Conventional loan, peeling paint prior to 1978

[S3Will]

How do you handle peeling/chipping paint on a house built prior to 1978 for a conventional loan? Is it a physical deficiency that affects livability (health & safety)? Or a cosmetic issue that can be bracketed/adjusted under Condition?

 

[glenn walker]

How do you handle peeling/chipping paint on a house built prior to 1978 for a conventional loan? Is it a physical deficiency that affects livability (health & safety)? Or a cosmetic issue that can be bracketed/adjusted under Condition?

Cosmetic and part of overall condition. How much to paint ? Not that much .

 

[Surf Cat]

Why would peeling paint be a heath and safety issue? I mean, unless it's lead paint and you're eating paint chips....

 

[Digger88]

Not mandatory for FF even if built before 1978. It would be a condition issue.

 

[ZZGAMAZZ]

How do you handle peeling/chipping paint on a house built prior to 1978 for a conventional loan? Is it a physical deficiency that affects livability (health & safety)? Or a cosmetic issue that can be bracketed/adjusted under Condition?

I knew that nobody would agree with me, but IMO if the factor/issue poses a potential lead based paint-based health & safety hazard, it gets reported "subject to" remediation regardless of the client or the type of loan. What you gonna do? Scope away a safety hazard because the conventional loan didn't require you to do so? Of course I am almost always wrong when I go up against the AF but this seems like a no-brainer to me, i.e., how does the appraiser conveniently overlook a factor that is potentially harmful to the extent that HUD declares it as an absolute hazard, regardless of who underwrites the loan?

 

[S3Will]

I knew that nobody would agree with me, but IMO if the factor/issue poses a potential lead based paint-based health & safety hazard, it gets reported "subject to" remediation regardless of the client or the type of loan. What you gonna do? Scope away a safety hazard because the conventional loan didn't require you to do so? Of course I am almost always wrong when I go up against the AF but this seems like a no-brainer to me, i.e., how does the appraiser conveniently overlook a factor that is potentially harmful to the extent that HUD declares it as an absolute hazard, regardless of who underwrites the loan?

I agree with you. I've noticed over the last year FHA UW have been hitting lead paint harder. When I got onboarded to the VA panel, it was made very clear to me that lead paint is big issue to watch for.

 

[Terrel L. Shields]

for a conventional loan?

define conventional. Conventional non-conforming? (in house bank) Conventional - Fannie, Freddy, GSE? VA or FHA? WIki= Conventional loans are home loans offered by private lenders without any direct government backing. In other words, unlike FHA loans, they aren't insured or guaranteed by a government agency.

I knew that nobody would agree with me

You are right. the non-conforming loan probably doesn't give a crap but if you don't provide an "as is" value for non-conforming conventional lenders your are likely to get a lot of grief. There is a difference between loan programs and you need to know the difference between when you are supposed to require remediation and when you are only going to recommend remediation.

 

[ZZGAMAZZ]

define conventional. Conventional non-conforming? (in house bank) Conventional - Fannie, Freddy, GSE? VA or FHA? WIki= Conventional loans are home loans offered by private lenders without any direct government backing. In other words, unlike FHA loans, they aren't insured or guaranteed by a government agency.


You are right. the non-conforming loan probably doesn't give a crap but if you don't provide an "as is" value for non-conforming conventional lenders your are likely to get a lot of grief. There is a difference between loan programs and you need to know the difference between when you are supposed to require remediation and when you are only going to recommend remediation.

Ahhhh, probably hard to believe, but the altertnative to "recommend" the remediation rather than to require it never crossed in mind, although is totally palatable IMOI. Thanks.

 

[ZZGAMAZZ]

I agree with you. I've noticed over the last year FHA UW have been hitting lead paint harder. When I got onboarded to the VA panel, it was made very clear to me that lead paint is big issue to watch for.

S3: I don't wish to create a different thread, but do you happen to know whether it might be worth my time as a Cert Res in SoCal to try to be added to the VA Panel?

 

[Vermonter]

ow does the appraiser conveniently overlook a factor that is potentially harmful to the extent that HUD declares it as an absolute hazard, regardless of who underwrites the loan?

You realize you can provide an as-is value without overlooking the lead paint issue, right?

It's the clients call

That being said all my local banks require the properties meet HUD MPR for health and safety on ALL loans.