Why Peeling Paint Is A Home-Buying Red Flag

Dana Gibson Colorful Richmond Home Living Room
Photo: Helen Norman; Styling: Lizzie Cox

Peeling sweet potatoes, peaches, apples, and tomatoes, isn't the easiest thing in the world, but once you learn a few tricks (like this one), it can be almost fun. No matter how you feel about peeling shrimp or hard-boiled eggs, at least the end result is a tasty snack. Peeling things in the kitchen just means good things coming, peeling things other places, though, can mean the exact opposite. One thing you really don't want to peel is the paint in your house—or in the house you're about to buy.

Peeling paint is never ideal. While homeowners may see peeling paint and realize they have to add re-painting the shutters or the bathroom to their to-do list, those looking to buy a home may have a bigger problem. That's because peeling paint could potentially cost them their mortgage.

Peeling paint is a warning sign for home inspectors doing their due diligence for buyers. That's because older homes, particularly those built before January 1, 1978, almost certainly have lead-based paint in them. And when lead-based paint peels, it is more easily ingested or inhaled and that can lead to serious health problems, like cancer.

While lead paint is a huge problem for anyone, in addition to the health risks and remediation costs, peeling paint may cause a potential home buyer's financing to fall through. Those home buyers looking to get a loan that is insured by the Federal Housing Administration (FHA), the U.S. Department of Agriculture (USDA) or Veterans' Affairs (VA), need to make sure the property meets certain health and safety standards. If the home you're trying to buy was built before 1978, a.k.a the year that lead paint was banned in the U.S., peeling or chipping paint could mean that the house won't meet that health and safety standard. Basically, the FHA doesn't want to help someone buy a home that could harm the health of them or their family. It makes sense, but if you're trying to buy a home with an FHA loan and run to that problem, it is undoubtedly very stressful.

If a home inspector finds peeling paint in an older home, they should flag it. It is then up to the loan agency to determine whether it is too risky. Otherwise, the seller may be able to fix the problem. If that house was built before 1978, the paint should be scraped, removed, and re-painted by a professional to ensure there's no lead lurking around when you move in. If the loan agency doesn't approve the loan due to lead, it may be frustrating, but it is definitely smarter than risking lead exposure.

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  1. Environmental Protection Agency. Protect your family from sources of lead.

  2. Agency for Toxic Substances and Disease Registry. Toxicological profile for lead.

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