A reader got in touch with us recently to ask us about well water testing: “Is there an automatic testing of the well required just because it is surrounded by extensive farm land? I know that is required for USDA but wasnt aware that FHA required it. A reviewer is telling me it is in the 4000.1 Handbook and I dont remember seeing that.”
The answer to this particular question is addressed in HUD 4000.1 on page 495, but before we get to the specifics, it’s important to point out that FHA loan standards are often not the only ones that must be met in situations like these.
The local health authority may require testing of well water for a variety of reasons not specifically mentioned in the FHA loan single family mortgage rule book, and HUD 4000.1 is not designed to address every single instance where state, local, or other ordinances may apply.
The bottom line? FHA loan rules don’t always have the final say-the laws of your state or local community are never overruled by FHA loan guidelines. Well water is an issue where there may be quite a bit of variation from one housing market to another when it comes to standards and requirements.
The answer to the reader question? Yes, in cases like the one mentioned above, well water testing may be required. According to page 495 of HUD 4000.1:
The Appraiser must note any readily observable deficiencies regarding the well and require test or inspection if any of the following apply:
the water supply relies upon a water purification system due to the presence of contaminates;
corrosion of pipes (plumbing);
areas of intensive agricultural uses within one quarter mile;
coal mining or gas drilling operations within one quarter mile;
a dump, junkyard, landfill, factory, gas station, or dry cleaning operation within one quarter mile; or
an unusually objectionable taste, smell, or appearance of well water.
The “one quarter mile” measurement is the FHA loan standard-local standards may be higher or require additional testing or action depending on the requirements in a given market.