The HUD guideline for the FHA 203k loan program doesn’t “require” a pest control report however it does “require” a pest control clearance at the end of the project. Therefore all of the lenders I’m aware of have a “supplemental requirement” calling for a pest report going into the project if it is a “full 203k loan”.
What about a Limited 203k? Do we need a pest report? Not necessarily. If you don’t have one you don’t need to respond to the repairs. If you have one and it is a Limited 203k, you may now have to clear it.
On the other hand if the appraiser sees dry rot or termite damage they will call for a termite report and in doing so it is quite often deemed a structural issue and becomes a Full 203k.
If it isn't required why do we always get a termite report on a full 203k? It is a lender requirement. Since the program requires a clearance at the end of the project the lenders are smart enough to require we know the down side before it closes escrow.
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