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SPECIAL LEAD BASE PAINT ANNOUNCEMENT October 22, 2009
October 22nd, 2009
Effective October 20, 2009 HUD properties will no longer be sold as insurable if the lead base paint inspection denotes paint that requires stabilization in an amount greater then $4,000 (except 203K), at which point a credit will be issued to the buyer’s up to the $4,000. On all properties constructed before 1978 HMBI will order a lead-based inspection and visual assessment after the property goes under contract. This requirement only applies to those properties where the purchaser is utilizing FHA financing.
If the lead-based paint inspection and associated stabilization exceeds $4,000, HMBI will notify the broker and/or agent and advise them accordingly of the following options:
1) Amend the contract financing to conventional or 203K. If the purchaser(s) opt for 203K, HUD will only approve a credit up to the $4,000.
2) Cancel the contract in accordance with the LBP Stabilization Addendum.
In the cases where HUD cancels the contracts due to the presence of deterioted lead-based paint and the cost estimate for implementing the stabilization plan exceeds $4,000, the buyer shall be entitled to a 100% refund of the earnest money deposit.
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