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G.    Operating & Abandoned Oil & Gas Well/Tanks/Pressure Lines - HUD Handbook 4150.2 Section 2-2.D.

Operating and abandoned oil and gas wells pose potential hazards to housing, including potential fire, explosion, spray and other pollution.  Therefore, no dwelling may be located closer than 300 feet from an active or planned drilling site or 75 feet from an operating well; this applies to the site boundary, not to the actual well location.


Underground Tanks -

If an underground tank has been abandoned, its removal or proper abandonment is required.  

a.  The appraiser should use a VC, indicate the location of the tank, and require evidence that the subject's vacated tank has been removed or properly abandoned.  

b.  Generally, the local jurisdiction may have established requirements.  If not, the tank must be removed or abandoned per the recommendations issued by the applicable State.


Hydrogen Sulfide Gas (Sour Gas Wells) - are extremely hazardous.  See HUD Handbook 4150.2, Section 2-2.D. “Special Case - …” for instructions.


Stationary Tanks - If the property is within 300 feet of a stationary storage tank containing more than 1000 gallons of flammable or explosive materials the location may be determined ineligible by the lender.  See HUD Handbook 4150.2, Section 2-2.M.  HUD approved lenders are responsible to determine the acceptability of a dwelling when the health and safety of the occupants or the continued marketability of the property may be in jeopardy.  

H.    Insulation Materials - See HUD Handbook 4150.1 Chapter 12


Asbestos Insulation - Asbestos used as roof shingles or siding on a house does not pose a danger as would be if the material were deteriorating within the confines of a home.  When used as a wrap for hot water pipes, it is usually covered and poses no danger.  When the material is deteriorating into a fine powder and can be inhaled, it may pose a danger to one’s health.

Asbestos wrapping around hot water pipes in the basement of a dwelling may be found in older homes.  If an appraiser notices this, he/she should make a note on the appraisal report that there appears to be asbestos insulation wrap around the hot water pipes.  If there is not obvious deterioration of the asbestos such as punctures or other damage, it should be left alone.  If there is obvious damage, the appraiser should annotate the valuation condition sheet and the lender should require an inspection by a professional in that field.


Foam Plastic Or Foam Core - See HUD Handbook 4150.1, P. 12-20, Section 20-21

I.    Lava Flow Zones - Based upon potential volcano activity, FHA mortgage insurance is not available in lava flow zones 1 and 2 Areas.

Copy Printed: REVISION  I

   02/16/0219       Revision Effective:  05-30-00

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