Markdown_files/FHA handbook/page_218.md

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## II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT

### A. Title II Insured Housing Programs Forward Mortgages

#### 3. Underwriting the Property

All testing must be performed by a disinterested third party. This includes the  
collection and transport of the water sample collected at the water supply  
source. The sample must be collected and tested by the local health authority,  
a commercial testing laboratory, a licensed sanitary engineer, or other party  
that is acceptable to the local health authority. At no time will the  
Borrower/owner or other Interested Party collect and/or transport the sample.

For both New and Existing Construction, the Mortgagee must ensure that the  
shared well agreement complies with the guidance provided in the following  
table.

| Item | Provisions that must be reflected in any acceptable shared well agreement include the following: |
|------|------------------------------------------------------------------------------------------------|
| 1    | Require that the agreement is binding upon signatory parties and their successors in title, recorded in local deed records when executed and recorded, and reflects joiner by any Mortgagee holding a Mortgage on any Property connected to the Shared Well. |
| 2    | Permit well water sampling and testing by the local authority at the request of any party at any time. |
| 3    | Require that corrective measures be implemented if testing reveals a significant water quality deficiency, but only with the consent of a majority of all parties. |
| 4    | Ensure continuity of water service to “supplied” parties if the “supplying” party has no further need for the shared well system. (“Supplied” parties normally should assume all costs for their continuing water supply.) |
| 5    | Prohibit well water usage by any party for other than bona fide domestic purposes. |
| 6    | Prohibit connection of any additional living unit to the shared well system without: <br> - the consent of all parties; <br> - the appropriate amendment of the agreement; and <br> - compliance with item 3. |
| 7    | Prohibit any party from locating or relocating any element of an individual sewage disposal system within 75 feet (100 feet for Proposed Construction) of the Shared Well. |
| 8    | Establish Easements for all elements of the system, ensuring access and necessary working space for system operation, maintenance, improvement, inspection and testing. |
| 9    | Specify that no party may install landscaping or improvements that will impair use of the Easements. |

*Handbook 4000.1*  
*Last Revised: 01/10/2025*  

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