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AllStar Powerhouse, 56 Central Avenue, Suite #201, Asheville NC, 28801  

 

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Each office is owned independently and may offer different programs to those advertised - check with your local office before making a decision.   Patton Property Group LLC DBA AllstarPowerhouse

 

'Allstar Agents' or agents who are part of the Allstar network are not employed by Patton Property Group or its affiliates. All agents are independent contractors for individual real estate brokerages in their respective states.

Shared Wells and Loans

July 28, 2017

 

Are you selling a home with a shared well? Are you considering purchasing a home with a shared well? There are loan guidelines to consider when not paying cash. Remember, rules change, so check with your loan officer!

 

VA Loans

General: Must have a continuous supply of safe and potable water for drinking and other household purposes, and safe method of sewage disposal. Allowed only if not “feasible” to connect to public utilities.

 Must have separate shut-off valves for water and sewage lines

 Cannot pass over, under or through another dwelling

 Must have permanent easement for service and maintenance of well, septic and pipes

 Site must be graded to prevent “ponding” and contamination of water supply

 Must comply with local health authority requirements

 If no local health authority exists, EPA requirements will apply

 Water may also be tested by commercial testing lab by a 3rd part sanitary engineer

 Veteran must sign a statement that they are aware of shared well/septic agreement

 Acceptable “Well-Sharing” Agreement terms:

o Reasonable and fair cost-sharing provisions for maintenance and repairs

o Easement which allows for maintenance and repairs

o Agreement is binding on all parties

o Allows for successors or assigns

o Must be recorded in local deed records

 

FHA and USDA

General: Shared Well & Septic allowed only if “not economically feasible” to connect to public utilities.

 Existing home – Capable of pumping 3 gallons of water per minute

 New construction – Capable of pumping 5 gallons of water per minute

 Health Department certification – Water is safe to drink

 Shut-off value to individual dwelling

 Cannot service more than 4 dwellings

 Energy for pump must be separately metered

 Acceptable “Well-Sharing” Agreement terms:

o Binding on all dwelling owners, their successors or assignees

o Must be recorded documents

o Allow for testing of water by 3rd parties

o Continuity of water service to all parties

o No additional connections allowed unless agreed to by all parties and does not exceed a maximum of 4 dwellings

o Cannot relocate a septic system with 50 feet (existing) or 100 feet (new construction) of shared well

o Easement must be established for servicing well and water lines

o Allow for emergency situations without approval from other parties

o Allow for equitable costs of repairs or maintenance o Allow for collection of repair or maintenance money from all parties

o Recorded document may not be amended

o Recorded document is legal and binding

 

Fannie/Freddie

These agencies do not give strong guidance on this topic. Here is really all the say about it in the guides:

 A shared well & septic must meet community standards, be adequate, be in service, and be accepted by area residents

 If public sewer and/or water facilities—those that are supplied and regulated by the local government— are not available, community or private well and septic facilities must be available and utilized by the subject property.

 The owners of the subject property must have the right to access those facilities, which must be viable on an ongoing basis.

 Generally, private well or septic facilities must be located on the subject site.

 However, if inhabitants of the subject property have the right to access off-site private facilities and there is an adequate, legally binding agreement for access and maintenance, then off-site private facilities are acceptable.

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