Oil heat is common in southeastern Massachusetts — and underground oil tanks are one of the most common deal-killers for financed buyers. Here's why, and what you can do about it.
Oil heat is standard throughout southeastern Massachusetts — Bristol County, Plymouth County, and Norfolk County homes were built before natural gas reached many neighborhoods. Above-ground tanks are generally accepted by lenders. Underground tanks are a different matter.
Massachusetts follows MassDEP's Underground Storage Tank regulations (310 CMR 22.00). An active residential UST is an environmental liability — if the tank leaks, the contamination plume can travel to neighboring properties and groundwater. Lenders know this. FHA, VA, conventional, and most private lenders refuse to fund a mortgage on a property with an active underground oil tank without first requiring removal and a MassDEP closure letter confirming no soil contamination.
| Tank Type | Lender (FHA/VA/Conv) | Cash Buyer |
|---|---|---|
| Active above-ground oil tank (AST), < 10 years old | Most lenders accept if properly maintained, no leaks, compliant fittings | Accepted as-is; no certificate required |
| Active above-ground oil tank (AST), aging or rusted | Many lenders flag; FHA may require removal | Accepted as-is; no removal required |
| Underground oil tank (UST) — active, no leak history | Nearly all lenders refuse — environmental liability too high | Accepted as-is; no removal or phase-out required |
| UST — abandoned in place (AIP) | Lenders require MassDEP closure letter before funding | Accepted as-is with tank in place |
| UST — known leak / soil contamination | All conventional lenders refuse; FHA and VA refuse | Case-by-case; cash buyer assesses remediation cost in offer |
| UST removed, MassDEP closure letter obtained | Lenders accept once closure letter confirms no contamination | Fully accepted — clean closure removes all barriers |
Active UST, abandoned in place, aging AST — we buy Massachusetts oil tank properties as-is. Cash offer in 24 hours.
Call (401) 396-7427Get Cash Offer →Not legally — but nearly all lenders refuse to fund a mortgage on a home with an active underground oil tank. To sell to a financed buyer, the UST must be removed and you need a MassDEP closure letter. A cash buyer closes without that requirement.
Above-ground tank removal: $500–$1,500. UST removal (no contamination): $1,500–$5,000. If contamination is found: $10,000–$100,000+ depending on plume extent. Phase II environmental assessment: $2,000–$4,000 before remediation.