FHA City Water And Sewer Hook-Up Requirement

Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

Most of the streets here in Middletown, CT, have city water & sewer.  However, there are still a number of streets that the homeowners never hooked-up to the city water & sewer, and continue to be on wells and/or septic systems.  Because these homeowners have never hooked-up to the city water & sewer, Buyers who later want to purchase the property with FHA financing run into a problem.  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.

FHA recognizes this, and therefore, will make an exception.  If the cost to hook-up to the city water and sewer exceeds 3% of the selling price, FHA will allow for a hardship waver.  The Buyer will be required to obtain quotes from a licensed plumber or a General Contractor that is licensed to that that type of work, and if the quotes exceed 3% of the selling price, FHA will wave the requirement that the Buyer hook-up to the city water and sewer.  This waiver is usually easy to obtain on a lower price properties, because the 3% of the selling price is easly exceeded, but on properties that are closer to the upper FHA loan limits this can be a big issue.

That is why when a Buyer applies for a FHA Loan with me, and I recognize that the street is one of the streets that I am aware of that this could be a potential issue, I immediately advise them to have their Realtor check to see if the property is still on well & septic.  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.



Who To Call For Your Mortgage Needs In Connecticut:

George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308  gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net


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Steve, Joel & Steve A. Chain
Chain Real Estate Investments & Mortgage, Steve & Joel Chain - Cottonwood, CA


Great information; as the list of details to successfully close FHA grows this is great buyer/seller info. I'm certain there are other areas this applies.



Sep 17, 2011 10:34 AM #1
Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

We live in a rural area and many townships have only wells/septics. 

Sep 17, 2011 10:51 AM #2
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

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 one), but the property has city water and city sewer.

Sep 17, 2011 01:56 PM #3
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Steve thank you

Erica, if there is only well & septic than this guideline does not apply and you don't have any to worry about.

Gail then I guess that post came at a timely time.  Let me know if you need any help on this.

Sep 17, 2011 03:11 PM #4
Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co

Hi George,

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. We've sold homes in the past on septics, yet I guess they've not had sewer available for connection in the streets.

Question for you, has this been a long standing requirement?

Sep 17, 2011 03:11 PM #5
Ann Hayden
Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri - Chesterfield, MO


WOW!  I never knew that!

Ann Hayden in Wildwood, MO

Sep 17, 2011 03:45 PM #6
Debbie Walsh
Shahar Management - Middletown, NY
Hudson Valley NY Real Estate 845.283-3036

Where we are is pretty much ALL well and septic except in the towns. 

Sep 17, 2011 06:24 PM #7
Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

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.

Sep 19, 2011 12:33 PM #8
Barbara Altieri
RealtyQuest, Fairfield and New Haven County CT Real Estate - Shelton, CT
REALTOR-Fairfield County CT Homes/Condos For Sale

George -- Your being proactive when you recognize a street that will be an issue is very impressive.  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.

Sep 19, 2011 02:35 PM #9
Tracy Lee Parker

Good to know information abuot FHA.  I will keep this in my back pocket in case I ever need it. Happy New Year!

Jan 03, 2012 05:39 AM #10
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