diff --git a/source/dub/dub.d b/source/dub/dub.d
index 22c52a3..c3853b0 100644
--- a/source/dub/dub.d
+++ b/source/dub/dub.d
@@ -92,9 +92,8 @@
 		PackageManager m_packageManager;
 		PackageSupplier[] m_packageSuppliers;
 		Path m_rootPath;
-		Path m_tempPath;
-		Path m_userDubPath, m_systemDubPath;
-		Json m_systemConfig, m_userConfig;
+		SpecialDirs m_dirs;
+		DubConfig m_config;
 		Path m_projectPath;
 		Project m_project;
 		Path m_overrideSearchPath;
@@ -133,25 +132,16 @@
 
 		PackageSupplier[] ps = additional_package_suppliers;
 
-		if (skip_registry < SkipPackageSuppliers.all) {
-			if (auto pp = "registryUrls" in m_userConfig)
-				ps ~= deserializeJson!(string[])(*pp)
-					.map!(url => cast(PackageSupplier)new RegistryPackageSupplier(URL(url)))
-					.array;
-		}
-
-		if (skip_registry < SkipPackageSuppliers.all) {
-			if (auto pp = "registryUrls" in m_systemConfig)
-				ps ~= deserializeJson!(string[])(*pp)
-					.map!(url => cast(PackageSupplier)new RegistryPackageSupplier(URL(url)))
-					.array;
-		}
+		if (skip_registry < SkipPackageSuppliers.all)
+			ps ~= m_config.registryURLs
+				.map!(url => cast(PackageSupplier)new RegistryPackageSupplier(URL(url)))
+				.array;
 
 		if (skip_registry < SkipPackageSuppliers.standard)
 			ps ~= defaultPackageSuppliers();
 
 		m_packageSuppliers = ps;
-		m_packageManager = new PackageManager(m_userDubPath, m_systemDubPath);
+		m_packageManager = new PackageManager(m_dirs.userSettings, m_dirs.systemSettings);
 		updatePackageSearchPath();
 	}
 
@@ -172,19 +162,21 @@
 	private void init()
 	{
 		import std.file : tempDir;
-		version(Windows){
-			m_systemDubPath = Path(environment.get("ProgramData")) ~ "dub/";
-			m_userDubPath = Path(environment.get("APPDATA")) ~ "dub/";
+		version(Windows) {
+			m_dirs.systemSettings = Path(environment.get("ProgramData")) ~ "dub/";
+			m_dirs.userSettings = Path(environment.get("APPDATA")) ~ "dub/";
 		} else version(Posix){
-			m_systemDubPath = Path("/var/lib/dub/");
-			m_userDubPath = Path(environment.get("HOME")) ~ ".dub/";
-			if(!m_userDubPath.absolute)
-				m_userDubPath = Path(getcwd()) ~ m_userDubPath;
+			m_dirs.systemSettings = Path("/var/lib/dub/");
+			m_dirs.userSettings = Path(environment.get("HOME")) ~ ".dub/";
+			if (!m_dirs.userSettings.absolute)
+				m_dirs.userSettings = Path(getcwd()) ~ m_dirs.userSettings;
 		}
 
-		m_tempPath = Path(tempDir);
-		m_userConfig = jsonFromFile(m_userDubPath ~ "settings.json", true);
-		m_systemConfig = jsonFromFile(m_systemDubPath ~ "settings.json", true);
+		m_dirs.temp = Path(tempDir);
+
+		m_config = new DubConfig(jsonFromFile(m_dirs.systemSettings ~ "settings.json", true), m_config);
+		m_config = new DubConfig(jsonFromFile(Path(thisExePath).parentPath ~ "../etc/dub/settings.json", true), m_config);
+		m_config = new DubConfig(jsonFromFile(m_dirs.userSettings ~ "settings.json", true), m_config);
 
 		determineDefaultCompiler();
 	}
@@ -402,7 +394,7 @@
 				if (basename == rootbasename) continue;
 
 				if (!m_project.selections.hasSelectedVersion(basename)) {
-					logInfo("Package %s can be installed with version %s.",
+					logInfo("Non-selected package %s is available with version %s.",
 						basename, ver);
 					any = true;
 					continue;
@@ -638,8 +630,8 @@
 		Path placement;
 		final switch (location) {
 			case PlacementLocation.local: placement = m_rootPath; break;
-			case PlacementLocation.user: placement = m_userDubPath ~ "packages/"; break;
-			case PlacementLocation.system: placement = m_systemDubPath ~ "packages/"; break;
+			case PlacementLocation.user: placement = m_dirs.userSettings ~ "packages/"; break;
+			case PlacementLocation.system: placement = m_dirs.systemSettings ~ "packages/"; break;
 		}
 
 		// always upgrade branch based versions - TODO: actually check if there is a new commit available
@@ -1088,10 +1080,7 @@
 	{
 		import std.process : environment;
 
-		m_defaultCompiler = m_userConfig["defaultCompiler"].opt!string();
-		if (m_defaultCompiler.length) return;
-
-		m_defaultCompiler = m_systemConfig["defaultCompiler"].opt!string();
+		m_defaultCompiler = m_config.defaultCompiler;
 		if (m_defaultCompiler.length) return;
 
 		version (Windows) enum sep = ";", exe = ".exe";
@@ -1376,3 +1365,39 @@
 		return null;
 	}
 }
+
+private struct SpecialDirs {
+	Path temp;
+	Path userSettings;
+	Path systemSettings;
+}
+
+private class DubConfig {
+	private {
+		DubConfig m_parentConfig;
+		Json m_data;
+	}
+
+	this(Json data, DubConfig parent_config)
+	{
+		m_data = data;
+		m_parentConfig = parent_config;
+	}
+
+	@property string[] registryURLs()
+	{
+		string[] ret;
+		if (auto pv = "registryUrls" in m_data)
+			ret = (*pv).deserializeJson!(string[]);
+		if (m_parentConfig) ret ~= m_parentConfig.registryURLs;
+		return ret;
+	}
+
+	@property string defaultCompiler()
+	const {
+		if (auto pv = "defaultCompiler" in m_data)
+			return pv.get!string;
+		if (m_parentConfig) return m_parentConfig.defaultCompiler;
+		return null;
+	}
+}
diff --git a/test/issue895-local-configuration.sh b/test/issue895-local-configuration.sh
new file mode 100755
index 0000000..8edc10f
--- /dev/null
+++ b/test/issue895-local-configuration.sh
@@ -0,0 +1,25 @@
+#!/usr/bin/env bash
+set -e
+
+cd ${CURR_DIR}
+mkdir ../etc
+mkdir ../etc/dub
+echo "{\"defaultCompiler\": \"foo\"}" > ../etc/dub/settings.json
+
+if [ -e /var/lib/dub/settings.json ]; then
+	echo "Found existing system wide DUB configuration. Aborting."
+	exit 1
+fi
+
+if [ -e ~/.dub/settings.json ]; then
+	echo "Found existing user wide DUB configuration. Aborting."
+	exit 1
+fi
+
+if ! ${DUB} describe --single issue103-single-file-package.d 2>&1 | grep -e "Unknown compiler: foo" -c > /dev/null; then
+	rm -r ../etc
+	echo "DUB didn't find the local configuration"
+	exit 1
+fi
+
+rm -r ../etc