Lead Based Paint Requirements for HUD Homes

If buyer’s offer indicates that they will be using FHA financing on a HUD home built prior to 1978, the asset manager (AM) will order a field service manager (FSM) to conduct a lead based paint test on all deteriorated paint in the home. If upon completion of the test the FSM discovers deteriorated lead paint they will detail it in a report that includes locations and the cost to repair or stabilize.

HUD will complete up to $4000 in lead paint stabilization prior to closing.

If lead based paint was discovered but HUD does not complete stabilization the purchaser shall receive at closing a credit for an amount not to exceed $4000 to represent the seller’s contribution toward the cost of stabilization and clearance testing. This credit shall appear on the FORM HUD-1 SETTLEMENT STATEMENT and shall be deposited into the 203(K) repair escrow account. Should the cost of lead-based paint stabilization exceed the credit provided or if the property fails a clearance examination, the buyer will be responsible for any additional costs. Lead based paint addendum and the HUD 9548-G (203K Work Write-Up) 203K Addendum for Lead-Based Paint

Reminder: Additional steps for lead based paint only pertain to homes built prior to 1978 AND if buyer is using FHA Financing

Additionally, if buyer changes from FHA financing to conventional or cash after lead based paint stabilization has been completed by HUD the buyer will be required to reimburse HUD for all costs associated with the stabilization.

Buyer is required to use an EPA Lead-Safe Certified Firm. Contact us for information on possible firms.