parts per million:
• arsenic: 0.05 ppm
• lead: 0.05 ppm
• boron: 1.00 ppm
• mercury: 0.002 ppm
• cadmium: 0.01 ppm
• selenium: 0.01 ppm
• chromium: 0.05 ppm
• silver: 0.05 ppm;

Page 606
2. Is there any visible or documented evidence of oil or
groundwater contamination on the property?
3.

If the answers to questions 2 or 3 are “yes” or “don’t know,” also stop because the property either fails or needs a Phase II assessment.

Page 1175

 

[mark hurlock]

It looks like the issue for Fannie is the "drinkability" (potable) water, not the spring it's self, but the quality of the water.

I agree that FNMA requires potable water. By definition, potable is safe for consumption and safe for consumption can be defined as meeting EPA guidelines for contaminants.

However, I would disagree that the issue for FNMA ends at potable regardless of the source. The source should meet local standards. If a spring does not meet local standards, a spring would be unacceptable. As with all rules, regulations, guidelines, etc. exceptions can be made, therefore, a spring may be acceptable for one jurisdiction and not another, or could be due to the age of the subject. I think proper disclosure would be necessary in order to allow the client to make such a determination.

If I misunderstood your comment, I apologize. This is just my interpretation as I understand it.

 

[Terrel L. Shields]

Our local Health Departments can recommend (warn) people not to drink from a private well but they don't "regulate" per se here.

I know many years ago, an associate of mine appraised a place that was selling. The sellers told her that they had a "well house" and a "septic system" on a hillside (not real steep) that was covered at the time with broomsedge grass. The well house turned out to be a pump that pumped water from around the hill and down to a spring on an adjacent property. The septic was a line run into a hole in the ground filled with large rocks and covered over with soil.

The new buyers got sick...very sick, sending one to the hospital with his kidneys trying to shut down. Upon investigating they found that the health department had in fact tested the water for the landowner where the spring was located and warned both him and the subject owners to stop using it because of coli bacteria.

They took the sellers to court and forced them to buy it back.

 

[mark hurlock]

Our local Health Departments can recommend (warn) people not to drink from a private well but they don't "regulate" per se here.

.

Just curious because I don't know your area, can you construct new wells without permits and or following regulations?

Typically, once an area begins to develop regulation follows.

In Delaware, you must have permits and designs by qualified contractors for new installations. I am unaware of any regulation that would require a spring that was developed before regulation to be corrected. So and older spring might be an exception but a new one is unacceptable.

Our health department recommends but does not require annual testing of private wells. They do provide testing kits if you request one.

 

[Terrel L. Shields]

The well permitting process here is to fill out paperwork to send to the water well commission. The Health dept. has no say in drilling a well. The WW Commission sets minimum casing, that's all. IF the well has 4 or more residences on it, then the Health Dept. requires testing.

If you build a new home, they do regulate and inspect the septic system. My septic system was built prior to such inspections. So neither the well I drilled or the septic was ever "inspected". When I drilled the new well (the old one was there decades before and is shallow) I took a water sample to be tested but there is no required routine test.

 

[Rlong]

Spring does not mean "not potable" they are common in some areas, and it is "potable water supply" just not a municipal or community potable water supply.

I also get "cistern", shallow well (which is very very similar to spring" etc. around here. I simply explain allot. I will almost always use ANY comparable do demonstrate marketability of "non-typical" water (i.e. spring, shallow well, cistern). I also frequently adjust between these and a "typical" (deep) well. Most of these areas do not have muni water in the area. (1/3 - 1/2 of what i do)

Bob in CO