source:
  type: guide
  id: hud-4000-1-ii-o-utility-services
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — o. Utility
    Services (04/18/2023)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — o. Utility
    Services (04/18/2023).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-o-utility-services-full
  canonical_id: hud-4000-1-ii-o-utility-services-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — o. Utility
    Services (04/18/2023)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — o. Utility
      Services (04/18/2023)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'o. Utility Services (04/18/2023) i. Definition Utility Services
      refer to those services consumed by the public such as individual electric,
      water, natural gas, sewage, and telephone. ii. Required Analysis and Reporting
      The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if the
      subject Property is an attached, detached, or manufactured Single Family dwelling
      and the utilities are not independent for each living unit. This does not apply
      to ADUs. The Appraiser must also notify the Mortgagee of the deficiency of MPR
      or MPS if utilities are not located on Easements that have been permanently
      dedicated to the local government or appropriate public utility body. (A) Multiple
      Living Units Under Single Ownership A Property may contain multiple living units
      under a single Mortgage or ownership (two- to four-family Properties) that utilize
      common services, such as water, sewer, gas and electricity and is served by
      one meter in jurisdictions that allow single meter rental properties. In such
      cases, the Appraiser should note a deficiency of MPR or MPS if separate utility
      service shut-offs are not provided for each living unit. The Appraiser must
      notify the Mortgagee of the deficiency of MPR or MPS if utilities or services
      are not provided with independent shut-offs for each living unit, except common
      services such as laundry, storage space or heating, in two- to four-living unit
      buildings under a single Mortgage. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      D. Appraiser and Property Requirements for Title II Forward and Reverse Mortgages
      3. Acceptable Reporting Forms and Protocols (04/10/2025) Handbook 4000.1 837
      Last Revised: 11/26/2025 (B) Living Units Under Separate Ownership The Appraiser
      should not note the deficiency of MPR or MPS if the Property contains living
      units under separate ownership and part of a larger planned community, that
      utilize common utility services provided from the main to the building line
      when protected by an Easement or covenant and maintenance agreement, unless
      individual utilities serving a living unit pass over, under, or through another
      living unit without provision for repair and maintenance of utilities without
      trespass on adjoining properties, or legal provision for permanent right of
      access for maintenance and repair of utilities. If a single drain line in the
      building serves more than one unit, and the building drain clean-outs are not
      accessible from the exterior, the Appraiser must note the deficiency of MPR
      or MPS to the Mortgagee. iii. Public Water Supply Systems (A) Definition A Public
      Water Supply System refers to a system that is owned by a governmental authority
      or by a utility company that is controlled by a governmental authority. (B)
      Standard When a public water supply system is present, the water quality is
      considered to be safe and potable and to meet the requirements of the health
      authority with jurisdiction unless: • the Appraiser indicates deficiencies with
      the water or notifies the Mortgagee that the water is unsafe; or • the health
      authority with jurisdiction issues a public notice indicating the water is unsafe.
      (C) Required Analysis and Reporting The Appraiser must: • report any readily
      observable or known deficiencies with the water; • notify the Mortgagee when
      water is determined to be unsafe, report, and provide a cost to cure; and •
      address any impact on value and marketability, and make the appropriate adjustments.
