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Old 05-04-2012, 01:35 AM
 
Location: Evanston, IL
1 posts, read 3,103 times
Reputation: 10
Default FHA Appraisal, Lead Paint: outside-the-box options

My husband and I are looking at buying a house that was built in 1888 and we have an FHA loan. There is a very good chance that there will be lead paint in this house. Unfortunately, there is peeling wallpaper and paint in the house (and possibly on the garage and shed, although I don't know when those were put up so I'm not sure if they'd count). So, there's a very good chance that the appraisal will say that the loan can't go forward until these things are fixed. So, I have two questions:

1) If we want to fix it ourselves, are we allowed to? I'm not sure that the FHA loan will allow us to do it ourselves and, honestly, although we could probably do the peeling paint on the inside, I'm seriously doubt our ability to do so to the paint outside. If we did do it this way we would have the seller put money in escrow so that, should the sale fall through, we would be paid for our time. (A lawyer friend recommended this.) Or would we have to hire a professional to do it?

2) Would it be possible to have a person come in and test for lead paint? Would the loan then accept the paint job in only the areas that had lead paint or would the paint job on everything they pointed out still be required?

Thank you in advance for any information that you can give me.
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Old 05-04-2012, 10:06 AM
 
Location: Not where you ever lived
10,782 posts, read 14,516,391 times
Reputation: 5334
Asbestos shingles and siding must be removed professionally. Do you have small children??? It is the curious toddlers that eat lead paint. Your banker should know the rules. So will any RD or FHA office.
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Old 05-05-2012, 07:52 AM
 
Location: Chicago area
1,789 posts, read 1,847,246 times
Reputation: 1176
I am a loan processor. I don't currently do FHA loans, so I don't know the current rules, but back when I bought my 1880 house 10+ yrs ago, they did not need to remediate lead paint. All peeling paint needed to be scraped and repainted, but they did not test for lead. Do you have a contract on this house? If not, you could have testing the paint written into the contract and painting and scraping as well. If the seller really wants to sell and they are not getting other offers, they will have to take care of the paint if they are to sell to you. I would be concerned about the peeling paint and wallpaper inside. I have never seen interior paint peel unless it was due to water damage. I would be very concerned about a leaking roof and the potential for hidden mold. FHA will require a termite inspection. You really should be using a real estate attorney, the $400-500 investment is usually well worth it.
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Old 05-05-2012, 10:54 AM
 
Location: Not where you ever lived
10,782 posts, read 14,516,391 times
Reputation: 5334
I would also add a recommend a Mold audit by a STATE certified inspector to rule out hidden mold problems behind the peeling paper. Mold mitigation can cost as much as your house to make it safe to live in. I would also recommend your own independent House inspection. The inspection by the mortgagor is not generally very thorough. They want to know if the house is inhabitable, in a flood plain or not, and if the area is marketable. FHA, VA and RD have different requirements. ,
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Old 05-08-2012, 04:02 AM
 
Location: Chicago, IL SouthWest Suburbs
3,528 posts, read 2,806,386 times
Reputation: 6078
You would want a licensed contractor do the paint job.
Lead paint is frowned upon by the FHA and needs to be taken care of prior to the loan closing.

I do not believe the FHA would be allowed to hold money back in escrow for peeling lead paint due to its hazards.

The seller will run into this again until its repaired.

The only other viable option is a regular loan and if its not called to the attention to the lender by the appraiser.
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Old 05-11-2012, 11:47 PM
 
21,477 posts, read 35,351,953 times
Reputation: 10511
The exact FHA wording:
"VC-12 Lead Based Paint Hazard
For any home built prior to 1978, check for evidence of defective paints surfaces, including: peeling, Scaling or chipping pant. Both exterior and interior surfaces must be inspected."

The reason that 1978 is key is that when lead paint production was fully prohibited.

It is an FHA requirement that ALL defects as found are remedied BY THE SELLER prior to closing.

btw There is NO requirement for ANY asbestos testing or remediation. http://www.google.com/url?sa=t&rct=j...7zW8ykGyiqiQ4Q
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Old 05-12-2012, 08:12 AM
 
Location: Not where you ever lived
10,782 posts, read 14,516,391 times
Reputation: 5334
Asbestos was banned in 1980. Anyone curious about it should read this: Asbestos Shingles on Your House? What to Do When They Need to be Replaced! The article also addresses asbestos siding.
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