PrincessLeia
Junior Member
- Joined
- May 24, 2010
- Professional Status
- Certified Residential Appraiser
- State
- Wyoming
Dear Fellow Appraisers,
Situation: I have 2 properties I am appraising/did appraise. Both are, or were, REOs in somewhat poor condition. Both have defective paint on the interior and were built pre-1978.
I submitted the 1st appraisal on the REO and recommended repair of the interior defective paint surfaces. Loan Officer freaked out, threatened me, etc. He was basically worried that the loan will not go through since owner is VA and will not perform repairs. Obviously, not okay for loan officer to go atomic on me for recommending repair of potential lead based paint. BUT, I DO want to help in whatever way I can and be able to advise them if alternate options exist.
I am appraising another property in a similar situation (but with WORSE interior defective paint surfaces) due tomorrow for the same client. Obviously, this will not go over well. I will not compromise my integrity on recommending repair of defective paint surfaces, HOWEVER, if alternate options exist, I would like the lender to know their options.
As a result, I did some more research into defective paint and found the following quotes on FHA's online database while doing an advanced search. :
Ref: FHA CFR §206.45: Eligible Properties (04/01/99):
“(d) Lead-based paint poisoning prevention. If the appraiser of a dwelling constructed prior to 1978 finds defective paint surfaces, §200.810(d) of this chapter shall apply unless the mortgagor certifies that no child who is less than six years of age resides or is expected to reside in the dwelling.”
When asking whether this document is still in force, all I've been told is that 4000.1 supercedes all prior documents. But no one can tell me if prior documents are still in force (as long as they don't conflict with 4000.1).
When I questioned the Denver Homeownership Center, I received the following quote via email, originally from (redacted), Acting Branch Chief, Appraiser Technical Support:
Ref: 4235.1 REV-1
1)When children under the age of seven will be residing in the property, the borrower must treat the defective paint surfaces in accordance with LPPPA requirements.
Since this quote was just emailed to me, I ASSUME it is still in force. (The Denver HoC rep that emailed it to me also assumed it was still in force and emailed that he believed it was.)
So, does this mean that if a mortgagor can certify that no child under age 7 will be residing in the property that defective paint does not need to be addressed as a part of the loan requirement? Obviously, as the appraiser I would still recommend repair. And in the 1st appraisal, I also offered the option to perform lead based paint testing to find out if the chipped paint is lead based. (There are quotes in 4000.1 that if the defective paint is tested and no lead is found, the defective paint is considered cosmetic and does not require repair).
But my question is: Does anyone have any experience with the above quotes? Or has anyone received a straight answer from FHA on what to do if the mortagor CAN certify that no one under the age of 6/7 will be residing or is expected to reside in the property?
The second property I am appraising was an REO when it was purchased 3 years ago. No improvements have been done. Interior features SIGNIFICANT peeling paint. It is a familial sale between cousins with the buyer going for a USDA loan (USDA uses HUD's requirements). The buyer is a single male with no children who could certify to the above. If defective paint must be addressed, almost the entire interior and a 4' picket fence surrounding the entire lot would need to be addressed prior to closing. So, you can see why, if the above quotes apply, they might make for a MUCH simpler closing on this particular property for this buyer.
Thanks in advance.
Situation: I have 2 properties I am appraising/did appraise. Both are, or were, REOs in somewhat poor condition. Both have defective paint on the interior and were built pre-1978.
I submitted the 1st appraisal on the REO and recommended repair of the interior defective paint surfaces. Loan Officer freaked out, threatened me, etc. He was basically worried that the loan will not go through since owner is VA and will not perform repairs. Obviously, not okay for loan officer to go atomic on me for recommending repair of potential lead based paint. BUT, I DO want to help in whatever way I can and be able to advise them if alternate options exist.
I am appraising another property in a similar situation (but with WORSE interior defective paint surfaces) due tomorrow for the same client. Obviously, this will not go over well. I will not compromise my integrity on recommending repair of defective paint surfaces, HOWEVER, if alternate options exist, I would like the lender to know their options.
As a result, I did some more research into defective paint and found the following quotes on FHA's online database while doing an advanced search. :
Ref: FHA CFR §206.45: Eligible Properties (04/01/99):
“(d) Lead-based paint poisoning prevention. If the appraiser of a dwelling constructed prior to 1978 finds defective paint surfaces, §200.810(d) of this chapter shall apply unless the mortgagor certifies that no child who is less than six years of age resides or is expected to reside in the dwelling.”
When asking whether this document is still in force, all I've been told is that 4000.1 supercedes all prior documents. But no one can tell me if prior documents are still in force (as long as they don't conflict with 4000.1).
When I questioned the Denver Homeownership Center, I received the following quote via email, originally from (redacted), Acting Branch Chief, Appraiser Technical Support:
Ref: 4235.1 REV-1
1)When children under the age of seven will be residing in the property, the borrower must treat the defective paint surfaces in accordance with LPPPA requirements.
Since this quote was just emailed to me, I ASSUME it is still in force. (The Denver HoC rep that emailed it to me also assumed it was still in force and emailed that he believed it was.)
So, does this mean that if a mortgagor can certify that no child under age 7 will be residing in the property that defective paint does not need to be addressed as a part of the loan requirement? Obviously, as the appraiser I would still recommend repair. And in the 1st appraisal, I also offered the option to perform lead based paint testing to find out if the chipped paint is lead based. (There are quotes in 4000.1 that if the defective paint is tested and no lead is found, the defective paint is considered cosmetic and does not require repair).
But my question is: Does anyone have any experience with the above quotes? Or has anyone received a straight answer from FHA on what to do if the mortagor CAN certify that no one under the age of 6/7 will be residing or is expected to reside in the property?
The second property I am appraising was an REO when it was purchased 3 years ago. No improvements have been done. Interior features SIGNIFICANT peeling paint. It is a familial sale between cousins with the buyer going for a USDA loan (USDA uses HUD's requirements). The buyer is a single male with no children who could certify to the above. If defective paint must be addressed, almost the entire interior and a 4' picket fence surrounding the entire lot would need to be addressed prior to closing. So, you can see why, if the above quotes apply, they might make for a MUCH simpler closing on this particular property for this buyer.
Thanks in advance.
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