Peeling Paint 24 CFR 35.115 exclusions

[Homeseller]

Hi all,

I'm a home seller who received a work order from an FHA appraiser claiming that I have to paint my detached garage in order for the sellers to get the loan. The home also has an attached garage.

The detached garage sits in the back yard. It was painted 2 years ago. There is no driveway going to the garage. According to FHA 24 CFR Part 35.115 exemptions -- it clearly states that the garage is exempt. I quote:

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(a) Subparts B through R of this part do not apply to the following:

Exemptions:

(7) A property or part of a property that is not used and will not be used for human residential habitation, except that spaces such as entryways, hallways, corridors, passageways or stairways serving both residential and nonresidential uses in a mixed-use property shall not be exempt.

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The detached garage is not used for residential habitation and is not attached to any habitable part of the home. Therefore, I'm concluding the appraiser is wrong.

Comments?

I have some questions I'm hoping you'll answer.

1) Who makes the decision about if I have to paint -- the appraiser or the underwriter or someone from the FHA? I do not believe I should have to paint this. Especially since its been painted with lead-free paint many times over the 15 years I've had the house and I can prove it.

2) Does the appraiser have to come back out before closing and check if the painting was done?

Thank you so much for sharing your thoughts!

 

[RSW]

Per the Handbook 4150.2, mortgagee Letter 2005-48 and the revised appendix D, any structure located on the subject property has to meet HUD/FHA minimum property requirements to be elegible for FHA insurance. Any structure that was constructed before 1978 and has chipping paint is a required repair according to HUD/FHA protocol. Any structure that has exposed wood that is built before or after 1978 is required to be painted according to HUD/FHA protocol. The appraiser does not require these items be repaired but only reports repairs that are necessary to bring the subject property up to HUD/FHA's minimum property requrements. I hope these comments are helpful.

 

[Homeseller]

That is helpful, thank you. Does that mean that the request for me to paint is merely a guideline? If I don't paint, we can still close?

 

[Frank Lostracco]

No, the loan will not close.

 

[Homeseller]

No, the loan will not close.

Okay.....why? Is it mandatory the appraiser return to the property?

I'm trying to understand who the decision makers are and the process that takes place.

 

[CANative]

Appraisers cannot require anyone to do anything. Appraisers value property and write reports. These appraisals are developed and reported in according with assignment conditions which vary from client to client and intended user to intended user.

For properties built before 1978 which have defective paint surfaces the condition has to be corrected in order for the property to meet minimum property requirements.

The decision as to what needs to be done is the responsibility of the direct endorsement underwriter.

Lead Based Paint Hazards
For any home built prior to 1978, check for evidence of defective paint surfaces, including: peeling, scaling or chipping paint. For all FHA insured properties, correction is required to all defective paint surfaces in or on structures and/or property improvements built before January 1, 1978 in accordance with 24 CFR Part 35. Provide a detailed description and identify the exact location of any deficiency under “physical deficiencies” affecting livability.

 

[Mike Garrett RAA]

Paint it and forget it!

 

[Tim Hicks (Texas)]

Basically, the appraiser reports any defective paint surfaces for properties built before 1978. The DE underwriter requires the repairs and you will not close until the repair is completed. The appraiser will be instructed to return to the property to make sure the repair has been completed.

As for it being painted several times over, it does not matter. There could be lead based paint on the bottom layer and flaking paint would include the bottom layer that needs to be remedied for health and safety reasons.

 

[RSW]

That should answer your questions.

 

[Mr Rex]

Painted 2 years ago and painted several times over the 15 years you have owned it. Dude, you need to stop scrimping on paint over cost per gallon or somebody isn't doing the proper prep work before painting or you have a POS detached garage that peeling paint is the least problem...I dunno