FHA Loans and Pest Control Issues
May 20, 2025
How much do you know about termites and other wood-destroying pests? You could save time and money by knowing key details ahead of time.
True or False: Standard FHA-required hazard insurance policies automatically include coverage for damage caused by termite infestations.
Answer: False
Typical hazard insurance policies, including those meeting basic FHA requirements, generally do not cover damage from termites or other wood-destroying insects. Such damage is often considered a maintenance issue rather than a sudden, accidental peril covered by standard hazard insurance. The FHA's primary concern with pests is ensuring the property is free from active infestation and related damage when the loan is made.
True or False: The FHA mandates a pest inspection for every property seeking an FHA-insured loan, regardless of location or condition.
Answer: False
According to HUD guidelines, a pest inspection (specifically for wood-destroying insects) is not automatically required for all existing properties. It becomes an FHA requirement if the appraiser notes evidence of a possible active infestation, if such inspections are customary in that particular geographic area, if state or local laws mandate it, or if the lender, at their discretion, requires one.
True or False: If an FHA appraiser observes signs of potential termite activity during their property assessment, no further action regarding pests is typically needed for the loan to proceed.
Answer: False
If an FHA appraiser notes any evidence of active wood-destroying insect infestation or significant damage, a further inspection by a qualified pest control company is generally required. The FHA's goal is to ensure the property meets its minimum standards for health, safety, and structural integrity before insuring the loan.
True or False: If a mandatory pest inspection reveals an active termite infestation in a home being purchased with an FHA loan, the FHA will still insure the loan as long as the buyer agrees to treat the issue after closing.
Answer: False
If an active infestation of wood-destroying insects or significant damage is confirmed, FHA guidelines typically require that the condition be professionally treated and any related damage repaired before the loan can be closed and insured. The property must be certified as free of active infestation.
True or False: For newly constructed homes in areas known for high termite risk, the FHA may require the builder to guarantee that preventative measures against termites were taken.
Answer: True
In geographic areas prone to termite infestation, HUD guidelines often require builders of new homes to provide documentation, such as Form HUD-NPMA-99-A (Subterranean Termite Protection Builder's Guarantee), certifying that the property was appropriately treated for subterranean termites or constructed with termite-resistant materials according to specific standards. This provides a one-year guarantee from the builder.
True or False: An FHA borrower can ignore a lender's requirement for a pest inspection if they believe the property is in excellent condition.
Answer: False
Lenders have the discretion to require a pest inspection for an FHA loan, even if not automatically triggered by other FHA criteria. If the lender requires it as a loan condition, the borrower must comply for the loan process to continue.
True or False: The FHA requires borrowers to maintain a separate, ongoing "termite insurance" or "pest insurance" policy throughout their FHA loan, similar to flood insurance in high-risk areas.
Answer: False
While the FHA is concerned with the property being free of pest damage and infestation at the time of loan origination, it does not typically require borrowers to maintain a specific, ongoing insurance policy that exclusively covers future termite or pest damage. Standard hazard insurance usually excludes this, and the FHA focuses on the property's condition at closing and the borrower's ongoing maintenance.
FHA Loan Articles
June 30, 2026FHA loans offer low down payment options and more forgiving credit requirements for borrowers who may not qualify for a conventional mortgage or need to save more money out of pocket at the front end of the mortgage. But even with more forgiving credit requirements, some borrowers are tempted to omit certain debt information from their home loan applications. What does it mean to conceal a debt or financial situation from your loan officer?
June 30, 2026Some borrowers start working on their credit scores but get impatient with the process because they can't predict when their efforts will change their FICO scores. How long does it take for your FICO scores to update when you pay off a loan, reduce your credit card balances, or take other steps to make yourself a better credit risk? The short answer is that credit reporting procedures are not standardized, and it may take more time than you realize to get those positive credit actions added to your credit report.
June 29, 2026Mortgage interest rates are "moving targets" shaped by national economic trends and the borrower's specific financial profile. What is your FHA loan interest rate? Much depends on the financial data you bring to the table. Lenders set interest rates daily based on a snapshot of market conditions, but the rate ultimately offered also reflects risk, equity, and the lending institution's internal operational costs.
June 28, 2026An FHA appraisal differs from a conventional appraisal. While the goal of a conventional appraisal centers on market value, the FHA appraisal also focuses on the buyer's safety and soundness. FHA lenders select the appraiser, not the home buyer.
June 24, 2026FHA loan closing costs vary by property price and geographic location, rather than by a single nationwide flat fee. Total settlement charges combine percentage-based fees, local government taxes, and marketplace service costs. If you are new to buying a home, you'll want to get familiar with the closing cost issues discussed here to avoid budgetary surprises later on.
