During the civil war the area was the scene of fighting between the army and the guerillas...Now despite the Chalatenango area where the murder rate is high ( many locals have been hijacked)...Suchitoto is a safe and secure area.
The tap water in Suchitoto is not suitable for safe drinking. Use only commercially bottled "agua pura." Not only is the tap water not safe, it may not even be available. On two occasions that I have been there, Suchitoto has been without running water for as long as two days. Water is supplied on a limited basis by tank trucks that move through the streets giving people water a gallon at a time!
La Posada Hotel seems to have their own source which is another reason for staying there.