Mold and FHA 203b Requirements

I am just wondering if my bank is pushing us into a 203k that we don't need. We are buying a HUD foreclosure. Home is vacant. The basement has two small sections of drywall that are infected with mold. There is no other drywall in the basement. There are small amounts of mold on some of the unfinished parts of the basement.

My lender has not seen the mold damage and does not know how bad it is. He is saying that they will require a 203k loan to give us the money to remediate the mold. But I thought you could go 203b and get repair funds if they are under $5k?

What are FHA guidelines for mold? Does anyone have any experience with this? The 203k will cost us a significant amount more money then the 203b.

Thanks!

Edited: 06/26/2010 at 10:59AM

Eddie Ziv

Real Estate Investor · Studio City, California

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Dec 28 '09, 09:41 AM

Since you consider doing some plumbing in the house anyway, just get a Hudson sprayer pour 1 part bleach 2 parts water and spray the area where mold is visible. You can use some rough brush to "help" remove it, but the bleach should take care of most of it. BTW, are you buying this house for yourself as owner /occupier or as an investment? I'm just curious because, 203K is usually not offered to investors (Unless HUD changed the rules again...)

Edited: 06/26/2010 at 10:59AM

Jessica Bolin

· Central Ohio, Ohio

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Dec 28 '09, 10:13 PM

We are buying it as owner occupant. It's our first home. I am looking at it as sort of a long term flip I guess you could say. Nothing like all of the professionals here of course.

I have heard from many sources that bleach is not good for killing mold. That it just turns the mold clear so you can't see it and the mold will continue to grow and will appear as though it came back. I have been told it's a myth that bleach works best for mold.

We tried to have the gas company come out today and turn on the gas for our inspections. They refused to turn on the gas because of the mold. Now we are scrambling to reach someone at HUD to find a solution. Somehow, this mold has to be cleared up before we can do inspections.

Ugh!

Edited: 06/26/2010 at 11:00AM

Eddie Ziv

Real Estate Investor · Studio City, California

1,803 posts
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Dec 29 '09, 12:14 AM

That is the first time I hear that bleach doesn't work on mold. It works very well in my experience. Make sure you're not getting your info from companies who make a living cleaning up mold... :wink:
BTW, I'm surprised that the gas company agreed to turn on the gas (mold or not) when you don't have running water (You still have plumbing issue, don't you?)

Edited: 06/26/2010 at 11:00AM

Jessica Bolin

· Central Ohio, Ohio

66 posts
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Dec 29 '09, 08:42 PM

Yes, we do have a plumbing issues. But I thought it was the other way around... we can't turn the water on until the gas is on because the pipes will freeze.

Edited: 06/26/2010 at 11:01AM

NC Mark

Real Estate Investor · North Carolina

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Dec 29 '09, 09:06 PM

Go to Lowes. They have some sort of mold/mildew killer in a spray bottle. I give it to my less-than-sanitary tenants when they get 'issues'.

Also get a mold spore testing kit. You probably want to know beforehand if you're moving into a death trap (just kidding, the vast majority of mold is not 'deadly').

And hey, if it's drywall just rip it out and replace it. Not difficult at all.

Then for kicks call a mold remediation company. After they scare the crap out of you get ready for a bid that will probably cost as much as the house.

Edited: 06/26/2010 at 11:01AM