This past weekend I got a phone call from a friend who is an out State Realtor, with a question on What Are The FHA Guidelines On Cesspools? She had a listing on a property with a cesspool, and a Buyer who wanted to purchase the property with an FHA Loan. However, the Buyer's Realtor was insisting that FHA would not do a Mortgage on a property with a cesspool. I don't recall ever doing a mortgage for a Borrower purchasing a property with a cesspool, so that meant I had to do a little homework so that I could give her a correct answer on What Are The FHA Guidelines On Cesspools?
To my surprise FHA does not really have a guideline that is specific to cesspools, but instead has a catch all guideline that covers all septic & odd ball sewage systems in general. The FHA Guideline basically states that properties that cannot connect to a public system, and are serviced by an individual sewage system that is ACCEPTABLE to their local Health Department, the system is then also ACCEPTABLE to FHA.
As I stated previously this is a catch all guideline, so it includes numerous types of sewage systems such as:
- Engineered septic systems
- Cesspools
- Privies (out houses)
- Mound systems.
Also an individual sewage system inspection is only required if:
- The Appraiser sees evidence of a possible system failure.
- If it is mandated by State or local Jurisdictions.
- If it is customary to the area, or
- At the request of the Lender.
Should a sewage system inspection be required, the appraiser will condition for the sewage system to be inspected by:
- The local Health Department or Authority
- A licensed Sanitarian, or
- An individual determined to be qualified by a DE Underwriter, and
- A certification that the system is operating satisfactorily.
NOTE: If the property is serviced by an individual sewage system, and the water source is a Well, the individual sewage system MUST be 100 feet from the Well.
Even though the above Are The FHA Guidelines On Cesspools, Investors may have overlays that WILL NOT allow for properties to have individual sewage systems, such as cesspools. Therefore, Borrowers should check with the Lender that they are obtaining a mortgage from to see if that Lender or their Investors, have overlays pertaining to individual sewage systems, which would prevent them from approving a mortgage.
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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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