FHA Home Loan Appraisals - Sewer Systems

Public, Community and Individual Sewer Systems:

Public Sewer Systems:  Public sewer systems are owned, operated and maintained by the city, county or local unit of government with the power of taxation or assessment.  No certification is required by the appraiser.

Community Sewer Systems:  In general, the appraiser must note on the appraisal the name of the community system(s).  However, the lender must ensure that the community sewer system is in compliance with the requirements of the Health Authority having jurisdiction for satisfactory operation of the sewage treatment plant and discharge of treated wastes.  

Individual Sewage Systems:  For properties that cannot connect to a public system and are served by an individual sewage system that is acceptable to the local health authority, the system is then acceptable to HUD/FHA.  This includes numerous types of sewage systems including cesspools, individual pit privies and mound systems.  

Certifications are only required if the appraiser suspects a problem with the system, or problems are customary in the area.  The appraiser will require certification by the local health authority, a licensed sanitarian or an individual determined to be qualified by the lender.  Certifications obtained within three months prior to the appraisal may be acceptable if the appraiser and other parties in the transaction do not detect or know of possible existing problems.

• The following types of systems are not acceptable:

• Individual septic tank/drain field on a neighboring property

• Individual lagoon-type or other "open" systems

• The property should be rejected if it, or neighboring houses show indications of, and/or have had unsatisfactory operation of the sewage disposal system.

• The property should be rejected if inspection reveals repetitive failure of the subject system and/or neighboring systems, or in an area subject to flooding or seasonal high ground water tables.

Improvements such as driveways, parking areas, patios, etc. covering the drainfield are unacceptable due to the inability for future servicing and should be removed or the drainfield relocated.

For distances between water sources and sewage, see the water / plumbing section.