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VA Loan Appraisal Issues: Water Quality


Water supply and water quality issues are among some of the most frequently asked-about topics when it comes to VA appraisals. While many homes purchased with a VA loan are typical suburban properties or condos, not all of them are–some properties are served by aquifers, wells, or even cisterns due to their location.

Regardless of the source of the water supply for a home to be purchased with a VA mortgage, there are VA regulations that establish minimum standards for the water supply to the home. These standards are found in VA Pamphlet 26-7, Chapter 12, which includes the following:

“Water quality for an individual water supply must meet the requirements of the health authority having jurisdiction.  If the local authority does not have specific requirements, the maximum contaminant levels established by the Environmental Protection Agency (EPA) will apply. If the health authority is unable to perform the water quality analysis in a timely manner, a commercial testing laboratory or a licensed sanitary engineer acceptable to the health authority may take and test the water sample.”

Additionally, “Water treatment systems are not acceptable for wells which do not meet VA quality standards due to insufficient depth or a contamination source near the supply.”

What happens when “public water” is not available for a specific property? Is it rendered ineligible for a VA mortgage loan? Not according to Chapter 12. “However, if public water is not available and individual water supplies in the area are served by an aquifer confirmed by the health department to be contaminated, the property is eligible for a VA loan if the lender provides

  • a copy of the health department letter confirming the aquifer contamination
  • evidence that all of the requirements in HUD Mortgagee Letters 92-18 and 95-34, concerning individual water purification systems, have been met for the property, and
  • the veteran purchaser’s written acknowledgment that he/she understands that the well water serving the property must be continuously treated by the homeowner, as required by the local health department, to be considered safe for human consumption.”

In cases where these rules apply, it’s important for borrowers to know that the VA basically defers to the standards of the local authority as described above. The VA does not establish health and safety requirements for water supplies, it relies on the existing authorities and their benchmarks for these issues.

If you have a problem with the determination of the local authority when it comes to testing, compliance, or meeting the agency’s standards, you would need to have that problem addressed with the agency rather than the VA.

Do you have questions about VA home loans? Ask us in the comments section.


Bruce Reichstein

About Bruce Reichstein

Bruce Reichstein is an Expert on (VA) Military/Veteran Home Loan Guidelines for over 26 years — He is an experienced VA Loan Mortgage Banker who is passionate about assisting US Military Veterans utilize their Veteran Eligibility to purchase a home.

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