      iv. Community Water Systems (A) Definition A Community Water System refers to
      a central system that is owned, operated, and maintained by a private corporation
      or a nonprofit property owners’ association. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      D. Appraiser and Property Requirements for Title II Forward and Reverse Mortgages
      3. Acceptable Reporting Forms and Protocols (04/10/2025) Handbook 4000.1 838
      Last Revised: 11/26/2025 (B) Standard A Community Water System must comply with
      local jurisdiction requirements. (C) Required Analysis and Reporting If the
      Property is on a Community Water System, the Appraiser must note the name of
      the water company on the appraisal report. v. Individual Water Supply Systems
      (A) Definition An Individual Water Supply System refers to a potable water source
      providing water to an individual Property. (B) Standard When an Individual Water
      Supply System is present, water quality must meet the requirements of the health
      authority with jurisdiction. If there are no local (or state) water quality
      standards, then water quality must meet the standards set by the EPA, as presented
      in the National Primary Drinking Water regulations in 40 CFR §§ 141–142. (C)
      Required Analysis and Reporting The Appraiser must report on the availability
      of connection to a public and/or Community Water System and any jurisdictional
      conditions requiring connection. When the Appraiser obtains evidence that any
      of the water quality requirements are not met, the Appraiser must notify the
      Mortgagee and provide an estimated cost to cure. The Appraiser must note the
      deficiency of MPR or MPS if the subject Property contains a well located within
      the foundation walls of an existing dwelling, unless there is evidence that:
      • the local jurisdiction recognizes and permits such a location; • it is common
      for the market area; and • it does not adversely affect marketability. A well
      located within the foundation walls of a dwelling is not acceptable for New
      Construction except in arctic or subarctic regions. The Appraiser must report
      when water to a Property is supplied by dug wells, cisterns, or holding tanks
      used in conjunction with water purchased and hauled to the site. The Appraiser
      must report whether such systems are readily accepted by local market participants.
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT D. Appraiser and Property Requirements
      for Title II Forward and Reverse Mortgages 3. Acceptable Reporting Forms and
      Protocols (04/10/2025) Handbook 4000.1 839 Last Revised: 11/26/2025 The Appraiser
      must note the deficiency of MPR or MPS if the subject Property has a water source
      that includes a mechanical chlorinator or is served by springs, lakes, rivers,
      sand-point wells, or artesian wells. A pressure tank with a minimum capacity
      of 42 gallons must be provided. However, pre-pressured tanks and other pressurizing
      devices are acceptable if delivery between pump cycles equal or exceed that
      of a 42-gallon tank. Tanks must be equipped with a clean-out plug at the lowest
      point and a suitable pressure relief valve. The Appraiser must note any readily
      observable deficiencies regarding the well and require test or inspection if
      any of the following apply: • the water supply relies upon a water purification
      system due to the presence of contaminates; • corrosion of pipes (plumbing);
      • areas of intensive agricultural uses within one quarter mile; • coal mining
      or gas drilling operations within one quarter mile; • a dump, junkyard, landfill,
      factory, gas station, or dry cleaning operation within one quarter mile; or
      • an unusually objectionable taste, smell, or appearance of well water. The
      Appraiser must also be familiar with the minimum distance requirements between
      private wells and sources of pollution and, if discernible, comment on them.
      The Appraiser is not required to sketch or note distances between the well,
      property lines, septic tanks, drain fields, or building Structures but may provide
      estimated distances where they are comfortable doing so. When available, the
      Appraiser should obtain from the homeowner or Mortgagee a copy of a survey or
      other documents attesting to the separation distances between the well and septic
      system or other sources of pollution. vi. Shared Wells (A) Definition A Shared
      Well refers to a well that services two to four homes where there is a binding
      Shared Well Agreement between the property owners that meets FHA requirements.
      (B) Required Analysis and Reporting If the Property has a Shared Well, the Appraiser
      must report it and note any readily observable deficiencies. The Appraiser must
      also obtain a Shared Well Agreement and include it in the appraisal report so
      that the Mortgagee may review the agreement to determine eligibility. The Appraiser
      must also require an inspection and water testing under the same circumstances
      as an individual well. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT D. Appraiser
      and Property Requirements for Title II Forward and Reverse Mortgages 4. Valuation
      and Reporting Protocols Handbook 4000.1 840 Last Revised: 11/26/2025 vii. Individual
      Residential Water Purification Systems (A) Definition An Individual Residential
      Water Purification System refers to equipment, either point-of-entry or point-of-use,
      installed on Properties that otherwise do not have access to a continuous supply
      of safe and potable water. (B) Required Analysis and Reporting If a Property
      is served by an individual residential water purification system, the Appraiser
      must indicate which type of system is installed on the Property, either point-of-entry
      or point-of-use. The Appraiser must report on the conditions requiring connection
      of the individual residential water purification system.'
  judgment: false
