I did one in VA about 2.5 years back. foreclsure too.

fridge was very frothy and was taken out during the t/o.

seller did do repairs to make the deal work but did not put in a new fridge-(was not asked to).

Possible buyer stuck his own in there without anyone knowing but I do not recall and it was never an issue.

I wasn't asking about bacteriologic criteria; but the mineral tests. I've been doing sales using USDA Loans (Rural Development and FmHA before that) for over 20 years and NEVER had to go beyond a bacteria test for E. Coli and total coliform in the past.

Firstly, we had a successful simple bacteria test back in June.

It's the USDA which is now imposing the test for Lead, Nitrites and Nitrates yet they don't have any criteria for what constitutes a successful test. They just insist on the test being conducted! The State Public Health Dept has NO such requirement!

Our problem today is that the E. Coli and coliform test must be taken from the same sample as the Mineral test, and now, a new bacteria test failed and must be repeated, requiring a more expensive procedure and a utilizing a more sophisticated (really?) laboratory . . . . and more money . . . . a lot more money and the loss of time . . . . plus sanitizing the well and driving a new water 180 miles over to the special lab that did the mineral test, all because the local Hospital's Laboratory only does bacteria tests; even though the bacteria test is all that we now need repeated. Maybe they think this activity will stimulate the economy?

Meanwhile, this ineptness will succeed in killing this transaction. It's only been in the cooker since May.

The investors that purchase the loans have all of these overlays in place, and it is not USDA who is requiring this extra step. Investors are either aggressive or conservative. Most are very conservative right now due to all the losses they have had.

Just to be sure, has this file been fully approved by the lender? Was it then shipped off to USDA for their final review and in this review they requested the additional testing? If not, it is the invester/lender requiring it and not USDA.

I have had investors require this extensive testing in the past, but none that I deal with currently. If the test failed, the water could be un-safe to drink. The house should not create any safety concerns (USDA Rule), so I see why investors would make this a requirement, but at the same time, hardly any go this far with the water.

Everything is in place for a reason. Maybe, the water has been consumed for a long time, and no one has been sick because of it, but if it were a more severe contamination, it could end up being the death of a borrower and another foreclosure which would not stimulate anyone involved.

The lender that I use for these loans has informed me that PMI will be added to the USDA loans starting Oct 1st. Bummer for the buyers

I received an advisory that might be interpreted as an improvement, and that the October 1st, 2011 change REDUCES the PMI one-time upfront fee from 3.5% to only 2%.

Coincidental with the change in the up-front Fee, the program will begin to implement an annual fee of .3% which will probably be added to the mortgagor's monthly payment (an increase of .0025% of the principal) and accumulated in escrow. The Lender must still pay the Fee annually for the life of the Loan.

It just spreads out the cost and should make it a bit easier for 1st time home buyers to get in the door; but is supposed to make the program "Subsidy Neutral".

I can attach a link to this advisory . . . . it's:

USDA Rural Development Administrative Notice 4551