Breaking news....be very aware of lead-based paint requirements regarding buyers responsibilities.
At the present time, if a buyer is bidding for a HUD home and getting FHA financing, they are required to get a lead-based paint inspection on homes older than 1978. Now, this is not the "scrape a bit of paint and send it in to a lab" type inspection. A lead based paint inspection required by this type of loan usually costs from $600 to just under $1000. The good news...as long as you stay with the escrow, HUD will pay for the inspection. The bad news...abatement can cost tens of thousands of dollars, which the buyer must pay for.
The solution, from HUD's viewpoint is to change to an FHA 203K loan, in which the buyer increases their loan to include the cost of abatement. The problem is that the buyer then has to qualify for the new amount.
The ultimate issue may be that if the buyer can't qualify for the new loan amount and switches to a conventional loan, they may have to reimburse HUD for the cost of the originial lead-based paint inspection.
So, be very careful when looking at HUD homes with an FHA buyer looking at homes built before 1978. It just may not be worth the aggravation and cost!
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