Short answerFHA, VA, and USDA all require a safe water supply and working sewage disposal. With a private well, lenders commonly require a water test. With septic, they may require an inspection, especially if the appraiser sees signs of trouble. Exact tests, distances, and timing depend on the program, the lender, and the county health department.
What usually gets checked?
- Water quality. Commonly bacteria, nitrates, and nitrites, tested by a certified lab.
- Water supply. Adequate flow and pressure.
- Well location. Required distances from the septic tank, drain field, and other sources of contamination.
- Septic function. No surfacing sewage, backups, or failure signs. Some lenders require an inspection.
The county health department permits septic systems in Indiana and keeps records of many of them. Ask the county for the permit file on any rural home.
If you are selling
Gather your well and septic records before listing: pumping receipts, water tests, and permits. Consider a fresh water test and a septic pump and inspection so you know what a buyer's lender will see. Your listing paperwork may include a well and septic information sheet.
If you are buying
Ask your lender early exactly which tests are required and who orders them. Build lab turnaround time into your schedule. What wells and septic systems cost to own.
Frequently asked questions
Who pays for the well water test?
It is negotiated in the purchase agreement. Buyers often pay, and sellers sometimes provide a recent test.
What happens if the water test fails?
Often a well can be shocked and retested, or a treatment system added. The lender will say what it needs to close.
Can I get an FHA loan on a home with a septic system?
Yes, if the system works and meets the lender's and county's requirements.
Keep reading
Want to know what a buyer's inspector may find before they do?
Book a free pre listing condition walk. I walk the house with you, point out what inspectors and FHA, VA, and USDA appraisers tend to flag, and give you planning ranges so you can decide what to fix, credit, price in, or disclose.
Book a condition walkOr call or text (812) 525-5489, or email john@yourpropertynegotiator.com.
The condition walk is a REALTOR® and contractor evaluation, not a home inspection, and it does not replace one. If you have already signed a listing agreement with another agent, please take these questions to your agent.
Looking at a house and not sure what you are getting into?
Ask for a free Before You Offer review. Send me the listing. I look over the photos, the seller's disclosure, and recent sales, then flag likely condition issues and planning cost ranges before you write an offer.
Request a Before You Offer reviewOr call or text (812) 525-5489, or email john@yourpropertynegotiator.com.
The Before You Offer review is a REALTOR® and contractor review of the listing, not a home inspection. It is for buyers who are not already working with an agent. If you have an agent, please bring these questions to your agent.
Sources
- HUD Handbook 4000.1; VA Pamphlet 26 7, Chapter 12; USDA HB 1 3555, Chapter 12 (water supply and sewage disposal)
- Indiana Department of Health, onsite sewage systems program
Written by John Long, REALTOR®, 1 Percent Lists Indiana Real Estate. Working contractor who has priced hundreds of home inspection repair requests. Former labor relations negotiator for a major manufacturer and U.S. Coast Guard veteran.
John Long, REALTOR® · 1 Percent Lists Indiana Real Estate · (812) 525-5489 · yourpropertynegotiator.com
This page is general information, not a substitute for a professional home inspection, and not legal, tax, insurance, or lending advice. Ask a real estate attorney about contracts and disclosure, a CPA about taxes, your lender about loan rules, and a licensed inspector or tradesperson about your house. Nothing here guarantees a sale price, net proceeds, repair cost, payment, timeline, appraisal, inspection result, or loan approval. Cost figures are planning estimates, not bids. I own Wardmark Property Operations LLC, a contracting company. You are always free to use any contractor you choose.