Do VA Loans Require Termite Clearance?

Termites might be small, but when they get together, they can cause a lot of damage to a house.

If you’re buying a home, the termite inspection (A WDIR or wood-destroying insect report) ensures it’s free of wood-destroying insects such as termites or wood-boring beetles and ready to move in. If you’re an active military service member or a veteran looking to purchase, you might be wondering whether a VA loan requires termite clearance. The quick answer is that it depends on where you’re buying your home.

VA loan rules require a termite inspection in more than 30 states, including California. A few states have a rule that pest inspections must be done only if the Veterans Affairs appraiser notices a problem.

Typically, any infestation issues must be resolved before closing the home loan. Should the closing be delayed, whether from a termite inspection or another issue, you may need another termite inspection dated 30 days or less from the closing date.

Termite Damage Can Be Serious

Termites are a bigger problem in some parts of the United States, such as California. This is because termites prefer a warmer climate, but these pests can be found in every state (except Alaska).

Most homeowners are not aware of termites unless they see a swarm or when renovations uncover the damage. It’s not enough to just inspect the property yourself. A professional inspection can find evidence of termites that a layperson might not notice. Here are some of the signs that inspectors will look for:

• Stuck windows or doors—termites like window and door frames, and as they eat through the wood, it can cause them to warp
• Pinholes or bubbling paint—termites create tunnels behind paint, leaving signs that they’re eating away at the wood underneath
• Sagging or buckling floor—this might indicate the presence of termites that have eaten through the flooring
• Mud tubes—termites use mud tubes, which look like narrow veins, to protect themselves from dry air

According to Orkin, a nationwide pest control company, U.S. residents spend approximately $5 billion annually to control termites and make repairs for termite damage (they damage over 600,000 homes in the U.S. each year). The average cost to remediate termite damage is $3,000 per home.

A lender will want to see your home is free of these wood destroying organisms to ensure the structural integrity of the home is intact and there will be no problems down the line.

Documentation After a Termite Inspection

In San Diego, when you get a VA home loan, you’ll receive two documents—a termite report and termite clearance. You will need to sign a receipt identifying that you received both documents before the loan closes. Documentation received is a WDIR or Wood Destroying Insect Report that most local licensed termite companies can provide. If there is any indication of termites in the home, that will be listed as a Section I item on the report. If there are any problems that could lead to termites in the future it will be listed as a Section II item on the report. Most lenders will want to see all Section I & II items completed. When the repairs are done a termite clearance report will be issued from the termite company after they have been inspected the repairs to show the lender the home has been remedied and you can proceed to closing.

The report includes information about current damage to the home, such as leaks, dry rot, fungus, and potential future problems. Generally speaking, the sellers are required to cover the costs of pest treatment and repairs. The amount of damage and extent of a pest infestation will determine the scope of remediation.

The clearance is a document that clears the property of any issues regarding termites.

Who Covers the Cost of the Termite Inspection?

The VA lender requires an invoice showing which party paid for the termite inspection. In most states, the seller is required to pay the inspection cost, but nine states, including California, allow the buyer to pay for the inspection.

Regardless of who pays for the inspection, it’s important to review the inspection report before closing on the home. You may need to negotiate for any needed repairs and then have the work inspected once repairs are finalized.

Have Questions?

National Home Loans is proud to support veterans and military families buying a home. Termite clearance is just one part of the process, and we’re here to help with all the steps you take you through your home buying journey. Contact us today!

Homes for Heroes®