A termite letter is a licensed pest professional’s inspection report stating whether a home shows active wood-destroying insects, evidence of past infestation, or conditions that invite them. Most mortgage lenders require one before they’ll fund a home purchase, and the report has a short shelf life that can trip up a slow closing. Its formal name is a Wood Destroying Insect Inspection Report, or WDIIR.
What the Inspection Actually Covers
The inspection targets four categories of wood-destroying insects: termites, carpenter ants, carpenter bees, and reinfesting wood-boring beetles (commonly called powderpost beetles).1National Pest Management Association. Wood Destroying Organism Attachment The inspector looks for visible evidence of active colonies, signs of previous infestations such as mud tubes or exit holes in wood, and indicators of past treatments like drill marks in concrete or bait stations around the perimeter.
The report also flags what the industry calls “conducive conditions,” meaning environmental factors that invite future problems. These include wood in direct contact with soil, moisture accumulation near the foundation, inadequate crawlspace ventilation, debris left under the structure, and firewood or mulch stacked against exterior walls. The inspector doesn’t fix any of this, but documenting it gives you leverage to negotiate corrections before closing.
The finished report lands on one of two determinations: the structure appears free of infestation based on what the inspector could see, or it doesn’t and remedial steps are needed. In most transactions the report is recorded on the standardized NPMA-33 form, which is mandatory for HUD- and VA-backed loans and accepted by most conventional lenders. Some states require their own form instead.2National Pest Management Association. Suggested Guidelines for Completing the Revised NPMA-33 Form
What the Inspector Cannot See
The inspection covers only visible and accessible areas. No one is tearing out drywall, pulling up carpet, or moving appliances. Standard disclaimers exclude finished basement walls, areas behind built-in furniture or stored belongings, sections covered by insulation, and any space that would require a ladder, drill, or removal of finished materials to reach. Detached structures like sheds, fences, and standalone garages are excluded unless specifically noted.
A clear termite letter is not a guarantee the home is pest-free. It’s a professional opinion based on what was observable the day of the inspection. In older homes especially, significant damage can hide behind walls and under floors for years.
When Your Loan Requires a Termite Letter
Whether you need a WDIIR depends on your loan type, the property’s location, and what the appraiser sees. Requirements vary enough between programs that this is where deals sometimes stall.
VA Loans
The VA publishes a state-by-state list of where wood-destroying insect inspections are required as a condition of the Notice of Value. The requirement covers the entire state in more than 30 states and territories; others require it only in specific counties.3Veterans Benefits Administration. Local Requirements – VA Home Loans Even if a state isn’t on the list, an inspection is required when the VA appraiser notes evidence of infestation or wood damage.
One common misconception: the VA used to prohibit veterans from paying the pest inspection fee, but that changed in 2022. Under current policy, veterans may be charged the inspection fee and may also pay for any repairs needed to meet minimum property requirements. The VA encourages veterans to negotiate these costs with the seller, but no rule forces the seller to pay.4Veterans Benefits Administration. Circular 26-22-11 Pest Inspection Fees and Repair Costs
FHA Loans
FHA does not require a termite inspection on every transaction. It becomes mandatory when the appraiser notes evidence of decay or pest infestation, when state or local law requires it, when it’s customary in the area, or at the lender’s discretion. When a clear report is required, all improvements within the property lines must be inspected and free of active infestation. The report is valid for 90 days from the inspection date.5HUD. HUD HOC Reference Guide – Pest Control
USDA Loans
USDA Rural Development loans take a hands-off approach. The agency itself does not determine whether a pest inspection is needed. An inspection is required only if the lender requests it, the appraiser flags a concern, or state law mandates one.6USDA Rural Development. Existing Dwelling Requirements and Escrow Accounts
Conventional Loans and Cash Purchases
Conventional lenders set their own policies, and many require an inspection in regions with high termite activity even without a federal mandate. Cash buyers have no lender requirement at all, but skipping the inspection is a gamble. Termites work behind walls and under foundations, often causing thousands of dollars in structural damage before anyone notices. A $100 inspection is cheap insurance against discovering later that the floor joists are hollowed out.
