Who Pays for Termite Inspections in FHA Loans?

FHA loans offer low interest rates and flexible credit requirements to make achieving home ownership affordable. To ensure buyers are investing in a quality home, FHA requires that the property meet certain standards, and sometimes depending on the condition of the home or local laws, a termite inspection may be required. Termite damage can be a costly repair, invisible to the untrained eye. A termite inspection reveals past, present and possible future damage. FHA does not dictate who is responsible for the inspection, so this is negotiable.

Termite Inspection Requirements

A termite inspection is only required by FHA in a few difference circumstances: if there is evidence of an active infestation, or if a termite inspection is mandated by the state or required by the lender. If termites or other wood-eating insects are found, they must be removed from the property and reinspected before the loan will be approved. Inspection costs are a negotiable part of the sales contract.

What Inspections Reveal

A termite inspection is not limited to just termites. It is actually an inspection for wood-destroying insects and organisms. The inspector is searching for ants, bugs and fungus that can cause damage to the home. After an inspection, buyers are given a report that shows existing damage or infestations and areas that may be susceptible to termites, dry rot, or other insects.

Home Inspections

Lenders must require a home inspection for FHA loans, typically at the buyer's expense. The inspection is required in order to make sure the property meets the FHA’s guidelines. If the home is not up to FHA standards, the home may not qualify for the loan unless the necessary repairs are made. A standard home inspector may suspect termite damage, but he is not trained to identify its extent or recommend treatment and repairs. When a termite inspection is needed, it should be conducted by a licensed termite inspector.


FHA requires an appraisal to determine the value of the home. The appraisal is for the benefit of the lender. An appraisal is not a home inspection. However, FHA does take steps to ensure the property is in safe, sound and sanitary condition. If the FHA appraiser discovers evidence of a termite infestation, the home must be professionally inspected in that case as well.