Dear Sue,
My home is located in north Auburn and is on Bowman Ditch water.
I have a filter system, chlorinator and holding tank in my garage. I am contemplating selling someday and need to know what I should do at this time.
Some of my neighbors have been unable to successfully install a well because their lots are too narrow, or where a well could be drilled it’s too close to their sewer leach line.
Is it true that a bank will not loan on a home with a water system such as mine? What options do the people have who built homes 30 years ago and had no other option for water?
I am thinking if it is impossible to put in a well and my home will not sell, then maybe I should go for a reverse mortgage (I am retired) since my children won’t be able to sell my home some day. I may as well spend the equity.
Would a reverse mortgage lender require me to put in a well? Is it possible that they won’t give me a reverse mortgage if they could not resell the home later?
I am confused as to what I need to do at this time.
Thank you for your interest.
~ Anxiously awaiting
your reply
Dear Anxious,
Many Placer County residents get their drinking water from canals. The raw water is pumped from a nearby canal and piped through a filtering and chlorination system.
Some of the newer state-of-the-art systems utilize a special ultraviolet light for killing bacteria. The systems are owned and privately maintained by the homeowner.
Private filtration systems were once considered commonplace in spotty well areas and where treated water was not available.
At one time private water filtration systems were acceptable to both the county’s Environmental Health Division and mortgage lenders. It wasn’t until 1983 that the county stopped issuing building permits for homes that required private water filtration systems.
Since the systems don’t meet current water treatment technology and there’s no monitoring for continuous water quality, the Environmental Health Division now regards private filtration systems as substandard and inadequate.
I spoke to an environmental health technician who told me that the Environmental Health Division will not issue a building permit for a remodel or expansion of a dwelling that relies on a private water filtration system. The property must be served by well or publicly-treated water.
The technician suggested that a homeowner with an existing private water filtration system make every effort to drill a well, or connect to the nearest public water system. If setbacks are a factor, he suggested that the homeowner apply for a $150 variance. He said it is possible that site conditions may allow for one. He also explained that recent development might have brought the public waterline close enough to feasibly hook up.
If a variance is not an option, an easement from a neighboring property owner could be explored. If that’s not an option, sharing a neighbor’s existing well is a possibility worth considering, especially in these economic times. However, he pointed out that sharing another person’s well should be a last resort.
I made calls to several lenders in an effort to get information about financing a home on a private filtration system. One lender that I talked to explained to me that they would need at least two comparable sales of homes on private-filtration systems. The sales had to be within the last nine months.
I spoke with Pat Johnson at US Bank. She said that her bank would consider lending on the property if the borrower was a good US Bank customer. The bank would portfolio the loan (keep it in house).
Based on this information I would suggest that you call your lender, credit union or a community bank and ask them what they are willing to do for you. Financing is available but it won’t be easy.
In regards to a reverse mortgage, the same lending guidelines will apply.
You need to decide what it is you want to do. If you want to sell, your future buyer will need to acquire a loan. Your agent should provide the financing information in advance so that the buyer is not taken by surprise.
Remember that you can buy with a reverse mortgage as well.
If you want to remain in the property and take advantage of your equity, apply for a reverse mortgage.
As you can see, the financing will be tricky but doable, especially for the persistent. Good luck. Let me know how it turns out.
Sue Thompson is owner and sales manager of HomeTown Realtors in Auburn. She can be reached at seesue@seehometown.com, or on the Web at homedollarsandsense.com.
