Termites strike terror into homeowners’ hearts. That might sound extreme, but it’s actually a reasonable response. Consider these statistics from Orkin. Experts estimate that property owners in the U.S. spend some $5 billion annually to control termites and repair the damage that these wood-eating insects cause. Does that seem like a lot of money? It’s also a lot of structures. Each year, termites damage roughly 600,000 homes in the U.S. In some cases, the damage is minor. In others, the cost of repairs will total thousands of dollars. Occasionally, termite damage is so extensive and so harmful to the structural integrity of the building that the only reasonable path forward is to demolish the house and start fresh.
With that kind of track record, termites are rightfully recognized as a serious threat to the health and safety of a home, so lenders often require that homebuyers get a termite inspection. What if you’re using a VA loan from the home loan program offered by the U.S. Department of Veterans Affairs (VA)? Let’s explore what’s involved in getting a VA termite inspection.
The VA Termite Inspection: What You Need to Know
It’s no surprise that would-be borrowers must demonstrate their ability to qualify for a VA loan and meet certain requirements. However, some aspiring homebuyers are startled to discover that the property being purchased must also meet certain standards. Called the VA Minimum Property Requirements (MPRs), these rules protect the borrower by verifying that the home they’re purchasing is safe, sound, and sanitary. As you might have guessed, the MPRs have something to say about termites and termite inspections.
Is a Termite Inspection Required?
Many lenders and loan programs demand a termite inspection before approving a loan. What about the VA? While a few properties in certain low-risk areas may dodge the requirement, the VA’s rules generally make termite inspections a must for home purchases funded by VA loans. Chapter 12 of the Lenders Handbook – VA Pamphlet 26-7 discusses the Minimum Property Requirements and was completely revised in March of 2019. It makes it clear that a termite inspection is required under certain common circumstances:
- The VA appraisal reveals evidence of termite damage. Appraisers are instructed to report any indications of damage caused by wood-destroying insects, fungus growth, or dry rot. If any is found, an inspection for wood-destroying organisms must occur. When an infestation or damage is spotted, it must be repaired before the sale can move forward.
- The property is in an area where termite infestations are probable. If the home is located in an area that is marked “moderate to heavy” or “very heavy” on the U.S. Department of Agriculture’s Termite Infestation Probability Map, a Wood-Destroying Organism report will be needed. Much of the country falls into these areas.
Who Pays for the Inspection?
If an inspection for termites or other wood-destroying organisms is needed, who pays for it? While this can vary depending on the location, the market, and the form of financing being used to fund the purchase, the seller generally pays for this inspection. Buyers can choose to pay for an inspection if the seller declines to provide one or offers one that they find questionable.
However, there’s no guessing about who will foot the bill for a VA termite inspection. When a VA loan is being used, the seller always pays for this vital inspection. As Terminix explains, that’s because the VA limits what a borrower using one of its loans can be charged for, and it does not allow for its borrowers to pay for a wood-destroying organisms inspection. In fact, an invoice detailing who paid for the inspection may be required by the lender.
At PrimeLending: Manhattan, Kansas, your needs are always our top priority. Our loan experts work diligently to help you explore the available options, understand their pros and cons, and move forward with the best loan product for your unique situation. If you’ve heard about the competitive interest rates, 100-percent financing, and favorable terms that come with a VA loan and are wondering if this form of financing is a good choice for you, we can help you find out. Contact us today to learn more about our services and how they can benefit you.