Arranging the Inspection
The purchase contract typically spells out who hires the inspector and who pays. In most transactions the buyer covers the inspection as part of due diligence, though this is negotiable and varies by local custom. Costs generally range from $75 to $325 depending on the property’s size and location, with most inspections landing around $100 to $150.
Only a pest control professional licensed in the wood-destroying organism category can legally perform the inspection and sign the report. The specific license designation varies by state. Before hiring an inspector, verify their license through your state’s pest control regulatory agency; most states maintain a searchable online database.2National Pest Management Association. Suggested Guidelines for Completing the Revised NPMA-33 Form
The inspector needs unrestricted access to crawlspaces, basements, attics, and the exterior perimeter. If the seller has a history of termite treatments or an active pest control warranty, hand that documentation over upfront. Knowing what chemicals were applied and when helps the inspector distinguish old evidence from a new problem. Schedule the inspection early in escrow. Waiting until the last week before closing is how deals get delayed, because if treatment turns out to be necessary, you need time to complete it and get re-inspected.
What Happens If the Report Comes Back Positive
A positive WDIIR doesn’t automatically kill the deal, but it triggers a chain of decisions that both parties need to navigate quickly. The inspector’s job is to report what they found. They typically aren’t the ones evaluating structural damage or performing repairs.
If active infestation is found, treatment must happen before most lenders will fund the loan. For subterranean termites, this usually means a liquid soil barrier around and under the foundation, or a bait system. Spot treatments may be sufficient when the infestation is localized and no warranty is needed; widespread activity usually calls for a full perimeter treatment. Treatment for wood-boring beetles generally involves surface application of insecticide to affected timbers or moisture remediation. After treatment, a follow-up inspection verifies the problem has been addressed, and the treatment company’s documentation gets attached to the original report.
If structural damage exists, a contractor or structural engineer, not the pest inspector, should evaluate the extent. Repair costs for termite damage average around $1,800 nationally but can reach $10,000 or more when load-bearing walls or support beams are involved.
Who pays depends entirely on what the purchase agreement says. In many contracts the seller is responsible for treatment and repair costs up to a negotiated cap. Some sellers counter by offering a credit at closing instead of completing the work themselves. Be cautious about accepting a credit without understanding the full scope of needed repairs; $1,000 doesn’t go far if a support beam needs replacing. If the seller refuses to address the problem and you aren’t willing to absorb the cost, you can usually walk away under the inspection contingency.
The 90-Day Clock
Termite letters expire. Most lenders treat the report as current for about 90 days from the inspection date, though timelines vary by lender and loan type.5HUD. HUD HOC Reference Guide – Pest Control FHA explicitly sets a 90-day validity window. If closing gets pushed past the expiration date, you’ll need a fresh inspection at additional cost, and if the new report finds something the first one missed, it can reopen negotiations or stall funding entirely.
Once the report is finalized and current, it goes to the mortgage lender as part of the loan package. The underwriter reviews it to confirm the collateral isn’t being eaten from the inside out. At closing, the WDIIR is typically included in the stack of documents both parties sign, and after closing it becomes a permanent part of the transaction file held by the settlement agent.
Track the expiration date from the moment the inspection is completed. If you’re already in a slow-moving escrow, flag the timeline to your real estate agent and lender early. A lender refusing to fund because of an expired termite letter is entirely preventable, and it happens more often than you’d think.
Termite Letters Versus Termite Bonds
A WDIIR is a snapshot. It tells you what the inspector saw on one particular day. A termite bond is an ongoing service contract with a pest control company that provides annual inspections and guaranteed retreatment if termites return. These are different products that serve different purposes, and confusing them causes problems at closing.
There are two main bond types. A retreat bond covers the cost of future treatments if termites reappear but doesn’t pay for damage repair. A repair bond covers both retreatment and structural damage up to a specified limit. Repair bonds cost more, with annual fees typically running a few hundred dollars, but they provide substantially better protection. Either type includes periodic inspections, usually annually, to catch problems early.
If the seller already has an active termite bond, check whether it transfers to the new owner. Many bonds do, which can be a genuine selling point. Ask the pest control company about transfer requirements, any associated fees, and whether coverage terms change upon transfer. An existing bond doesn’t replace the need for a WDIIR at closing, because your lender still wants a current inspection report, but it does give you ongoing protection a one-time letter cannot.