Who Pays for a VA Home Loan Pest Inspection?
Navigating VA home loan pest inspection costs? Understand the rules, exceptions, and who typically covers the expense for your home.
VA home loans offer benefits for eligible veterans, service members, and their spouses, facilitating homeownership with favorable terms. A key step in securing one of these loans is often the pest inspection, which evaluates the property for wood-destroying insects and organisms. Understanding who is responsible for covering the cost of this inspection is an important consideration for both buyers and sellers in a real estate transaction. This article clarifies the financial responsibilities associated with VA home loan pest inspections.
VA Requirements for Pest Inspections
The Department of Veterans Affairs requires pest inspections for homes financed with VA loans to safeguard the veteran from purchasing a property with structural issues. These inspections confirm the home meets the VA’s Minimum Property Requirements, ensuring it is safe, sanitary, and structurally sound. The requirement for a pest inspection depends on the geographic risk of termite activity. States with “moderate to heavy” or “very heavy” infestation probability often mandate an inspection for all VA loans. In areas with lower risk, an inspection may still be required if a VA appraiser identifies visible signs of wood-destroying insect activity or damage during the appraisal process.
Historically, VA loan guidelines restricted the veteran buyer from paying for certain fees, including the pest inspection, placing the burden on the seller or other parties. The intent was to reduce the financial obligations on the veteran during the home purchase. This policy created challenges in competitive housing markets, as it could make VA offers less attractive compared to conventional loan offers.
Payer Responsibilities and Exceptions
Payment for VA pest inspections has seen changes. Previously, veteran buyers were prohibited from paying for the pest inspection in most states, with the seller bearing this expense. This rule aimed to alleviate the financial burden on the veteran, but it could complicate negotiations and make VA offers less competitive. As of June 15, 2022, the VA updated its policy, now allowing veteran borrowers to pay for the pest inspection if it is required.
This policy revision, detailed in VA Circular 26-22-11, means the buyer, seller, or lender can now pay for the pest inspection. While the veteran is now permitted to pay, they are not obligated to do so, and the cost remains negotiable between the parties involved in the transaction. Many sellers still agree to cover the cost to facilitate the sale, especially in states where such inspections are customary. State and local regulations can also influence who pays, as some jurisdictions may have specific requirements that interact with VA guidelines.
Understanding the Inspection Process
A VA pest inspection focuses on wood-destroying insects and organisms to ensure the structural integrity. Inspectors look for signs of termites, carpenter ants, powderpost beetles, wood-boring beetles, and wood-decaying fungi. The inspection involves a thorough visual examination of accessible interior and exterior areas, including foundations, attics, and crawl spaces. The average cost for a basic pest inspection ranges from $50 to $280, varying based on geographic region, home size, and the specific provider.
Upon completion, the inspector provides a detailed report outlining any findings, such as active infestations or evidence of past damage. This report is important for the loan approval process. If active infestations or significant damage are identified, treatment and repairs must occur before the loan can proceed. The pest inspection report is valid for 90 days, providing sufficient time for the closing process to be completed.