Surveys & FHA Loans: What You Need to Know

new-hope-pa-septic-system-installationI was recently working a purchase for a buyer using an FHA loan and I get a call from the lender the day before closing saying that the septic tank and the well are not 50 feet apart as required by FHA guidelines, so we can’t close this deal. WHAT?! I am aware that there are certain housing guidelines that must be satisfied for an FHA loan, but this was not one of them I knew about!

My first question was, “are you sure the surveyor did it right because the seller said that the septic tank was up front”. He assured me that the surveyor found it in the back with the well and that it was too close. Apparently a remedy for this is to call the local municipality and have them override it, but he said that process could take up to three weeks. We didn’t have three weeks, my buyers had to be out of their rental in 5 days! So what do we do?! Luckily my client was able to qualify for a conventional loan product and get closed within the 5 days, but what if they couldn’t and I had to tell them they couldn’t buy this house? That was just unacceptable and I felt I was doing a major disservice to my client, after all it was my job to know these things!

So for all the agents out there working on FHA loans, here is the scoop so you can better serve your clients:

1) If you have a property with a septic tank make sure you inquire about a survey as soon as possible! If the seller does not have one that can be used then make sure that one is ordered after the appraisal is found to be satisfactory. Give ample time in case you have issues that come up.

2) The LENDER requests a survey with the septic through the TITLE REQUEST that they send to the title company or attorney. It is always a good idea to make sure your title agent or attorney is aware that the loan is FHA so that they can make sure to keep an eye out for anything that might not be FHA compliant.

3) “For an FHA appraiser to pass your well, it must be at least 50 feet from your septic tank and at least 100 feet from the septic tank’s drain field. In addition, the well cannot be within 10 feet of your property line. The appraiser can also test for chlorination in the water. If the well is inoperative, it must be filled with at least 20 feet of concrete and capped.” (

I am glad that this worked out this time and my clients weren’t horribly mad at me for this, but I am even more happy that I was able to find this out so I can prevent it from happening in the future!



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