Understanding Real Estate: FHA/ VA Loans and Well & Septic Hookup

Many homes in the surrounding area still have a well and septic.  When purchasing one of these homes with a  FHA or VA loan it is a requirement to hookup to public services if they are available and the cost of the hookup is less than 3% of the sales price.  Often times, the costs of the hookup is between $3,000-$6,000.  

Photo Courtesy of UNC

Another case in which the hookup will be required regardless of the cost is if the well or septic system fails the inspection.  It is a good idea to get the proper documentation from the governing township early in the lending process so that closing is not delayed.  Your KW Selling Team agent will take care of this for you.  

 

Home Buying Guide: What is a Point of Sale Inspection?

A Point of Sale Inspection is a well and septic inspection.  Many Mid-Michigan counties require this inspection before the transfer of a property.  Point of Sale Counties are: Eaton County, Ingham County, Shiawassee County and Washtenaw County.  Inspectors also have to license within the county that the home is listed for sale or your loan officer will not accept the report.

For a well inspection, your inspector will determine the size, age, gallons per minute (gpm) and if the well is within the county compliance codes and HUD guidelines.  Also, water samples will be drawn and sent to a lab for testing.  Different loans and counties require different water tests.
You need the following water tests: total coliform (bacteria), nitrates, nitrites, arsenic and lead.  It is always a good idea to ask your local health department what the county requirements are.  You also need to check with your lender for additional water tests.    

A well inspection will be called for in a non point of sale county if the appraiser notes the following:
-knowledge that the water might be contaminated
-corrosion of the pipes/ plumbing
-if the property is located less than 1/4 mile from an area of intensive agriculture, gas drilling, coal mining, dump, junkyard, landfill, factory, gas station, or dry cleaner


A domestic well must be at least 50 feet from a septic tank, 100 feet from the septic tanks drain-field, and 10 feet from any property line.  A survey might need to be preformed if: the appraiser identifies adverse conditions or indicates that the minimum conditions might not be met.

For a septic inspection, your inspector will provide you with a written report on the size, location, age and working condition of the system.  They will advise you on when the next pump out is needed and any visible issues.  Also, the inspector will know whether or not the septic system meets the local county compliance codes and HUD guidelines.

Non Point of Sale Counties are Branch County, Calhoun County, Clinton County, Hillsdale county, Jackson County, Lenawee County, and Monroe County.  A well and septic inspection is not required on the county level for the transfer of a property.  However, many lenders will require it for loan approval.  For example, in Clinton County if the appraiser sites that there are visible issues with the well and/or septic, an inspection will be required.

For all your well and septic inspections KW Selling Team recommends Mike Johnson of Johnson Inspections 517-543-5413.