Kathryn Carol…, Other/Just Looking in 47460

Will a buried oil furnace tank disqualify a home for a USDA Home Loan?

Asked by Kathryn Carol Galimore, 47460 Sun Jul 10, 2011

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4
Jody Jones, Agent, Elkhart, IN
Sun Jul 10, 2011
My husband and I dealt with this issue in Florida. We were going for a conventional mortgage. We had the tank removed by a qualified company. The tank was nearly full of fuel oil and we had to have it sucked out first then tests run to be sure it hadnt leaked into the surrounding soils.

You could be liable for any soil contamination, now or in the future. If I were you, I wouldn't buy the home unless the sellers removed the tank prior to closing. If they are unable or refuse to do that, then do your research and decide if you are willing to take on the expense of removing it.

Good Luck!
Jody Jones
574 214 2746
1 vote
Jknoxs, , Decatur, IL
Sat Apr 14, 2012
I was trying to close on a house and the appraiser from the bank took a picture of the fill port of the tank sticking up between the brick pavers in the back of the house.

It's absurb to think this is a serious environmental threat , however the government is involved so...

Worst case scenario is that the lender will want the tank removed. Better case scenario is that the lender will allow you to 1)pump the tank 2)backfill the tank in place with fill sand 3)test the surrounding soil

I had the tank pumped (must be properly documented, waste manifest), you can't pump it yourself and dump the oil. I ordered 7 tons of sand, cut the top of the tank open, and backfilled it myself. Lastly, you have to have a licensed engineer take soil samples, which is the most expensive part.

Pump and Dispose: $900
Cut tank and backfill: $150
Soil Samples: $1200

You need to determine the cost to pump and either backfill/remove the tank by getting some quotes, and then decide how you want to proceed from there.
0 votes
Laura Feghali, Agent, Stamford, CT
Mon Jul 11, 2011
Hello Kathy,
Yes, there may be some lenders who may not approve a buyer's loan with a buried oil tank on the property. I suggest that you contact a local lender in the area to inquire about it.
Good luck!

Laura Feghali
Prudential Connecticut Realty
0 votes
Christopher…, Agent, Methuen, MA
Sun Jul 10, 2011
This site may help you out. I would try contacting them or talk with a mortgage professional that deals with USDA loans.
0 votes
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