Financing Homes With Wells and Septic in Placitas

Buying a home in Placitas often means a private well and a septic system. That can feel like extra hoops when you are trying to line up financing. You want a smooth closing and clear answers on what lenders require.

In this guide, you will learn what tests and documents lenders usually ask for, how Placitas water and septic systems are regulated, typical timelines and costs, and easy checklists for buyers and sellers. Let’s dive in.

How water and septic work in Placitas

Many Placitas homes rely on private or shared wells, while some neighborhoods use small community water systems. You can look up community systems and reports in New Mexico’s Drinking Water Watch to see operator details and recent water quality updates.

Septic systems are common outside sewered areas. The New Mexico Environment Department (NMED) permits onsite wastewater systems and keeps permit records. If you are buying or selling, it is smart to locate permits and a site plan early in the process.

Private well owners are responsible for testing and treatment. New Mexico public health resources recommend routine testing for bacteria and nitrate, and area-specific testing for constituents like arsenic and uranium that can occur naturally in central New Mexico. The state’s private well resource page explains what to test and how to manage records.

• NMED Liquid Waste (septic) program: Onsite Wastewater and permits
• Drinking Water Watch: Placitas community system lookup
• NM Department of Health: Private well resources

What lenders look for

Most loan programs require proof of a safe, adequate water supply and a functioning sewage system when a home is not on public utilities. HUD guidance for FHA loans lays out the framework appraisers and underwriters use, from basic water quality to well and septic observations.

VA loans

VA typically requires a water test for private wells, often including total coliform or E. coli, nitrate or nitrite, and lead. Tests must be completed by an independent certified lab, and results are commonly valid for about 90 days before closing. Shared wells may require capacity checks and legal agreements.

• Reference: VA loan water test requirements

FHA loans

FHA requires testing when a property is not connected to a public system, and water must meet local health standards or EPA standards. Appraisers also look for obvious septic issues and basic separations between wells and septic components. Shared wells must demonstrate adequate yield and have clear, recorded agreements.

• Reference: HUD guidance on individual water systems

USDA loans

USDA underwriting requires water that meets state or local standards. Test reports are often required to be no older than about 150 days at closing. If a shared well is involved, expect documented easements, maintenance agreements, and proof of capacity.

• Reference: USDA underwriting notes

Conventional loans

Conventional requirements vary by lender. Many will ask for a septic inspection and may require a water test if the appraisal or local policies flag a private well. Confirm specifics with your lender early.

Typical water test panels

Lenders often require microbiological tests for total coliform and E. coli plus nitrate or nitrite, and in some cases metals like lead. In central New Mexico, testing for arsenic and uranium is commonly recommended based on area conditions.

• Examples of lender test panels: FHA water quality test overview
• NM well testing guidance: Private well resources

Timeline and costs to expect

Here is a typical sequence for a Placitas escrow with a private well and septic:

1. First week under contract

• Identify the water source: private well, shared well, or community system. Confirm if the well is on the property or offsite.
• Request existing water test results, well permit or registration number, and septic permits or site plans.

2. Order lender-required water test

• Schedule sampling as soon as inspection begins. Lab turnaround is often 3 to 7 business days.
• Many programs have time limits on test age at closing. VA commonly accepts about 90 days, and USDA often allows about 150 days. If results fail, remediation and re-testing will add time.

3. Septic inspections and records

• Order a septic inspection. If records are missing or the system is older, request a permit search and design review through NMED’s tools.

Costs vary by property and lender requirements, but here are typical ranges:

• Basic lab panel for lender approval: about $100 to $400 depending on the lab and required parameters.
• Septic repairs or replacement have wide ranges based on site conditions and system type. NMED administers assistance programs for eligible homeowners who need to repair or replace failing systems. The EPA also summarizes funding options that may help with septic projects.

Helpful links:

• NMED septic permit tools: Liquid Waste online portal
• Funding options: EPA septic system funding

Common pitfalls in Placitas deals

Avoid delays and surprises by watching for these issues:

• Missing well registration or ownership transfer. Confirm the well is properly recorded and ownership is updated per state procedures, especially when a private well serves the home.
• Shared wells without recorded agreements. Lenders typically require maintenance agreements, easements, and proof of adequate capacity.
• Old septic systems without permits or location maps. Replacement or repairs can trigger design, permitting, and installation timelines.
• Expired water test results. Many loan programs have strict validity windows. Order tests early and keep an eye on closing dates.

Buyer checklist

Use this list during your inspection contingency:

• Confirm loan type early and ask your lender for a written list of water and septic requirements.
• Order a lender-acceptable water test. Include total coliform and E. coli, nitrate or nitrite, and consider arsenic and uranium given central New Mexico conditions.
• Schedule a septic inspection and request NMED permit records if documents are missing or the system is older.
• Verify well details: permit or registration number, location, well log if available, and any pump test or yield data required by your lender.
• For shared wells or community systems, collect recorded easements, maintenance agreements, bylaws, recent water quality reports, and information on fees or assessments.

Seller checklist

Get ahead of buyer and lender questions by gathering:

• Well documents: permit or registration number, past water test results, pump service invoices, and any shared well agreement with recorded easement.
• Septic documents: NMED permit, site plan with tank and drainfield, and any repair or pumping records.
• For community systems, the latest consumer confidence report and any notices of repairs or upgrades.
• Disclosures for any known water quality issues or septic work completed.

Make financing smoother in Placitas

With the right prep, a home on a well and septic does not have to slow you down. When you collect records early, test to your lender’s specs, and keep an eye on timelines, you protect your financing and your closing date.

If you want a clear plan tailored to your property and loan type, connect with Desiree Barton for local guidance from contract to close.

FAQs

What do lenders require for private wells in Placitas?

• Most lenders require a safe water supply confirmed by lab testing and a functioning septic system, with program-specific rules for VA, FHA, USDA, and conventional loans.

How long are water test results valid for loans?

• Validity windows vary by program, but VA often uses about 90 days and USDA often allows about 150 days. Ask your lender to confirm the exact deadline.

Can I finance a home on a shared well?

• Yes, if you can show adequate well capacity and provide recorded easements and maintenance agreements that meet your lender’s standards.

Where do I find septic permits or records?

• NMED maintains onsite wastewater permits and offers an online search tool; your inspector or agent can help you pull records and site plans.

Should I test for arsenic in Placitas?

• In central New Mexico, arsenic can occur naturally, so many buyers add arsenic to lender panels. Talk to your lender about required parameters and add any locally relevant tests.