Mold and FHA 203b Requirements

[Jessica Hood]

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!