404.03: Utilities

For a mortgage to be eligible for purchase or securitization, the utilities of the property must meet community standards and be adequate, in service, and accepted generally by area residents.  If public sewer and/or water facilities -- those that are supplied and regulated by the local government -- are not available, then community or private well and septic facilities must be available and utilized by the subject property.  If community facilities are used, the owners of the subject property must have the right to access those facilities, which must be viable on an ongoing basis.  Generally, private well or septic facilities must be located on the subject site.  However, off-site private facilities are acceptable if the inhabitants of the subject property have the right to access them and if there is an adequate, legally binding agreement for their access and maintenance.

If there is market resistance to an area because of environmental hazards or any other conditions that affect well, septic, or public water facilities, the appraiser must comment on the effect of the hazards on the marketability and value of the subject property (as discussed in Section 307).