October 8, 2014
A reader asks,“I am planning to sell my Manufactured Home on a permanent foundation in So. California. Water to the home is provided by a well on the property. Due to a drought in the area for the last 5 years my well still works but is not producing enough water for my usage.”
“To remedy this problem I have had a 5,000 gallon storage tank installed on the property with q booster pump that serves the home. I have a water truck bring me “city water” to fill the storage tank when I need it to supplement the low producing well. This arrangement works totally fine. My question is: will this situation prevent a qualified buyer from being approved for an FHA loan to purchase the property?”
FHA loan rules state that a cistern–basically a water tank using the classic definition of the word–is unacceptable. However, in certain cases a waiver may be applied for in situations the FHA defines as those where cistern use is common.
Such waivers are not automatic and a borrower in need of such a waiver should call the FHA at 1-800 CALL FHA to learn how to apply, or discuss the matter with the loan officer.
The FHA provides a list of unacceptable conditions related to this scenario. The include the following as printed in HUD 4150.2:
“Unacceptable Conditions
The following water well conditions are unacceptable and must be noted…
–mechanical chlorinators
–water flow that decreases noticeably when simultaneously running water in several plumbing fixtures (the well may not be able to provide a continuous, adequate supply of water)
–properties served by dug wells unless a complete survey conducted by an engineer was delivered to the lender and subsequently given to the appraiser
–properties served by springs, lakes, rivers or cisterns”.”
For more information on FHA requirements for a cistern waiver or related issues, contact the FHA directly at the number provided above.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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