VA has long allowed properties with individual water supply systems to be eligible for VA backed loans. However, potable water is a health and safety issue and as a part of VA Minimum Property Requirements (MPR) require that water used for drinking, washing, and other uses inside the home be safe for consumption.

What will fail a VA home inspection?

What Will Fail a VA Appraisal? In general, any visible health or safety concerns will pose an issue on a VA appraisal report. You won't be able to close on a home until these issues are resolved. In some cases, sellers are willing to cover the cost of essential repairs rather than lose the sale.

Does VA allow a cistern?

Springs or Cisterns

These type of private water systems are only permitted for VA loans when they are customary and the only feasible means of water supply. They must be installed pursuant to the recommendations of the local health authority or federal authorities if no local stance is taken.