Deciphering the VA Lender’s Handbook Chapter 12 Part 8
In the last article, we got started on the VA’s requirements for a property’s water supply. We discussed how the VA requires the water quality for the property to meet local requirements or the EPA’s acceptable contaminant levels. We also mentioned that if the local health authority is not able to perform an analysis then a commercial testing lab can do the analysis instead. The entirety of Chapter 12 of the Handbook is dedicated to the VA’s Minimum Property Requirements, so if you’re looking for more information on all the requirements for a property to be financed with a VA loan, reading all our articles on Chapter 12 is the best place to start. In this article, we’re going to start by talking about the VA’s requirements for water treatment systems.
There are two scenarios where a property may have (or need) an individual water treatment system. The first is if the water for the property comes from a well, and the second is if the aquifer that serves an area is confirmed to be contaminated. In both scenarios, an individual water treatment system is required. In the case of wells, there are other VA requirements that the VA has the well itself, and if the well does not meet those requirements then having a water treatment system will not be sufficient. We’ll go more over those requirements for wells in a separate article. If the aquifer serving the area is confirmed to be contaminated, the property can still be approved for VA a loan as long as all of the following is provided:
- 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.
While a well may serve a single property, it is also possible that a well may serve multiple properties. Such a well is known as a ‘shared well’. The VA permits shared wells to provide the water for a VA-guaranteed property but has several requirements for the shared well in order to be approved. First, the well must be capable of providing a continuing supply of safe and potable water to all of the properties simultaneously so none of the properties will be in want of water. Second, there must be a permanent easement in place which allows access for maintenance and repair, and there must be a well-sharing agreement in place that does at least the following three things:
- makes reasonable and fair provisions for maintenance and repair of the system and the sharing of those costs
- is binding on the signatory parties and their successors in title, and
- is recorded in local deed records.
If the property is served by a spring or cistern, the VA will approve it as long as springs/cisterns are customary in the area and are the only feasible means of water supply. They need to be installed in accordance with local health requirements, and the veteran borrower must sign a statement that he or she is aware of the situation. In cases where the local health authority does not have requirements, then the U.S. Public Health Service requirements apply.
The VA’s requirements for individual sewage disposal systems are very simple: it needs to do it’s job and not bother or endanger anyone in the process. The Handbook states, “An individual sewage disposal system must adequately dispose of all domestic wastes in a manner which will not create a nuisance, or in any way endanger the public health.” I think we can all agree that those are reasonable expectations of a property being purchased for someone’s primary residence. Lastly, “pit privies”, commonly referred to as ‘kybos’, are permitted as waste disposal only in areas where they are both customary and the only feasible means of waste disposal. The U.S. Public Health Service requirements or the local health authority’s requirements apply.