The Federal Housing Administration's insurance programs help borrowers acquire financing for property of various types in the Unites States. The FHA insures loans made on single-family homes, including manufactured housing. Septic systems are commonplace in some areas, including suburbs, small towns and rural areas. The FHA insures loans made on homes without sewer connection, which rely on small sewage treatment systems, but septic system must meet local and FHA guidelines for health and sanitation.
Septic System Basics
Lenders making FHA loans must use FHA-approved appraisers, who are state-certified and knowledgeable about the Department of Housing and Urban Development's property standards, to perform appraisal inspections. HUD governs FHA insurance programs.
Properties and borrowers must meet HUD's minimum requirements for insurance. The lender uses the appraisal report as a basis for FHA loan approval. The appraisal must denote any apparent defects in the septic systems and may call for further investigation and repair before gaining FHA approval.
Septic System Requirements
A home serves as collateral for an FHA-insured loan. It is important that the lender analyze its condition to ensure that the home is marketable and free of health and safety hazards. As such, a home's septic system must adhere to the rules set forth by the property's local jurisdiction, as well as HUD's standards.
Because an FHA appraiser's knowledge of local codes is limited, the lender may need to contact the local authority or require an inspection report for compliance details. Costs associated with repair requests are usually passed on to the borrower.
Septic System Specifications
If the local health authority with jurisdiction does not specify requirements for septic systems, the home must adhere to HUD's requirements. Septic systems must dispose of domestic wastes without creating a nuisance or endangering the public health.
Pit privies, or toilets used by squatting rather than sitting, are acceptable if customary for the area and the only means of waste disposal, HUD says. They must be installed according to local Department of Health requirements. Furthermore, a septic tank must be located at least 50 feet from domestic wells and the tank's drain field at least 100 feet from wells.
Septic System Hazards
The poor installation, maintenance or use of a septic system can create serious health hazards for occupants and the environment. Soil provides most of its wastewater treatment, acting as a natural buffer zone which filters out bacteria and viruses, keeping the contaminants from reaching groundwater. The soil absorption area, known as the drainfield, is several feet deep. HUD does not specify an appropriate depth, as it is based on the number of people using the facility, soil characteristics and site geology.
Most states have standards for the construction and repair of septic systems, according to The Water Encyclopedia. Each locality also has regulations, and a professional inspector and the FHA lender require the system to meet these codes.
K.C. Hernandez has covered real estate topics since 2009. She is a licensed real estate salesperson in San Diego since 2004. Her articles have appeared in community newspapers but her work is mostly online. Hernandez has a Bachelor of Arts in English from UCLA and works as the real estate expert for Demand Media Studios.