The VA home loan program is focused on getting military families into homes that are safe, sound, and sanitary. One thing every future homeowner will want to do is to make sure their home is termite free.
VA loan rules state that a pest inspection is required in certain parts of the country. Termite damages more than 500,000 homes per year, and U.S. homeowners spend about $5 billion annually fighting them.
The requirement comes from the VA's Termite Infestation Probability Map, which the VA reads out of the Lenders Handbook (M26-7, Chapter 12, Topic 33). Where the probability of infestation is “moderate to heavy” or “very heavy,” the appraiser's Notice of Value will call for a wood-destroying pest report before the loan can be guaranteed.
Who pays changed in 2022. Under VA Circular 26-22-11, dated June 15, 2022, a veteran buyer may be charged the wood-destroying pest inspection fee in any state where the Notice of Value requires the report. Before that circular the VA allowed it in only a short list of states, which is why you will still find older articles saying you cannot pay.
Where An Inspection Is Required
The VA publishes the result as a state-and-county list. An inspection is required everywhere in about 34 states and territories; in Colorado, Iowa, Nebraska, Nevada, New York, Pennsylvania, Utah and Wisconsin it applies only in named counties. That list moves, so rather than reprint it here: your lender and the VA appraiser determine it for the specific property, and the Notice of Value is what makes it a condition of your loan. Send me an address and I can tell you in a minute.
Professional pest inspectors will review the home and make sure there are no pests before allowing the process to be approved and move forward.
Who Pays For The Inspection
Lenders still need an itemized invoice identifying the veteran and the property so the cost can be verified on the Closing Disclosure — that requirement did not change. What changed is that since June 15, 2022 a veteran may pay that fee in any state where the Notice of Value calls for the report.
It is still worth negotiating. The VA explicitly encourages buyers to ask the seller to cover the inspection and any repairs, and sellers, agents and lenders may all still pay it. Being allowed to pay is not the same as it being your bill.
The same circular lets veterans pay for repairs required to meet the VA's Minimum Property Requirements, including work identified on the pest report and conditioned on the Notice of Value. Again, that is permission, not obligation — ask the seller first.
If you would like to learn more about this process, contact us today.