Representative McDermott blasts Abercrombie administration’s obstruction of VA loans.

Arbitrary ruling by Department of Health blocks VA loans for up to 60,000 affordable Big Island homes for Hawaii’s Veterans.

News Release from Office of Rep Bob McDermott June 20, 2013

Today Representative Bob McDermott held a press conference at the State Capitol to outline his efforts to work with the Abercrombie administration to alter an arbitrary DOH (Department of Health) ruling posted on their Website that blocks VA loans to homes with rainwater catchment systems.

“We tried working with Gary Gil at the DOH and Blake Oshiro at the Governor’s Office for over sixty days,” explained Rep. McDermott. “Everyone seemed to understand the situation, but absolutely nothing was done to correct the problem.”

McDermott was first apprised of the problem by VA loan administrators who pointed out that the policy statement on the DOH Website was causing the VA to balk at home loans and re-fi’s for thousands of homes with catchment systems.  They were also concerned that other lenders such as Fanny Mae and Freddy Mac might follow suit paralyzing mortgage lending for a huge segment of the Big Island real estate inventory.

According to McDermott the problem has a simple solution.  Just change the Website copy.

“This isn’t a law, or an official rule,” said McDermott.  “it is just something…an opinion…that some nameless bureaucrat put up on the Website that has become de facto policy.”

Another State authority, The University of Hawaii, has stated the exact opposite opinion, saying catchment systems that are properly maintained produce potable water acceptable for home use.

McDermott and the VA have suggested a solution; removing the offending copy from the DOH website, and replacing it with a simple policy of requiring testing the catchment water system for safety, at the owner’s expense, prior to completion of loans.

The counties issue permitting and perform inspections for catchment systems the same way that do for septic systems.  These are not illegal installations that should be penalized.

“It is unfair to deny our Vets financing on what are some of Hawaii’s most affordable homes, because of this arbitrary entry on the State’s Website..” added McDermott

The State of Hawaii is disenfranchising Veterans and I ask the Governor to fix this problem his administration as created, today.

In 2011 the State Of Hawaii. DOH put up a web posting that said, in essence, water catchment is not potable water.

The action by DOH is Not a Law, Not a rule, merely a policy promulgated by a mid-level bureaucrat which has the effect of denying Veterans home loans or the re-fi opportunity at historically low rates.

We believe this State's Policy is wrong and harmful.  Catchment can and does provide safe, clean, drinking water.  Just ask the 60,000 residents on the big island who live off catchment.  Or the University of Hawaii report done by Mrs. Macomber.

Since then, the VA has not entertained home loans for Veterans who use water catchment; this is solely based on the States Policy and web-site posting.  I have come to this conclusion after discussion with all parties concerned. 

The VA rules for Loans are straight forward:

1. Potable Water

2. Electricity

3. Sewage or Septic Tank

The VA is basing their decisions on the misguided and un-vetted State Policy.

Solution:  Amend the wording on the State of Hawaii website that states something to the effect,  "A catchment System is deemed potable if that system is successfully tested for drinkability, and is found potable, by an independent lab  within 1 year of testing."

The governor can fix this today – Today.  With a phone call.

I have called this press conference because I have been unable to get the administration to act. Despite the positive attitude by Blake Oshiro and his helpfulness in trying to get this done, the DOH has failed to act.

The State DOH view is that the VA should change their policy – Good luck.

This is an easy fix, we can do it today.  I have researched this issue and I am confounded by the bureaucratic foot dragging and the seemingly keystone cop lack of effectiveness at the State DOH.

The State by their misguide Policy is injuring Veterans and should change it to today.  I implore the governor to knock the rust off the seemingly rigid and sloth like DOH and get them to take action today.

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SA: Vets caught in dispute over water catchment systems