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Old 07-11-2015, 06:14 PM
14 posts, read 21,912 times
Reputation: 10


We are working on buying a new home w/ a USDA loan and the appraisal came back w/ the following: "county water is available to the subject and tie in is required"

I've researched USDA.gov documents and can't find anything that states this is a requirement - can anyone provide insight here. I plan to discuss w/ our loan officer on Monday, but she's the one that said the tie in was required, so I kind of feel like i'm stepping on her toes to research it, but it' a lot of money our sellers are paying and if it's not truly required, i don't see the point.

The house has a properly functioning well currently. THe appraisal said tie in is required, but didn't say anything about running the water to the house.
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Old 07-11-2015, 06:58 PM
Location: Roanoke, VA
1,680 posts, read 3,057,358 times
Reputation: 904
Why don't you post in the Mortgages sub-forum of the Real Estate forum? You may have better luck getting an answer there.

Good luck.
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Old 07-11-2015, 07:04 PM
Location: Roanoke, VA
1,680 posts, read 3,057,358 times
Reputation: 904
I found this online in
This is on p. 12-12:
Individual water systems are owned and maintained by the homeowner and
subject to compliance with all requirements of the local and/or State Health
Authority codes. Individual water supply systems may be acceptable when the
cost to connect to a public or community water system is not reasonable as
defined by the lender. The lender is responsible for determining if connection is

This is the HB-1-3550 Direct Single Family Housing Loans and Grants - Field Office Handbook.
Is your loan a Direct Loan or a Guaranteed Loan? I suspect the requirements are the same, however.
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Old 07-11-2015, 07:06 PM
7,695 posts, read 12,845,131 times
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My guess is that it means that if you wanted the county water supply it would require a tie in to the
county lines..
But not that the tie in is required for loan approval..
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Old 07-12-2015, 07:10 AM
10,271 posts, read 6,500,789 times
Reputation: 10847
I think the lender is afraid that the township will require you, at some point, to connect to city water at a charge of 10s or thousands of dollars.
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Old 07-12-2015, 08:26 AM
7,598 posts, read 17,623,584 times
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Government backed loans are notorious for requiring hookup to the local municipality upon becoming available. The appraiser putting the requirement on the report makes me think (don't know as fact) this will be required. Remember, the value was contingent on this work being done. If he is asked to remove his condition, the value will likely decline. Also, not all USDA rules/regulations are unilateral across the country, each region is permitted latitude on various items, with the exception of entitlement (who is eligible). Be very careful when researching online that the directive is from your region.

And, let's assume you find it, aha, it's not required. That only helps you if your lender is a direct lender. If your lender is delivering to a specific investor, your lender cannot deviate from their overlay. When I was originating USDA loans, my bank only had 2 sources in my area where we could send our USDA loans, we had to deliver to their rules, not USDA's.

But, even if not required to be put in before closing, you are now on notice when you go to sell (we know, you plan to live there for a long, long time) you will be hit with the cost of water hookup. Or, consider the fact you will not get another permit to drill a new well should yours run dry or become contaminated (probably the most likely).

If you want this property and it is confirmed the water must be hooked up is required, you need to decide if you are willing to walk away, or if willing to contribute, and if so, just how much.
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