VA appraisals

VA Loan Minimum Property Requirements For Cisterns

October 8, 2014

VA Loan Minimum Property Requirements For Cisterns

082-logoA reader got in touch with us recently saying, “I was just notified by the Ohio Regional Loan Center that the va does not approve cisterns under any circumstances. My cistern is 1 year old and the township is in the process of running water lines on our road. My va loan was otherwise approved…”

VA home loan rules were amended to allow cisterns in certain cases. According to the VA Lender’s Handbook Chapter 12, Section Eight, the following applies:

“Springs or cisterns are permitted where such facilities are customary and the only feasible means of water supply, provided they are installed in accordance with the recommendations of the local health authority, and the veteran purchaser acknowledges in writing his/her awareness of the situation.”

It’s entirely possible that lender standards may play a part in loan approval in these cases, but in this particular circumstance the borrower should contact the VA directly to appeal the information he or she was given based on a reading of Chapter 12.

That said, depending on circumstances, there may be local conditions that apply in a specific area that preclude the use of wells or cisterns depending on state or local laws. If a state or local law does not approve the use of cisterns this could play a major role in the question of loan approval.

VA loan rules do not override state or local ordinances so its important to determine why a cistern or well may not be allowed in a certain area–there could be many factors at work leading to the decision of a certain VA Regional Loan Center to disapprove all loans for property with a specific feature such as a well or cistern.

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

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