As long as the well meets VA standards for water quality and depth then it should not create an issue when you apply for the mortgage. Your appraiser may require additional documentation such as a water quality report or the permit that was issued when the well was drilled to verify that the well meets VA guidelines. The VA wants to confirm that water from the well is potable and safe to use around the property.
If the well does not meet VA standards due to insufficient depth, poor water quality or a contamination source near the water supply you still may be able to qualify for the mortgage but you are required to take additional steps. In this scenario you are required to include the following additional documents in your loan application:
a letter from your local health department confirming the contamination;
evidence that water purification standards for the property have been met; and,
written acknowledgement that you understand that the water must be continuously treated to be considered safe for human consumption.
In short, the VA wants to make sure that you take the necessary precautions if you intend to use water from a well that does not meet its guidelines according to the findings of an appraisal, water quality or property inspection report.
Depending on the results of the property appraisal or inspection, you may be required to fix any issues identified with the well before you receive final mortgage approval. In the worst case scenario, you may need to find an alternate water source if you cannot satisfy the applicable VA guidelines.
Review our VA Mortgage Program Guide including comprehensive information on qualification requirements
Please note that some mortgage lenders apply their own requirements for properties with wells that go above and beyond the VA's policy. They may require additional testing, documentation or a higher water quality standard. So if you are running into a challenge getting your loan approved due to the well, you need to determine if this issue is related to lender or VA guidelines.
If the issue is due to an extra lender requirement then you may be able find a new lender with different guidelines that approves your loan. If the issue relates to a VA policy then your loan will likely not be approved due to the well, no matter what lender you use.
Your best approach to address any potential issue is to contact both your lender and the VA. If you explain your situation directly to the VA, they should be able to tell you if the issue is on their end or with the lender. You can contact the VA at 844-872-4681.
You may also want to consult other lenders to determine if they would handle this issue differently. If you go this route, we recommend that you contact multiple lenders in the table below as qualification guidelines for properties with wells may vary. Plus, shopping lenders is the best way to save money on your loan.
"Chapter 12.16. Individual Water Supply." Lenders Handbook - VA Pamphlet 26-7. U.S. Department of Veterans Affairs, 2020. Web.« Return to Q&A Home About the author