The skinny on options for dealing with defective paint for an FHA loan

A prospective buyer stumbled on my blog recently and watched a video about FHA and defective paint. She had some follow-up questions due to her situation, and I thought it would be helpful for others to see our interaction in case you are in a similar scenario.

Question from Buyer: Hello. I stumbled upon your video because I made an appointment to look at a house and the Realtor told me she hoped I had a conventional loan because an FHA loan has issues with the chipping paint on the outside. I have no idea if the paint is lead (the house was built in 1940 so there is a possibility). What are the options if the FHA loan is what I was approved for but don’t have the money to have the house painted? Could money be held in escrow to have the house painted or would the seller maybe pay to have it painted? Any help you could give me would be great! Great video!

My Response: Thanks for the comment and the question. Your options are really as follows: 1) Ask the seller to cure the problem; or 2) Find another way to cure the problem. The reality is that the issue needs to be cured – no matter how it gets done. Any paint surface that is defective (flaking, chipping or peeling paint) will have to be properly remedied and sealed. There won’t need to be any lead-base paint test. 3) A third option actually is to do an FHA 203K loan so you can get certain repairs like this taken care of without spending money out-of-pocket. You’d actually buy the property and then specific predetermined repairs would be made after the close of escrow from money bundled in your loan. Not all loan officers and brokers handle 203K loans or are good at doing them, so make sure you work with someone who knows about 203Ks. I’m glad to refer someone trustworthy to you.

The video below helps to explain the three ways to deal with FHA repairs. I hope this was helpful. Keep me posted if you have any questions or insight.


If you have any real estate appraisal, valuation consulting, or property tax appeal needs in Greater Sacramento, contact me at 916.595.3735 or


  1. says

    Thanks for sharing this Ryan. Chipping paint is the most common issue I see when doing FHA appraisals and this is really good information for anyone getting an FHA loan to have.

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