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Can you get a reverse mortgage with a dug well?
By Carolann B. on 11.12.2019Hello Carolann,
HUD does approve properties with individual water systems (wells), but there are several requirements that both the property and water system must meet. Rather than repeating the HUD manual for each type of well (private, shared, or community), I have linked to the HUD website here, where you can access HUD Manual 4000.1 if you’d like to review the specific requirements.
These requirements vary depending on whether your water source is a private well serving only your property, a shared well, or a community water source. The manual itself is over 1,000 pages long, so keep in mind that the section on water systems begins on page 166.
Below is the relevant excerpt from the manual regarding private wells (a well located on your property that serves only your home):
(2) Individual Water Supply Systems (Wells)
When an Individual Water Supply System is present, the Mortgagee (lender) must ensure that the water quality meets the requirements of the local health authority. If there are no local or state water quality standards, the water must meet EPA standards, as outlined in the National Primary Drinking Water Regulations (40 CFR §§ 141 and 142).
Requirements for Well Water Testing
A well water test is required for, but not limited to, properties:
- that are newly constructed;
- where an appraiser has reported deficiencies with the well or water quality;
- where the water is reported or known to be unsafe;
- located near dumps, landfills, industrial sites, farms (pesticides), or other hazardous sites; or
- where the distance between the well and the septic system is less than 100 feet.
Testing Guidelines
- All water testing must be conducted by a disinterested third party.
- This includes the collection and transport of the water sample, which must be tested by a local health authority, a commercial testing laboratory, a licensed sanitary engineer, or another party approved by the local health authority.
- At no time may the borrower, homeowner, or any interested party collect or transport the sample.
Well Location Requirements
The FHA’s guidelines for well location on FHA-insured properties are detailed in 24 CFR § 200.926d(f)(3). Below is a reference table outlining the minimum required distance between wells and potential pollution sources for existing construction:
Required Documentation
The lender (Mortgagee) must obtain a valid water test from either:
- the local health authority or
- a state-certified laboratory authorized to conduct water testing.
If your property is serviced by a shared well (a well located on your land or another property but shared with at least one other homeowner), the manual outlines additional requirements starting on page 168. I encourage you to refer to the HUD manual if you’d like to understand the specific compliance measures required by the lender and appraiser for shared wells.
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