December 4, 2021

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FHA Appraisal Rules For Wells: A Reader Question

052A reader got in touch with us recently to take exception to a blog post we wrote in 2011 about FHA loan appraisal rules for sewer and septic systems. In that post, we state, “Sewer systems are not identical, but as long as the system is functioning properly and lives up to local codes, the FHA does not disqualify the home simply because a sewage or septic system isn’t the same as a typical suburban system in a metropolitan area.”

The reader replies, “No, that is not true. FHA has own guidelines, they do not go by the state and local guidelines. We were set to close on a brand new home, we had a well inspection and water test which all complied with local guidelines and 3 days before closing the FHA said it didnt meet their guidelines so we cant close. We have to try to get a waiver and my only question is, how long will that take?”

It’s important to point out that the reader is talking about well water, where the article in question is NOT discussing wells used to deliver drinking water. The article discusses sewer and septic systems.

These are considered separate systems in the FHA appraisal rules found in HUD 4000.1 and are listed as such, described in places as “water wells” as opposed to “sewer and septic”. There are FHA appraisal rules for both wells and sewer/septic.

The original blog post was written in 2011, but since then FHA loan rules have changed a great deal. The old references that informed the original article have since been replaced by HUD 4000.1 which has changed, updated, restated and otherwise modified a lot of FHA loan rules.

FHA appraisal requirements for wells may vary depending on whether the well is considered a “shared well” which serves more than one property. Another variable may be whether there are existing state or local health code requirements for well water in the area, and yet another variable is whether the property can be hooked up to the local water system or not.

In HUD 4000.1 there are definitely certain standards for wells on “existing construction” properties including minimum distances, property line issues, flow requirements and lead-free piping requirements.There are separate requirements for wells serving “new construction” properties.

But state and local standards also apply. FHA loan rules never override such ordinances. However, if a well does not meet these FHA requirements, it’s entirely possible that even though the well meets local standards corrections could be required to make the home suitable for an FHA mortgage loan.

The reader’s question asking how long a waiver might take is outside the scope of this blog-only the FHA itself can answer that question and the answer may vary depending on a variety of factors including workload, the complexity of the individual case, etc.

Do you work in residential real estate? You should know about the free tool offered by It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:

Joe Wallace - Staff Writer

By Joe Wallace

May 27, 2016

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 for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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