Written by Isaac F. Davis

The VA Home Loan Guaranty Program has certain guidelines when VA borrowers use a VA mortgage to finance a property with well water.  All properties financed with a VA loan require an appraisal and inspection of the property to assure that it meets the VA minimum requirements. Properties with well water are no exception. A home with a well must be livable and free from fire hazards, fungus growth, leaks and other problems that could create unsafe living conditions just like homes with municipal water.

All properties financed with VA loans must be connected to an adequate, safe and drinkable water supply.  A well alone does not prevent a VA borrower from financing property with a VA loan. The VA guidelines state that ideally a property should be connected to a public or community water system “whenever feasible”.  That said, a VA home financed with a veterans’ loan can have well water as long as the well and the water is tested to be safe.
The safety of city water can easily be determined when an appraiser looks at the city’s water testing reports. The VA requires that testing well water for safety must be performed by the local health authority’s sanitary engineer or a commercial laboratory.  The Environmental Protection Agency (EPA) suggests that well water be tested each year for nitrates and coliform bacteria. These are the two things that can most easily contaminate water and make people sick.  Labs that perform water tests may look for additional contaminants that might be specific to the property or its geographic location, for instance:

• Pesticides from an orchard or farm
• Volatile organic chemicals from oil tank buried or commercial storage tanks buried nearby that may have seeped into the ground
• Lead from lead pipes

 

Sometimes water testing results can reveal offensive contaminants that are not hazardous to one’s health. In this case, the lab performing the tests can advise about the differences between hazardous and non-hazardous contaminants, and their possible sources.
When applying for a VA mortgage, a borrower may learn that a dug well is different that a drilled well.  The VA technically doesn’t distinguish between a dug versus a drilled well for qualifying for a VA loan; however, VA loan guidelines do point out that dug wells can become contaminated more easily in some cases.  If the well is placed in a good location, drinkable water can still be obtained. 

If well water is found to be contaminated, a VA borrower will need to do take measures with the seller to clean it up before closing of the VA home loan can occur. 

Once the local health official or lab has certified the well’s water is safe to drink, then the results must be filed with the other VA loan documents. A seasoned VA mortgage professional can help with this filing and proceed with the financing and closing.

For more information about VA loans for properties with well water, contact a VA mortgage professional.