FHA Require City hook up if available? (loan, credit, financing)

[ptownof4]

FHA Loan - want to purchase a home in a neighborhood using FHA Financing. The house is on septic but city sewer is available does FHA require you to hook it up prior to closing?

[SmartMoney]

Yes, in most cases the do.

[tel0004]

Where I live in Ohio when a sewer line is run you are required to hook up to it within 5 years, regardless of your septic condition.

[Pfhtex]

I'm doing one of these now.

The thing is, whomever pays for the install can get sizeable rebates if they pledge to live in the home for x number of years, at least on my deal.

So, we had the seller provide a credit equal to the amount of the install, but applied it to closing costs on a FHA203k loan, so that the actual work was paid for by the buyer, and wrapped into the loan.

[willow wind]

The FHA requirement is that if city sewer is in the street, you must hook to it. However, if the cost of the hook up costs more than 3% of the purchase price, the underwriter has the option to waive that requirement.

Waiving the requirement is not definite though. Many lenders have overlays above and beyond what FHA says. Much will depend on what their investors want.