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.
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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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