FHA & Peeling Paint: What Every Homeowner Needs to Know

Are you planning on selling or buying a home built before 1978?  If so, you need to be aware of the possibility of lead-based paint.  Since lead poisoning is a serious health concern, checking for the possibility of peeling or chipping paint is a must for any appraiser completing an appraisal for FHA, VA, or USDA financing.

Appraisers cannot know if a home contains lead paint or not, nor are we required to.  We simply must note any surface which shows signs of peeling or chipping paint and call for the removal of the peeling paint (yes, even if it was just painted 10 years ago!).

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When does this rule apply?

1. The peeling paint rule always applies to FHA, USDA and VA appraisals, but it can also apply to conventional appraisals.  If an appraiser notes that peeling paint is a health or safety concern, even on a conventional appraisal, it will need to be remedied before the loan can close.
2. This rule applies to any surface showing signs of peeling and/or chipping paint, regardless of when the material (i.e. wood) was painted.  You may have painted the wood trim three years ago, but if the paint has started to peel, and your home was built in 1945, the peeling paint must be removed.
3. Remember that this rule applies to any structure on the property.  This includes the home (interior and exterior) of course, plus any other structures like garages, storage buildings, and decks.
4. This rule applies to any home built before 1978.  Several sites on the internet state 1979, but per HUD, the correct year is in fact 1978.

So how do you remove peeling paint on a pre-1978 home?

According to the HUD website, peeling, chipping or flaking paint must be removed by the approved method of scraping the defective surface(s) and then reapplying new paint. It’s very important to pay close attention to flakes of paint which might fall during the removal process as they could still present health and safety concerns. To be safe, remove any flaking or peeling paint down to the bare wood and repaint. And keep a drop cloth under you so cleanup is a breeze!

Here it is in even simpler terms:

1. Scrape.  Any surface that has peeling or chipping paint needs first to be scraped.  It’s important to not skip this step and go straight to step 2 (paint). First things first:  scrape the old flaking paint off.
2. Paint.  Apply a new coat of paint over any bare surfaces, or any surface you just scraped.
3. Remove.  Get rid of those old paint chips!  This may be the most often-overlooked step in the whole process.  If you follow steps one and two, but fail to pick up the paint chips you scraped off, the appraiser will need to come back again.  Often times, leaving loose paint chips on the ground is more of a health concern than when they were on the house, because now, the chips are easier for little fingers to grab when the kiddos are playing out in the yard.  

If you’d like more info, this short article on the Department of HUD’s website is very helpful, especially if your home was built prior to 1978 and you have young children at home.

Helping homeowners navigate the appraisal process,

Ryan Bays, SRA, AI-RRS