FHA & VA Loan Requirements for Homes with Wells | SCWS

FHA and VA loans have specific requirements for homes with private wells. Learn about water testing, distance requirements, and what must pass inspection for loan approval on well water properties.

FHA Well Requirements

FHA loans require that the well provide safe, potable water adequate for the property. Specific requirements include: water tests for coliform bacteria and nitrates, results within acceptable limits, proper distance from septic systems (typically 100 feet per local code), and documentation that the well meets local health standards. The well system must be operational and provide water to all required fixtures.

VA Loan Well Requirements

VA requirements are similar to FHA: water must be tested for bacteria and nitrates, the well must meet state and local standards, and adequate water quantity must be documented. VA appraisers verify the well is functioning and note any concerns. If the property is in an area with known water quality issues, additional testing may be required by regional VA centers.

Distance and Location Requirements

Both FHA and VA follow local health codes for well placement. In California, wells must typically be at least 100 feet from septic tanks, 100 feet from leach fields, 50 feet from sewer lines, and 10 feet from property lines. Non-compliant distances don't automatically disqualify a property, but additional inspections or waivers may be required.

What Happens If Testing Fails

If water tests show bacteria or nitrate levels above limits, the sale doesn't automatically fail. Options include: treating the contamination source (shock chlorination for bacteria), installing a treatment system, retesting after remediation, or in some cases obtaining a waiver. However, resolution must occur before loan closing. Sellers should consider pre-testing to avoid surprises.

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