Termite Requirements

1. An appraiser may require a termite/pest control report on any type property, of any age, if during the property inspection, there is visual evidence of termite, pest, dryrot or water damage. The appraiser must cite specific visual evidence in the appraisal report to support the termite/pest report requirement. If a property is located in an area where the appraiser or underwriter has knowledge that termite/pest infestation is common, and there is no evidence that the property has been inspected by a pest control firm within the past several years, the appraiser or underwriter may require a report citing local conditions and age of the property as the reason for the report.

2. A termite/pest control report must cover all buildings and structures within the property boundaries. "Limited Scope" reports should not be ordered and should not be accepted by a lender.

3. The original inspection cannot be more than 6 months older than the date
of the appraisal, and the clearance report must not be more than six months old
at the time the loan closes.

4. The corrective work to cure the active infestation of termite;, pests,
dryrot, and water damage listed in Section I of the Termite/Pest Control Report must be completed and cleared.

5. The recommended work items contained in Section 11 of the Termite/Pest Control Report may be waived by an underwriter except for:

a. The earth to wood clearance requirement (6 inches)
b. Those specific repair conditions contained in the appraisal report
c. Items that the underwriter deems necessary to protect the physical security of the loan.

Upon obtaining an inspection report disclosing no infestation or infection the following certification must be listed on the report or Notice of Work Completed/Not Completed form:

"This is to certify that the above property was inspected on __(DATE) In accordance, with the Structural Pest Control Act and rules and regulations adopted pursuant thereto and that no evidence of active infestation or infection was found."

When the inspection report prepared discloses infestation or infection, and the notice of work completed prepared indicates that all recommendations have been completed, the following certification must be listed:

"This is to certify that the property described herein is now free of evidence of active infestation or infection."

In compliance with the above referenced rules and regulations established by the Structural Pest Control Act along with specific guidelines established by the Federal Housing Administration (FHA), Veterans Administration (VA), Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA), and Fair Oaks Mortgage, an outline of suggested Guidelines is being provided for your reference.

1. The Termite/Pest Control Report may not be waived in its entirety if required by the appraiser.

2. The Termite/Pest Control Report repairs to non-living area structures (sheds, detached garages, barns, etc.) may be waived provided that
(1) the appraiser has indicated that these structures do not contribute to the value of the property,
(2) the underwriter concurs that the structures do not contribute to the property value,
(3) the structures do not present a health or safety hazard,
(4) the structures are an adequate distance from the living area dwellings), and
(5) an inspection report of the structure has been performed by a licensed pest control company.

In these cases, the structures are either to be torn down and removed from the site or have the purchasers) sign a statement acknowledging that the corrective work will not be performed and they accept the structures "as is".

If all of the above conditions cannot be met, all structures must either be repaired and included in value or be excluded in value and torn down and removed from the site.

1 . All crawl space constructed dwellings must be fully accessible for Termite/Pest Control Inspections.

2. Inaccessible areas such as under wood decking or porches may be exempt from a termite/pest control inspection provided that (1) there is earth to wood clearance of six inches, (2) there is adequate natural ventilation, (3) there is not visual evidence of any termite, pest, dryrot, or water damage, and (4) a purchasers) sign a statement acknowledging that the area has not received a Termite/Pest Control Inspection.

Termite reports must be clear of all active infestation, dryrot, fungus infections and earth to wood contact.

2.Date of Inspection-(clearance cannot be more than 6 months from date of closing).

4.Stamp Number-(a stamp number must be referenced to identify the document has been filed with Structural Pest Control Board).

5.Original report and any supplemental reports or reinspection reports-(we must verify all reports).

a. Substructure- must be inspected

b. Stall Shower- water must be tested

c. Foundations- must be inspected

d. Porches/steps- must be inspected

e. Ventilation- adequate ventilation

f. Abutments

g. Attic Spaces- must be visually inspected

h. Garages- must be inspected (attached/detached)

i. Decks/Patios-must be inspected

j. Other-interior, read to identify any findings

k. Other-exterior, read to identify any findings

l. Diagram-the diagram identifies all structures which have been included in the inspection report.

m. Signature-all reports must be signed by the Pest Control Inspector.

n. All subsequent pages must be read to identify all findings and recommendations.

o. A clearance must be Issued specifically stating the following verbiage:

"This is to certify that the above property was inspected on (date of inspection) in accordance with the Structural Pest Control Act and rules and regulations adopted pursuant there to, and that no evidence of active infestation or infection was found in the visible, accessible areas. "

7. Signature of the Borrower is preferred on all reports and clearances. On VA loans it is mandatory the Veteran sign with the following verbiage:

"The undersigned veteran acknowledges receipt of a copy of the report at no expense to me." (The expense portion may be deleted on a refinance transaction.)

Clearance: "The recommendations in this report have been completed to my satisfaction at no expense to me." (The expense portion may be deleted on a refinance transaction.)