Chapter 1
Appraisal and Property requirements
Page 1-21c

1. General - Shared wells may serve existing properties that cannot feasibly be connected to an acceptable public or community water supply system. A shared well shall have a valve on each dwelling service line as it leaves the well. A shared well shall service no more than four living units or properties.

2. Well agreement - A shared well must have a shared well agreement and shall be binding upon signatory parties and their successors in title. More information on this agreement can be referenced in  HUD Handbook 4150.1 Rev-1, Section 12-17.

3. Water testing - Shared wells are covered by the guidance issued in Mortgagee Letter 2005-48. The mortgagee letter states that individual water systems no longer require automatic testing or inspection unless such testing or inspection is mandated by the state or local jurisdiction; it is believed that the water may be contaminated; when the water supply relies upon a water purification system due to the presence of contaminants; or when there is evidence of:

A. corrosion of pipes
B. areas of intensive agriculture within ? mile
C. coal mining or gas drilling operations within ? mile
D. dump, junkyard, landfill, factory, gas station, or dry cleaning operation within ? mile
E. unusually objectionable taste, smell or appearance of well water.

The lender also has the option to require testing.

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