What are the requirements for properties having a shared well?

The Mortgagee must confirm that a Shared Well:

  • serves existing properties that cannot feasibly be connected to an acceptable public or community water supply system;
  • is capable of providing a continuous supply of water to involved dwelling units so that each existing property simultaneously will be assured of at least three gallons per minute (five gallons per minute for proposed construction) over a continuous four-hour period. (The well itself may have a lesser yield if pressurized storage is provided in an amount that will make 720 gallons of water available to each connected existing dwelling during a continuous four-hour period or 1,200 gallons of water available to each proposed dwelling during a continuous four-hour period. The shared well system yield must be demonstrated by a certified pumping test or other means acceptable to all agreeing parties.);
  • provides safe and potable water. An inspection is required under the same circumstances as an individual well. This may be evidenced by a letter from the health authority having jurisdiction or, in the absence of local health department standards, by a certified water quality analysis demonstrating that the well water complies with the Environmental Protection Agency’s (EPA) National Interim Primary Drinking Water Regulations;
  • has a valve on each dwelling service line as it leaves the well so that water may be shut off to each served dwelling without interrupting service to the other properties; and
  • serves no more than four living units or properties.

The Appraiser must report if the Property has a Shared Well and note any readily observable deficiencies. The Appraiser must also obtain a Shared Well Agreement and include it in the appraisal report so that the Mortgagee may review the agreement to determine eligibility. The Appraiser must also require an inspection and water testing under the same circumstances as an individual well.

Requirements for Well Water Testing

A well water test is required for, but not limited to, Properties:

  • that are newly constructed;
  • where an Appraiser has reported deficiencies with a well or the well water;
  • where water is reported to be unsafe or known to be unsafe;
  • located in close proximity to dumps, landfills, industrial sites, farms (pesticides) or other sites that could contain hazardous wastes; or
  • where the distance between the well and septic system is less than 100 feet.

All testing must be performed by a disinterested third party. This includes the collection and transport of the water sample collected at the water supply source. The sample must be collected and tested by the local health authority, a commercial testing laboratory, a licensed sanitary engineer, or other party that is acceptable to the local health authority. At no time will the Borrower/owner or other Interested Party collect and/or transport the sample.

The Mortgagee must obtain a valid water test from the local health authority or a lab qualified to conduct water testing in the jurisdictional state or local authority.

In addition to the guidance above, review the additional information regarding Shared Wells, including guidance for Shared Well Agreements, provided in Handbook 4000.1 II.A.3.a.ii(O)(3) and II.D.3.p.vi available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-03945