FHA Loan Articles
News, updates, and explanations to keep you informed.
VA Property Standards and Well Water
For those who want a VA mortgage on property in rural or remote areas, well water can be a big issue. Before you can be approved for a VA mortgage loan, the government requires an inspection or appraisal of the property to make sure it meets the VA minimum property requirements. Those requirements include a home that is free from fire hazards, fungus growth, leaks and other problems.
VA minimum property requirements also include being connected to an adequate water supply that is safe and drinkable. Do you know the VA guidelines that affect you when applying for VA home loan on property served by a well?
VA rules do allow you to buy land with a well as the primary water supply, but there are stipulations. According to the VA, the property must be connected to a public or community water system "whenever feasible," but you can have a well instead--provided the well and water meet local health authority requirements.
Some areas may not be governed by a local health authority, and in these cases the VA recognizes the authority of the EPA. Your well and well water must meet EPA standards and provide safe drinking water. But how do you determine what "safe" is when there's not a local government authority to certify a well?
In these cases, the well can be tested by a sanitary engineer or a commercial laboratory. Once the engineer or lab has certified the well, check with your loan officer about where to file the results.
When applying for your VA loan, the question of dug wells versus drilled wells may also come up. According to the VA, there is no technical distinction (with regards to qualifying for a VA mortgage) between dug or drilled wells. Official VA loan guidelines do point out that dug wells can be more vulnerable to contamination in some cases, but if the well is placed in a good location, drinkable water can still be obtained.
The VA leaves the responsibility for a dug well to the borrower, but the water from such wells must meet testing requirements. If the water is found to be contaminated, you may need to do some additional negotiations or planning to correct the issue before you can be approved for the VA home loan.
FHA NEWS and RELATED ARTICLES
FHA loan eligibility requirements can be misunderstood. It's easy to assume FHA mortgages are only for low-income families, or that only first-time home buyers are eligible to apply for an FHA mortgage.
Early in 2012, the FHA and HUD issued some guidance in the form of Mortgagee Letter 2012-4, including news of a decrease to the annual Mortgage Insurance Premium for certain Streamline Refinance transactions.
The basic FHA home loan program is also called the FHA 203(b). But the FHA also offers a home loan guaranty program called the 203(k)that offers an important alternative to conventional mortgages that offer the same thing.
As homeowners began cleaning up the mess left behind by Hurricane Sandy, the FHA addressed some serious issues related to insurance claims by FHA borrowers who had storm damage.
There are many common questions about FHA home loans, and more than a few uncommon ones. Income verification is one area where FHA loan applicants may experience the need for more information.