Is a Termite Inspection Required for a VA Loan?

Applying for a home loan involves several steps designed to ensure the property meets specific standards. The Department of Veterans Affairs (VA) home loan program serves as a significant benefit for eligible service members, veterans, and surviving spouses, facilitating homeownership with favorable terms. The VA guarantees a portion of these loans, which helps lenders offer attractive rates and terms, often without requiring a down payment. This guarantee underscores the VA’s interest in the purchased property’s condition, ensuring it is a sound and safe investment for the borrower.

When an Inspection is Necessary

A wood-destroying organism (WDO) inspection, often referred to as a termite inspection, is not universally required for all VA loans across the United States. The necessity of such an inspection depends on several factors, primarily the geographical location of the property. In areas identified by the VA as having a moderate to heavy or very heavy probability of termite infestation, a WDO inspection is mandatory. These regions are often in warmer, more humid climates where wood-destroying organisms thrive.

An inspection also becomes necessary if a VA appraiser observes evidence of active infestation or damage from wood-destroying organisms during the appraisal process. The appraiser’s role includes assessing the property’s overall condition and ensuring it meets the VA’s Minimum Property Requirements (MPRs), which include being free of such pests. Individual lenders may also require a WDO inspection as part of their underwriting criteria, even if it is not mandated by the VA for that specific area. For new construction, inspections are included to certify that the property is built free of existing WDO issues.

What the Inspection Covers

A qualified inspector conducts a WDO inspection to identify signs of various wood-destroying organisms that can compromise a home’s structural integrity. These inspections look for termites, including subterranean and drywood types, as well as carpenter ants, powderpost beetles, and wood-decaying fungi. The inspector examines accessible interior and exterior areas of the property.

This examination includes crawl spaces, basements, attics, and all accessible wooden structures like foundation elements, baseboards, and window frames. The goal is to detect mud tubes, exit holes, frass (insect droppings), or any visible damage to wood. The inspector also notes conditions that could be conducive to future infestations, such as excessive moisture or wood-to-ground contact. The findings are then documented on a standardized report, often the NPMA-33 form, which is valid for 90 days.

Handling Adverse Findings

If a WDO inspection uncovers an active infestation or significant damage, specific actions are required to ensure the property meets VA Minimum Property Requirements (MPRs). Any active wood-destroying organism infestation must be treated by a licensed pest control professional. This ensures the immediate threat to the property’s structural soundness is eliminated.

Beyond treatment, any structural damage caused by the organisms must be repaired to restore the home to a safe and sound condition. The VA’s MPRs ensure that homes financed through their program are habitable and free of hazards. After treatment and repairs are completed, a re-inspection is necessary to confirm that the issues have been resolved and the property now complies with VA standards.

Costs and Responsibilities

The VA has specific guidelines regarding who can pay for the WDO inspection and any associated treatment or repairs. Historically, veteran buyers were prohibited from paying for the WDO inspection. In such cases, the cost was borne by the seller, the lender, or sometimes the real estate agent.

However, as of June 2022, the VA updated its policy, allowing veteran buyers to pay for the WDI inspection fees if the inspection is required by the VA Notice of Value. Veterans are also permitted to pay for any necessary repairs to meet MPRs. While this change provides more flexibility, veterans are encouraged to negotiate these costs with the seller. The responsibility for treatment and repairs falls to the seller, but this can be subject to negotiation, with the buyer covering these expenses to facilitate the transaction.