Real Estate Termite Inspection Requirements
Termite inspections occupy a defined, regulated role in real estate transactions across the United States, affecting loan approvals, sale contingencies, and disclosure obligations. This page covers what qualifies as a compliant inspection, which transactions require one, how reports are classified, and where regulatory requirements diverge between transaction types and states. Understanding the inspection framework matters because gaps in compliance can delay closings, void financing, or expose sellers to post-sale liability.
Definition and scope
A real estate termite inspection is a structured visual examination of an accessible structure — and, where required, its immediate soil environment — conducted by a licensed pest control operator to identify evidence of wood-destroying organisms (WDOs). The inspection scope is defined by state pesticide and pest control licensing statutes administered by each state's department of agriculture or equivalent regulatory body.
The formal deliverable is a Wood-Destroying Organism (WDO) report, sometimes called a pest inspection report or termite clearance letter. In most states, this report documents not only active infestation but also prior damage, conducive conditions, and inaccessible areas. The National Pest Management Association (NPMA) publishes a standardized form — the NPMA-33 — used across 48 states as the default reporting instrument. California uses its own form (the "Wood Destroying Pest and Organism Inspection Report") administered under California Business and Professions Code §8516.
Scope definitions matter legally. A standard WDO inspection covers termites, wood-boring beetles, carpenter ants, and fungi causing wood decay. It does not assess structural integrity or construction defects. The distinction between a WDO inspection and a termite damage assessment is significant: the latter is a separate evaluation, often performed by a structural engineer or contractor, addressing the extent of damage already caused.
How it works
The inspection follows a defined sequence enforced by state licensing boards:
- Pre-inspection documentation review — The inspector reviews available construction records and any prior WDO reports attached to the property.
- Exterior perimeter inspection — Ground-level examination of foundation walls, sill plates, wood-to-soil contact points, and termite mud tubes.
- Interior inspection — Accessible crawl spaces, basement framing, garage structures, and interior walls where termite evidence (frass, damage, swarmers) may be visible.
- Substructure inspection — Where accessible, underslab areas, pier foundations, and utility penetrations are checked.
- Report generation — Findings are recorded on the applicable state form within a mandated timeframe (typically 5 business days in most states).
The termite inspection services report classifies findings into two broad categories in most states:
- Section 1 (Active or Past Infestation/Damage): Conditions requiring treatment or repair before the transaction closes. Lenders typically require these to be remediated before funding.
- Section 2 (Conducive Conditions): Conditions that invite future infestation — wood debris in soil, excessive moisture, inadequate ventilation — that are disclosed but not always required to be corrected at closing.
This two-section structure is standard in California; other states using the NPMA-33 format use a comparable active/inactive and conducive conditions framework.
Common scenarios
Federally backed loans (FHA and VA): The U.S. Department of Housing and Urban Development (HUD) and the Department of Veterans Affairs (VA) both require termite inspections as a condition of loan approval in defined geographic areas. VA loan guidelines (VA Pamphlet 26-7, Chapter 12) mandate a termite inspection for all purchase loans in states classified as having a moderate-to-heavy termite infestation probability, based on a national risk map. HUD/FHA follows comparable geographic criteria under Handbook 4000.1.
Conventional loans (Fannie Mae/Freddie Mac): Fannie Mae's Selling Guide does not universally require a termite inspection but allows lenders to condition approval on one when evidence of infestation or damage appears in the appraisal or when state law mandates disclosure.
Cash transactions: No federal requirement applies. State disclosure laws govern. In Texas, sellers must disclose known termite damage under the Texas Real Estate Commission (TREC) seller's disclosure form; the inspection itself remains negotiated between parties.
New construction: Pre-closing inspections on new construction are distinct from termite pre-construction treatment compliance inspections. Some states require a certificate of pre-construction soil treatment before a certificate of occupancy is issued.
Decision boundaries
When a lender-required inspection differs from a buyer-requested inspection: Lender-mandated inspections exist to protect collateral; buyer-requested inspections exist to inform purchase decisions. These may be performed simultaneously or separately. A lender's inspector works within the loan conditions; a buyer may separately commission a second opinion termite inspection for independent verification.
State-licensed inspector vs. general home inspector: In all 50 states, issuing a WDO report requires a specific pest control license or a separate WDO inspector certification. A general home inspector who is not licensed for WDO inspections cannot produce a legally valid termite clearance. The termite control service licensing requirements page details state-by-state licensing classifications.
Validity period: WDO reports carry a defined validity window. VA guidelines specify a 90-day validity period for the termite report relative to loan closing. States impose their own expiration standards — California requires reinspection if more than 2 years have passed since the previous report.
Clearance vs. treatment requirement: A report showing Section 1 findings does not automatically block a sale. The parties negotiate who performs and funds subterranean termite control services or drywood termite control services, and the lender confirms remediation before funding. The termite control cost guide provides cost ranges applicable to these negotiation contexts.
References
- VA Pamphlet 26-7, Lender's Handbook — Chapter 12 (Minimum Property Requirements)
- HUD Single Family Housing Policy Handbook 4000.1
- National Pest Management Association — NPMA-33 Wood Destroying Insect Inspection Report
- California Business and Professions Code §8516 — Structural Pest Control Board
- Texas Real Estate Commission — Seller's Disclosure Notice
- Fannie Mae Selling Guide — Property and Appraisal Requirements
- U.S. EPA — Termiticide Registration and Regulation