Well Water Issues Buying a Home With A VA Loan

In North Carolina, especially in Johnston County, we have a ton of third party private water systems.  I’m pretty sure Flower’s Plantation near Clayton, and Briar Chapel in Chapel Hill are two of the largest such systems in the Southeast.  Because they are so prevalent, we also get questions from Veterans about Well Water Issues Buying a Home With A VA Loan or other “non-public” sanitation features.

How does the Veteran’s Administration look at these types of water and sewer systems, and what inspections are required to get a VA Loan?  Especially when the VA guarantee home loans for properties served by wells, septic tanks, and private third party systems.

The quick answer is that we often make VA loans on homes that are generally in more rural North Carolina settings, and have wells, septic tanks and other non-public features. The list of VA Minimum Property Requirements includes a section that specifically addresses how the appraiser is to view these items, and what inspections we are required to get. Chapter 12 of VA Pamphlet 26-7 states, “Connection to a public or community water/sewage disposal system is required whenever feasible.” The phrase “wherever feasible is the key here, and is up for some interpretation…

Under the section titled, “Water Quality” in Chapter 12, you’ll find 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.” Additionally, “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.”

There are 2 different Well tests we see pretty often, one of them is a Metals test, the other is a Bacteria / Contamination Test. When there’s a well, and you want to get a VA loan, we are required to get a Bacteria test.  We ENCOURAGE you to get the Metals test, also.  That will insure you that there’s no lead, or magnesium coming into your water.  The tests take a couple of days to order and incubate – so if you know that the property is on a well / septic system let us know that at loan application.  The Water test generally costs between $125 and $150.  The Septic test is generally done by the Home Inspector.  We don’t require a home inspection though, so if it’s a separate test we’re sending someone out to do, that’s another $125.

If the property is located in an area with a private third party system in place, we have to provide the underwriter with a copy of the most recent Convenience and Necessity Test.  This is an independent certification done by the State of NC stating that the systems passed all tests.  We have ALL of these letters for Wake and Johnston County.

It is also important to remember that these rules do not override local, state or federal guidelines–if it is required by law on the property, your VA loan approval will also stipulate that compliance as part of the approval. The VA does not provide an “exception” clause for properties that do not meet local/state/federal codes or regulations.

Because all mortgage loans that are backed by the Government have the “best” interest rates right now, this is a GREAT program to use!  In addition, there’s no monthly PMI!  Even if you are purchasing a “Bigger” home, and you are going to make a downpayment, you might still want to use this program!

If you have questions about Well Water Issues Buying a Home With A VA Loan, or if you are considering a VA Loans in Rural Communities, and want to know more about qualifying for a VA mortgage loan, please call Steve and Eleanor Thorne, Govenment Mortgage Loan Experts, 919-649-5058