Uncategorized August 27, 2013

Thinking about buying or selling an acreage?

Are you thinking about buying or selling an acreage in the near or not to distant future? Let me add to the long line of items you should be thinking about… now you need to think about water. Well water vs. rural water.

Now I’m not here to get into a debate on which is healthier, or better, or more cost effective… my concern lies in your financing or that of your buyer’s financing if you’re selling. Apparently our great government is now getting involved in water and they are going to have some say in the water supply to properties they finance. 

So, on FHA, VA, USDA loans there will now be new requirements & standards if/when rural water is available. Myself and other Realtors, and our local lenders are just hearing about this stuff now too. Below you’ll find the new guidelines and I’ll try to keep you updated as we run into this more and more and how it works out!

Here is the overview of the requirement from FHA.  

Note:  The appraiser shall indicate whether a public water or sewage disposal system is available to the site.  If available, connection must be made to public or community water/sewage disposal system if connection costs are reasonable.  The lender will determine whether connection is feasible. 


Individual water supply systems (wells) may be acceptable when connection to a public or community water system is not available and there is assurance of a continuing adequate supply of safe potable water for domestic needs. 
A water test or inspection is required 
– if it is mandated by the State or local jurisdiction; 
– if there is knowledge that well water may be contaminated; 
– when the water supply relies upon a water purification system due to the presence of contaminates; or 
– when there is evidence of corrosion of pipes (plumbing), areas of intense agriculture within 1/4 mile, coal mining or gas drilling operations within a 1/4 mile, dump, junkyard, landfill, factory, gas station or dry cleaning operations within 1/4 mile, or objectionable taste, smell or appearance of the water.



ML 05-48; Handbook 4150.2 Section 3-6A.5

And here are the requirements which can be made by VA. It would be on the NOV for VA, so up to the appraisal underwriter in St. Paul.




5. WATER/SEWAGE SYSTEM ACCEPTABILITY. Evidence from the local health authority or other source authorized by VA that the individual _____ water supply, _____ sewage disposal system(s) is/are acceptable.



6. CONNECTION TO PUBLIC WATER/SEWER. Evidence of connection to _____ public water, _____ public sewer, if available, and that all related costs have been paid in full.


Therefore, it is not absolutely required to hook up to Xenia, but it could be depending the decision of the Underwriter.  The last FHA  we had, the cost was deemed to be too much and it was not required.