The Appraiser must observe the foundation and perimeter of the buildings for evidence of wood destroying pests. The Appraiser’s observation is not required to be at the same level as a qualified pest control specialist. If there is evidence or notification of infestation, including a prior treatment, the Appraiser must mark the evidence of infestation box in the Improvement section of the appraisal and make the appraisal subject to inspection by a qualified pest control specialist.
The Mortgagee must confirm that the property is free of wood destroying insects and organisms. If the appraisal is made subject to inspection by a qualified pest control specialist, the Mortgagee must obtain such inspection and evidence of any required treatment to confirm the property is free of wood destroying insects and organisms.
Soil poisoning is an unacceptable method for treating termites unless the Mortgagee obtains satisfactory assurance that the treatment will not endanger the quality of the water supply.For additional information see Handbook 4000.1 II.A.3.a.ii(R) and II.D.3.n.iii available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh