The Appraiser must report when water to a property is supplied by dug wells, cisterns or holding tanks used in conjunction with water purchased and hauled to the site. The Appraiser must report whether such systems are readily accepted by local market participants and that the water supply system may violate Minimum Property Requirements (MPR) or Minimum Property Standards (MPS).
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 Mortgagee must ensure that the water quality meets the requirements of the health authority with jurisdiction. If there are no local (or state) water quality standards, then water quality must meet the standards set by the Environmental Protection Agency (EPA), as presented in the National Primary Drinking Water regulations in 40 CFR 141 and 142. FHAs regulations 40 CFR, 141 and 142 are available at https://www.ecfr.gov
For additional information see Handbook 4000.1 II.A.3.a.ii.(O)(2) and II.D.3.p.iii. at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh