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U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

 
July 27, 1995
 
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
 
Mortgagee Letter 95-34
 
TO: ALL APPROVED MORTGAGEES
 
SUBJECT: 1. Testing of Individual Wells
                  Rescission of Mortgagee Letter 94-36,
                  Clarification to Mortgagee Letter 92-18
         2. On-site Well and Septic System Inspections
 
Testing of Individual Wells
 
Mortgagee Letter 94-36 dated July 21, 1994, is hereby rescinded.
 
        Over the past several months, the Department met with representatives
from the industry and the Environmental Protection Agency (EPA) regarding
Mortgagee Letter 94-36. With their assistance and cooperation, procedures
for testing well water have been revised and simplified. These procedures
reflect monitoring for acute contaminants, lead and, if of local concern,
other contaminants. These requirements are consistent with EPA's Maximum
Contaminants Levels (MCL) for these contaminants and the testing methods
used are consistent with EPA's Analytical Methods for Regulated Drinking
Water Contaminants (59 FR 62456 dated December 5, 1994). Additionally, the
requirement for certifying new submersible pumps has been eliminated. The
Water Systems Council has informed EPA that the industry has eliminated
lead brass from all submersible pumps manufactured in the United States.
 
        Generally, State drinking water regulations contain both a list of
test parameters and accompanying maximum content levels (MCL). The test
parameters will normally include parameters with health and/or aesthetic
significance. If there is a MCL for a parameter which is not satisfied,
treatment of some kind is typically required. If a parameter has a MCL, it
is considered important enough to apply in the determination for treatment,
whether health related or not. Aesthetic parameters which are not satisfied
will prohibit routine use of the water which can affect livability and pose
health risks indirectly. Therefore, it is important to run all tests
required and recommended by each local and State standard for private
wells. If State or local standards are inadequate or non-existent, testing
should be done in accordance with HUD's requirements which are based on
EPA's Recommendation for private wells. MCL standards are applied at the
drinking tap and dictate the need for treatment.
 
        For FHA mortgage insurance, the following procedures are required
prior to accepting a house with an individual well:
 
        a.Well water must be tested in accordance with the latest local and
State drinking water regulation for private wells. This includes
all microbiological and chemical test parameters in the
regulation. If there are no local or adequate State requirements
and standards for private wells, then water quality must be
tested for lead and acute contaminants, including
nitrates/nitrites and microbial contaminants such as total and
fecal coliform and, if of local concern, other contaminants. For
information regarding acceptable test results and analytical
methods see attachment.
 
        b.The water sample(s) necessary for microbiological and chemical
testing must be tested in accordance with the State drinking
water regulations and EPA's analytical methods by a
State-certified private laboratory (see attachment). In some
States, County Health Authorities are required to collect the
test samples; however, if they are unable or are not required to
collect the samples, an individual/company acceptable to the
State and the laboratory may collect the samples.
 
        c.If water purification equipment is required to meet the State
drinking water regulation and/or EPA's recommendations for
private well water, follow the instructions in Mortgagee Letter
92-18 dated June 5, 1992.
 
        Mortgagee Letter 92-18 addressed the acceptance of individual
residential purification equipment in existing and proposed construction.
Paragraph B-3 of that Mortgagee Letter is now revised to read: "If there
are no local (or State) water quality standards for private wells, then
water quality must meet HUD's requirements for private well testing
contained in the attachment. To test for lead and acute contaminants. HUD's
requirements are based on EPA MCLs. Where other contaminants of local
concern or occurrence are tested for, the HUD requirement shall be the same
as EPA's MCL for that contaminant".
 
        If you have any procedural questions, you should contact your local
HUD Office. Technical questions should be referred to the EPA Drinking
Water Hot Line: 800-426-4791.
 
On-site Well and Septic Inspections
 
        This is a clarification of the Department's policy concerning on-site
well and septic system inspections outlined in HUD Handbook 4150.1 REV-1,
Valuation Analysis for Home Mortgage Insurance. The handbook states that
HUD Offices may accept only those on-site well and septic system
inspections performed by local health departments. In response to requests
by HUD Offices and industry representatives, State-licensed engineers may
now be used for such inspections which are performed for FHA insurance
purposes. This policy has been established in order to expedite inspection
requests and broaden inspection opportunities for qualified individuals.
 
        In order to perform on-site well and septic inspections for the
Department, engineers must meet the following criteria:
 
a.Hold a current State license which authorizes them to perform
such inspections;
 
        b.Perform inspections in accordance with the requirements and
standards established by the local or State health authority; and
 
        c.Utilize laboratories which are State-certified and meet EPA
standards.
 
        As the majority of on-site well and septic system inspections will be
performed through a Direct Endorsement lender, engineer qualifications
should be verified by individual lenders. Lender compliance will be
determined during normal mortgagee monitoring activities.
 
        Should you have any questions concerning this section of the Mortgagee
Letter, please contact your local HUD office.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing-
Federal Housing Commissioner
 
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