TERMITE INSPECTIONS
The age-old question of do I need one or not? It can definitely get a bit confusing as to when it is required as it seems it randomly pops up from time to time.
Today, I wanted to give you an idea of what and when one is needed for each type of loan.
FANNIE AND FREDDIE
Only required when appraiser or other third-party inspection notates termite issues.
If the appraiser notices termite issues and comments on them. The appraiser is the one that puts a value and the marketability impact depending on what they find.
It is up to the lender to prove that the termite problems have been repaired and corrected. It is the corrected part that can get you sometimes. Just treating termites does not necessarily mean the damage they created has been corrected.
SIDE NOTE: Fannie and Freddie do not require although some states do so state requirements could trump agency requirements.
FHA
- EXISTING PROPERTIES – If the appraiser calls for a termite inspection, then the seller must provide termite inspection. If any past or present damage is found it must be proven that it has been treated and repaired.
- NEW CONSTRUCTION – Forms 99-A and 99-B must be completed by the builder to prove termite protection and if required. Not required if property is made of steel, masonry or concrete.
SIDE NOTE: There are areas that FHA does not require termite inspections. None of them are in the South though. In case you are curious. Here is where you do not need one.
VA
VA also has a probability map. If the map shows very heavy or moderate to heavy, then one is needed. Down here in Florida, that pretty much means it is always needed regardless of if the appraiser calls for it or not.
For New Construction soil treatment is preferred and allowed.
Each Regional VA Loan Center may have different requirements.
USDA
Termite inspections are not required unless the appraiser, inspector or state requires an inspection.
Appraiser would request if they found potential termite activity. Must prove it was treated and repaired if necessary.
