Does FHA Require a Termite Inspection?

Homebuyers often consider Federal Housing Administration (FHA) loans for their accessible requirements, such as lower down payments and more flexible credit standards than conventional mortgages. The FHA, part of the U.S. Department of Housing and Urban Development (HUD), insures these loans, protecting lenders against potential losses if a borrower defaults. This government backing includes property standards ensuring the financed home is safe, structurally sound, and sanitary. These standards protect homeowners and the FHA insurance fund, leading to questions about property condition, including termite inspections.

FHA Termite Inspection Requirements

Contrary to a common misconception, a comprehensive wood-destroying insect (WDI) inspection is not universally mandated for every FHA loan. Instead, specific conditions trigger this requirement, ensuring properties meet FHA standards before a loan is insured. The primary trigger occurs if the FHA appraiser observes visible evidence of an active infestation or past damage from wood-destroying insects during their standard appraisal process.

If such signs are noted, the appraiser will flag the property, making the appraisal subject to a professional WDI inspection. Beyond appraiser findings, a termite inspection may be required due to state or local regulations, particularly in regions where wood-destroying insect activity is prevalent. Individual lenders may also implement their own additional requirements, known as “lender overlays,” which could include mandatory WDI inspections. For newly constructed homes, different requirements apply, often involving builder guarantees against subterranean termites rather than a full inspection.

Scope of the Termite Inspection

When an FHA termite inspection is required, a licensed pest control professional conducts the assessment. This specialist thoroughly examines the property for signs of wood-destroying insects and related damage. The inspection typically covers accessible areas of the home, including the interior (such as wood framing, floors, and walls), the exterior (like the foundation, siding, and eaves), and crawl spaces or basements.

The inspector actively searches for evidence of active infestations, which can include live termites, mud tubes, or frass, as well as signs of past infestations and the damage they caused. This includes structural damage from termites, carpenter ants, powderpost beetles, and wood-destroying fungi. They also identify conditions conducive to infestations, such as wood-to-earth contact or excessive moisture. The findings are documented in a formal report, often using standardized forms like the NPMA-33.

Handling Termite Findings

Should an active infestation or significant damage from wood-destroying insects be discovered during the inspection, the FHA requires specific actions before the loan can be approved. Any active infestation must be professionally treated by a licensed pest control company. Additionally, any structural damage caused by these insects must be repaired to ensure the home’s integrity and safety align with FHA standards.

After treatment and repairs are completed, a re-inspection is necessary to confirm that the issues have been fully resolved and the property now meets FHA requirements. The responsibility for paying for these treatments and repairs is often negotiated, but sellers frequently cover these costs to facilitate the sale.

Broader FHA Property Standards

Termite inspections are one component of the FHA’s comprehensive property standards, ensuring homes financed with FHA loans are safe, sound, and sanitary. These broader requirements protect borrowers from purchasing properties with significant defects and help maintain the value of the FHA’s insured loan portfolio. For instance, properties must have safe access and be free from health hazards like lead-based paint, asbestos, or radon.

The FHA also requires properties to possess structural integrity, with no major structural defects. The roof must have adequate remaining life, and drainage should properly divert water away from the foundation. Functional utilities, including electricity, heating, and plumbing systems, are also mandatory. These standards collectively ensure the home is habitable and maintains its value over time.