Water Systems:
Individual Water Systems

Chapter 1
Appraisal and Property Requirements
Page 1-21b

General Requirements

A: Refer to the section of this guide titled Utilities Not On, HUD Handbooks 4905.1 REV-1, 2-5.B.2 and 4150.2 to see when connection to a public or community system is required.

B: 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, and shall also include auxiliary uses for lawn and garden maintenance.

C: The appraiser is responsible to identify the individual water system and appropriately condition his/her appraisal for all water testing requirements.

D: The lender is to ensure that certifications of water quality and quantity are obtained for proper processing and determination of final acceptability.

Water Quality, Mortgagee Letter 95-34

A: Individual water wells are owned and maintained by the homeowner, and are subject to compliance with all requirements of the local and or State Health Authority having jurisdiction.

B: HUD testing requirements, as stated in Mortgagee Letter 95-34, are the minimum standards acceptable for FHA insured mortgages. This includes at a minimum lead, (first flush) nitrate, nitrite, total nitrate/nitrite, total coliforms, and fecal coliforms or E.coli. If state and local agencies impose additional standards, they too must be met.

C: All test sample should be taken by a state-certified private laboratory or their designee in accordance with the State drinking water regulations.

Well Location

Individual water supply systems (wells) should be checked to establish the distance from the septic system. The Appraiser’s site sketch should indicate approximate location of individual systems and leach fields. See the section of this manual titled Appraisal Package

A: A well located within the foundation walls of a dwelling is not acceptable except in arctic or sub-arctic regions.

B: Water which comes from any soil formation which may be polluted, contaminated, fissured, creviced or less than 20 ft. below the natural ground surface is not acceptable, unless acceptable to the local health authority. Certification of such is required in the insuring package.

C: Individual water supply systems are not acceptable for individual lots in areas where chemical soil poisoning has been or is practiced if the overburden of soil between the ground surface and the water bearing strata is coarse grained sand, gravel, or porous rock, or is creviced in a manner which will permit the recharge water to carry the toxicants into the zone of saturation.

D: The following shall be used in establishing the minimum acceptable distance between wells and sources of pollution located on either the same or adjoining lots. These distances may be increased by either the health authority having jurisdiction or HUD.

Distance from Source of Pollution

Source of pollution	Minimum horizontal distance (feet)	Supplemental requirements*
Property Line	10	(*EP)
Septic Tank	50
Absorption Field	100	(SUP1)(*EP)
Seepage Pit	100	(SUP1)
Absorption Bed	100	(SUP1)
Sewer Lines w/Permanent Watertight Joints	10
Other Sewer Lines	50
Chemically Poisoned Soil	25	(SUP3)
Dry Well	50
Other		(SUP2)

Supplemental Requirements Notes*

(SUP1) This clearance may be increased or decreased depending upon soil and rock penetrated by the well and aquifer conditions. The clearance may be increased in creviced limestone and permeable strata of gravel and sand. The clearance may be reduced to 50 ft. only where the ground surface is effectively separated from the water bearing formation by an extensive, continuous and impervious strata of clay, hardpan, or rock. The well shall be constructed so as to prevent the entrance of surface water and contaminants.

(SUP2) The recommendations or requirements of the local health authority shall apply.

(SUP3) This clearance may be reduced to 15 feet only where the ground surface is effectively separated from the water bearing formation by an extensive, continuous and impervious strata of clay, hardpan, or rock.

(*EP) For Existing Properties. If the locality permits distance requirements less than those prescribed by FHA, the property may be considered eligible for a mortgage insured by FHA provided that the lender submits evidence in the case binder that the subject property is in compliance with the applicable local or state distance requirements and meets the conditions stated in Mortgagee Letter 2002-25.

A: Individual Water Systems/Wells should be located on the subject property site. If not, they must be on an adjacent property, and evidence of water rights and recorded maintenance agreement must be provided for acceptance of the well as the primary source of water for an FHA insured property.

B: Additional distance information may be referenced from HUD Handbook 4910.1, Appendix K, 24CFR Sec. 200.926d & Mortgagee Letter 2002-25.

C: Cisterns- HUD Handbook 4150.2 Section 3-6 indicates that properties served by cisterns are not acceptable for mortgage insurance. However, the HOCs have the authority to consider waivers in areas where cisterns are typical. Link to HOC policy on cisterns.

Additional information may be researched in HUD Handbook 4150.1, Rev-1, Sec. 12-16 and 12-17 and 4075.12 REV, 4150.2 Section 3-6, 24CFR 200.926(f).

Miscellaneous Individual Well Items

A: New wells must be drilled, no less than 20 feet deep, and cased. Casing should be steel or other casing material that is durable, leak-proof, and acceptable to (either) the local health authority and (or) the trade or profession licensed to drill and repair wells in the local jurisdiction. Additional information on new wells, pumps, and storage tanks construction information may be referenced from HUD Handbook 4910.1, Appendix K and 24CFR 200.926d(f)

B: Individual Residential Water Purification Equipment - If a property is otherwise eligible for insurance but does not have access to a continuing supply of safe and potable water without the use of a water purification system, the requirements in Mortgagee Letter 92-18 and Mortgagee Letter 95-34 must be satisfied.

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