Federal Housing Administration (FHA) loan:
Lending institutions have the responsibility to determine who is of 'due diligence' or 'qualified' to perform an inspection.
In 1996, the U.S. Department of Housing and Urban Development's (HUD) Circular Letter 96-01SF was issued by the HUD Seattle Office. It stated:
"On-site Well and Septic Inspections. FHA's policy of requiring the local Health Authority's approval of the well and septic systems has been revised. Now, FHA will accept on-site inspections performed by either the local health authority or "state licensed engineers." In the State of Washington, "state licensed engineers" included State licensed sanitarians, and county approved well drillers and septic system designers. Licensed sanitarians are qualified to inspect both private well and septic systems, while the "approved" well drillers may inspect only wells and septic designers may inspect only septic systems." (January 26, 1996, page 10.)
In 1997, the HUD Home Ownership Center issued a new policy guidance document stating that it is the lender's responsibility to ensure the OSS are permitted/approved and "adequate to service the property.
While the current policy does not list qualified individuals, the past Circular Letter 96-01SF noted above is used as guidance by the lending institutions.
For more information, contact the HUD's Processing and Underwriting Division in the Home Ownership Center toll free at 888-827-5605.
Veteran Administration (VA) loan:
VA loans allow only local health department sanitarians to perform an inspection, if requested by the appraiser.
In 2001, Circular 26-01-5, "Local" Requirements for VA Notices of Value was issued by the U.S. Department of Veterans Affairs. It states:
"Every Washington state property with an individual sewage disposal system requires evidence from the local health authority (or other source authorized by VA) that the system is acceptable." (June 20, 2001, page 9.)
No other source has been authorized by the VA for Washington state.
For more information, contact the VA's Washington Regional Office at 206-220-6163.
You can find the Circular 26-01-5 on the Department of Veterans Affairs website. Click on 'Circular 26-01-5 -- June 20, 2001.'