Homebuyers looking to finance a home purchase with a Federal Housing Administration FHA loan can in store for a nasty surprise-they won't be allowed to purchase a particular property because it doesn't meet FHA requirements. Why do these requirements exist, what are they, and can they be remedied so buyers can purchase the homes they want? When a homebuyer takes out a mortgage , the property serves as collateral for the loan. In other words, if the borrower stops making the mortgage payments, the mortgage lender will eventually foreclose and take possession of the house. The lender will then sell the house to reclaim as much of the money still owed on the loan as possible.
If it is I tell them to be pro-active and to obtain quotes for city water and sewer hook-up.
By doing this we can save several days in getting Loan Commitment, and eliminate a lot of stress and frustration. I'm certain there are other areas this applies.
Fha sewer hookup requirements
George - This is very interesting. I live in an area that has both sewer and septic.
The areas very close to the water are completely septic, but sewer lines have been placed in recent years on additional streets. I wasn't aware of the FHA requirement. I have a buyer right now who is getting an FHA loan first buyer I've ever had who needed onebut the property has city water and city sewer.
Sep 17, The problem is with the FHA City Water And Sewer Hook-Up Requirement. FHA will require the Buyer to hook-up to the city water and sewer before the loan can close. For many FHA Buyers this is a problem, because many FHA Buyers tend to have very little money for downpayment and Closing Costs, much less money to hook-up to the city water and sewer Location: Cottonwood, CA. Apr 29, HUD/FHA's current policy on this situation (as outlined in para. of the Handbook) states that hook-up to public utilities is not required, if documentation can be provided to demonstrate that it will cost more than 3of the appraised value to connect to the public water or sewer . 4 requirements and eligibility standards for a Federal Housing Administration (FHA) insured 5 mortgage. Mortgagees bear primary responsibility for determining eligibility; however, the 6 appraiser is the on-site representative for the mortgagee and provides preliminary verification 7 that the Property Acceptability Criteria have been met.
Gail then I guess that post came at a timely time. Let me know if you need any help on this. I found your post very interesting, this is the very first I've heard of this and I've worked with buyers and FHA loans for decades.
HUD Handbook lists the FHA minimum property requirements for septic, stating: "Whenever feasible, connection shall be made to a publicly owned or publicly controlled system that is adequate to serve the needs of the project." This is also echoed in HU which also states.
We've sold homes in the past on septics, yet I guess they've not had sewer available for connection in the streets. George, my home in Illinois is on well and septic, but I can pretty much guarantee it will be for a long time.
Good info for folks looking in border areas. George - Your being proactive when you recognize a street that will be an issue is very impressive.
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By doing so, that truly shortens the timeline for approval and also cuts down on some of the anxiety for the buyers. I will just bet you have many many clients who can't thank you enough for being so on top of FHA requirements.
Good to know information abuot FHA. I will keep this in my back pocket in case I ever need it.
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Happy New Year! LIKE 1.
Cottonwood, CA. If you have a pond or a lagoon on your property, the appraiser must scrutinize that, as well.
HUD HOC Reference Guide Sewage Systems Chapter 1 Appraisal & Property Requirements Page A. Community Sewer Systems: HUD no longer maintains list of approved ojasjobz.com is helpful if the appraiser notes the name of the community system(s) on the appraisal report. Well Requirements. Some homes have their own water supply, usually in the form of a well. But the FHA guidelines for wells is quite specific. For an FHA appraiser to pass your well, it must be at. Jun 26, FHA loans have requirements, including minimum property standards, which help protect lenders. FHA loans must meet safety, security, and soundness .
Also, if your home has underground storage tanks, the appraiser must inspect that as well. If the appraiser determines that any of these areas are out of order, he can order further inspection and hold up appraisal approval until any problems are fixed.
There are requirements for drainage on your property when it comes to water and sewage. The property must provide enough drainage so that standing water is not an issue.
Signs of poor drainage can include, along with standing water, a lack of drainage apparatus on the home, such as gutters. If drainage is deemed a problem, the appraiser can order further inspection and repairs before he approves the home.
What are the FHA requirements for sewer/septic systems? Some borrowers want to know if the property they're interested in purchasing with an FHA mortgage loan will qualify if there is a septic tank on the property. Others want to know specific required distances from a septic tank to the property line or related requirements. The FHA has ated, replaced, revised or restated many things in the new rule book. That includes FHA loan rules covering minimum property requirements for the water supply to a home that would be purchased with an FHA mortgage. The new FHA loan minimum property requirements on this issue includes the following. Mar 19, Hopefully you have never been caught off-guard by this little known Public Water FHA rule. It can add a large unexpected cost to a purchase! It can add a large unexpected cost to a purchase! Did you know that if a property is using a well for it's source of water and there is a public water connection "available" to the property, FHA.
Some homes have their own water supply, usually in the form of a well. But the FHA guidelines for wells is quite specific.
In addition, the well cannot be within 10 feet of your property line. The appraiser can also test for chlorination in the water.
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If the well is inoperative, it must be filled with at least 20 feet of concrete and capped. If you have a well on your property, note that the appraiser will do two key tests.
First, the appraiser will run several of the water fixtures in the property to see if the level of the well drops noticeable. Large drops in water level can be a red flag to appraisers.
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Additionally, the appraiser must do a pump test. In this case, the well must pump a certain amount of water per minute to pass. If your well is an existing one, a pace of 3 to 5 gallons per minute is acceptable.