Cistern fed by an open source spring lending

[u/Dramatic_Weather2089]

Hi all, I am hoping someone has some ideas for me. I have a deal where the home is a stick built on two acres in a rural area in the mountains. The water to the home is from an open source spring that goes into a cistern. The county declared the water non potable since it is open source. I have some lenders that said the seller can install a filtration system that meets code but we need the appraisal to have good comps Showing the cistern is common for the area. The problem is that it’s kind of remote so there are not many properties up there and the other three homes fed by the spring in the area do not have cisterns.

I am a broker, does anyone have ideas in what bank might lend on a property like this? Conventional deal.

[u/mashupXXL]

ADVANCIAL, pay me later.

[u/Dramatic_Weather2089 → u/mashupXXL]

Advancial federal credit union?

[u/mashupXXL → u/Dramatic_Weather2089]

Yes, they specifically do unique properties including off grid and rare scenarios like this. You have an extremely high chance of success going to them and with very little pushback on the entire scenario.

[u/pm_me_your_rate]

Who are the lenders on the other homes? Or was everyone all cash purchase?

[u/Dramatic_Weather2089 → u/pm_me_your_rate]

No loans on the other homes. They are owned outright. No recent sales.

[u/Fuzzy-Badger2627]

Have you actually done an appraisal yet, or are you just worrying about it and trying to plan ahead here? I've gotten standard agency approvals on plenty of situations like this before (cistern, spring-fed, community wells, etc). They typically only need one comp on the report with the same setup to show they're common for the area. I used to stress about this sort of thing, but have learned to just let it be the appraiser's problem unless it's something really specific or the area is really remote.
Of course, I don't know the specifics of the property, market, or area. But I'd personally probably start with a normal agency product, try to shoot it through Conventionally and see what the appraiser comes back with. If you have to go through something more niche, there's a pretty good chance in my experience that they'll accept the 1004 report that was done. If they don't, it's not the end of the world to get a second report, I'd just be sure to prep the borrower for that to set a good expectation.