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Water Quality, Well Tests and Your VA Home Loan


Water quality probably isn't high on your home shopping checklist. But making sure the property you want to purchase is safe, sound and sanitary is one of the key missions of the VA home loan program.

That's why the type of water connection and treatment system at your potential dream home can become a big deal. These are part of the VA's Minimum Property Requirements, a set of standards the agency wants properties to meet to help safeguard veterans and their families. The aim is to get VA borrowers into "move-in ready" homes.

Water-related issues can prove especially thorny for prospective homebuyers. Mortgage lenders and loan specialists who don't have a clear understanding of the requirements and how to handle them can wind up costing veterans the property they desire. Here's a look at some of the high-level concerns and solutions.

Well Tests

Not every property has a connection to a public or community water and sewage disposal system, whether because of geography, topography and plenty of other reasons. Without a public connection, you're likely talking about having a well, either unique to the property or a shared well that serves multiple homes.

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An independent VA appraiser will assess the Minimum Property Requirements as part of the appraisal process (the other part being the home's valuation). If you're looking at buying a property with a private or shared well, both the VA and lenders want to ensure the water is safe, which means getting it tested. For properties with community water supplies, testing documentation from the local health authority can suffice.

Ideally, for private well tests, there's a local health authority and one of their employees handles the water quality test, which would need to come from an internal water source like a kitchen sink or bathtub. If that isn't feasible, then a commercial testing lab or another independent, third party can collect and deliver the water sample.

There are often local health authorities that have requirements for water quality. But that's not always the case. When there isn't a local authority with set requirements, the water will need to meet federal standards set by the Environmental Protection Agency.

Tests on private wells are valid for up to 60 days if completed before a formal Notice of Value is issued for the property. Homes with water filtration systems installed can work, provided it's a permanent system that treats the entire house.

Shared Wells and Cisterns

On a private well that's shared among multiple property owners, VA lenders are typically going to have some additional requirements. Here's a look at a few of the common ones:

  • The well has to support each property with safe water at the same time
  • A permanent easement that allows access for repairs to the well system must be in place
  • There needs to be a formal well-sharing agreement among property owners

While it isn't common, it's possible that your dream home gets water from a cistern or a spring. A cistern is basically a waterproof receptacle for rainwater. Either of these can be acceptable as long as they're common to the area and a water test indicates they're safe. Lenders and the VA also want the veteran homebuyer to sign what's essentially a hold harmless agreement acknowledging they'll be using one of these water sources.

Property issues like wells and water quality are areas where a real estate agent who knows the VA loan program can make a huge difference. To find a VA-savvy agent or to start the VA loan process, talk with a Veterans United loan specialist at 855-870-8845.

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