Lead Based Paint and Mold Mitigation in HUD Homes
If you are purchasing a HUD home that was built before 1978 AND you are an owner occupant AND you are going in with an FHA loan, then HUD will automatically do a lead based paint inspection (free to the buyer) on the subject property after you have gone under contract. The interesting point to this is that HUD will provide the lead based paint abatement free of charge to the FHA owner occupant UP TO $4,000 if their lead based paint report confirms lead based paint is present. As an owner occupant, this is a great deal, especially if there is minimal lead base paint in and around the home that can be taken care of for $4,000.
But buyer beware because there can be considerable lead based paint to take care of which can sometimes run way over HUD's $4,000 cap. In fact, it can run thousands and thousands of dollars over! And just who do you think is responsible for paying for that? You're right....the buyer! If the project demands, let's say, and additional $8-$10,000 to abate, then all of a sudden the property may no longer be in financial reach for the buyer and the buyer will not be able to proceed to closing. It is a sad fact that we do see some buyers run up against this issue from time to time. I've even seen abatements come in around $15,000 and knock the buyer right out of the contract!
So buyers - be aware of this potential and don't get too far down the home owner road until your agent gets the lead based paint report from HUD! Sometimes these reports can take a long time to get back and actually necessitate a contract extension to be signed and sent in on the buyer's side just to keep the contract alive and functioning until the report can be completed. Just another one of those interesting tidbits to keep in mind when traveling down the red brick.....I mean lead based paint road.