The VA home loan program is focused on getting service members, veterans and military families into “move-in ready” homes that are safe, sound and sanitary. It’s not as flashy, but we could also add “termite-free” to that list.
VA loan rules state that a wood-destroying pest inspection is required in certain parts of the country or in low-rise and high-rise condo units when the VA appraiser observes a potential pest problem. Termites damage more than half a million homes every year, and U.S. homeowners spend about $5 billion annually fighting them, according to industry statistics.
Termites are more prevalent in some places than others. More than 30 states require a pest inspection before a home loan can close. They’re discretionary in others, although there’s a handful of states where individual counties mandate a inspection.
While termite and pest inspections can be required, the VA in most cases does not allow the borrower to pay for it in all but nine states. That may change in the coming years, but for now it’s a consideration that lenders, real estate agents and home sellers contend with, usually with little fuss.
One of the first questions for VA borrowers is, “Will I have to get one?” Unless you’re pursuing a VA Streamline refinance, the answer is an unequivocal yes if the property is in one of these states:
- North Carolina
- New Jersey
- New Mexico
- Rhode Island
- South Carolina
- West Virginia
In other states, you’ll need to get a pest inspection only if the independent VA appraiser notes an issue during the appraisal process. Pest inspections are merely discretionary in these states:
- Michigan (except for all properties in the following counties: Allegan, Barry, Berrien, Branch, Calhoun, Cass, Hillsdale, Ionia, Jackson, Kalamazoo, Kent, Lenawee, Livingston, Macomb, Mason, Monroe, Muskegon, Oakland, Oceana, Ottawa, St. Clair, St. Joseph, VanBuren, Washtenaw and Wayne.)
- New Hampshire (required only for the counties of Cheshire, Sullivan, Merrimack, Rockingham, Belknap, Hillsborough and Strafford)
- New York (required for these counties: Bronx, Broome, Columbia, Delaware, Dutchess, Greene, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Sullivan, Ulster and Westchester)
- North Dakota
- South Dakota
Professional pest inspectors will scour potential entry points around the house, both inside and out, looking for telltale signs of termite infestation. Damaged wood is obviously a dead giveaway, but there are other indicators that might signal a problem. Any issues will need to be cleared up before you can move forward with your VA home loan.
Many buyers found learning about the VA’s Minimum Property Requirements helpful while preparing for a pest inspection.
VA lenders will often require an invoice that shows who paid for the termite inspection. VA borrowers aren’t allowed to pay for the inspection on a home purchase in all but nine states. Both home sellers and real estate agents have historically expressed concern over this limitation, which almost always results in the seller covering this cost.
The nine states where VA buyers can currently pay for a pest inspection are:
While paying for the inspection is off the table in most states, VA buyers everywhere may be able to pay for termite treatment. Some lenders, including Veterans United, allow buyers to cover repairs in some cases, even with issues noted on the Notice of Value.
The VA pest inspection and VA appraisal have separate purposes. Many readers also read:
Photo courtesy of l.e.o.