inspectionrepairtermite
(This question assumes a reputable pest control company.)
If a home termite report finds issues in need of repair, is it safe to assume the integrity of the house is intact after those repairs are completed (at least as far as termite damage is concerned)?
How would we know from a termite report if termites have "totaled" a house?
Below grade you should not be using EPS foam - that should be XPS (pink or blue, normally) - above grade EPS is fine. EPS is not waterproof, XPS is. You can also increase your subgrade insulation a bit by setting a sheet (or portion of a sheet) going flat or angled slightly downwards away from the house at the top of the footing.
If drainage is a concern (or even if it's not much of one) and you have the trench around the house dug, dig a trench away from the house to a lower point and place drainage tile (not usually actual tile these days - 3-4" perforated plastic pipe - the holes go down) around the footing and out to the lower point, and you'll have a solid drainage system in place. It's one of those things that should be done before the foundation is backfilled in the first place, as there will never be a cheaper time to do it, but rarely is. If filling with 16 grit sand, place filter fabric over the pipe to help keep the sand in place. Filter fabric is a good idea in general, but kind of critical with a sand fill. Pipe is already buried below the insulation, beside the footing, in the picture.
Unless it's going to be noticed by the authorities and cause you hassle for "illegally diverting rain water" (evidently happens in some areas) you might want to drain your foundation drains (and gutters, if any - otherwise it will mostly end up in the foundation drains) to a big buried tank (cistern) so you can use any water collected during the rest of the year, and only drain away the overflow, if any.
If it were me, I'd stick with your drainage improvements, monitor, and save pennies to fix this for real. 1920s-and-older construction is often significantly overbuilt (I've owned 5 so far, so take the sample for what it's worth statistically!) and can take a lot of abuse. You do want to fix this, but your time frame seems to be in months, not years. If you see shifting measured in millimetres, given the tectonic rates at which houses shift, you're probably ok for the next couple years. If your monitors show issues, move fast.
All of that is provided that you are not talking about significant (recent or contemplated) excavation, changes in the surrounding water behaviour (did you remove any trees?), and that you are getting the water far away from the foundation. Stabilize all that, and I bet you'll be ok for the next few years, assuming you have no seismic problems locally.
Also, of course, this advice is worth what you paid me for it; if you'd paid me, I would't give it. :) But that's what I'd do.
Best Answer
Bring in an engineer. The termite inspector's job is to tell you that there is damage and where. The engineer's job is to tell you how that affects the building and what can be done about it. (A home inspector likewise is generally tasked with pointing out what's an issue rather than telling you how big an issue it is, though you can sometimes read between the lines, especially if you walked through the inspection with him.)
Damage that affects structural members of a house may not be repairable. Folks in my neighborhood had to demolish an old farmhouse they'd bought because it had a combination of problems (not termite-related), and nobody was willing to try to fix either one for fear of causing the other to fail catastrophically.
(The termite inspector may give you a general sense of whether the damage is cosmetic, minor, or serious... which will at least tell you whether you do need the engineer's opinion.)