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I am supposed to be closing on a home by may 10th. 13 days from today. I have been having a lot of difficulty with my lender. The home is bank owned and is in amazing condition. The only thing is, I am doing an FHA, and it is required it be painted, even though it is very minor, (since it is lead based being the house was built before 1978). The problem is my lender wants the home to be painted BEFORE closing. However, the bank who owns the house specifically put in the contract that there is to be absolutely NO repairs or alterations made prior to closing.
I have asked my lender if we can escrow the money in order to cover the cost of painting after closing as to satisfy the terms of the bank who owns the house. They said they cannot do that unless weather permits them to have it painted by a licensed contractor prior to closing. So I’m basically stuck in limbo.
On top of that, the lender has been ignoring my phone calls inquiring about this. I spoke with the loan processor Wednesday, and she said she’d call me first thing in the morning to let me know. And it’s Saturday and I still haven’t heard a word. I have called and left three voicemails asking what’s going on, and I am becoming incredibly frustrated.
I am considering dropping my current lender and moving to another, but I already had a hard credit check to even get pre-approved. I’m worried about it dropping my score more, as well as the funds I’ve already paid out for a home inspection $ 400, an appraisal fee $ 400 and an earnest deposit $ 500. I don’t know if I can get any of that back. I want this house. I will do what it takes to get it.
I need to know if it would be a good idea this close to closing to drop my lender and find one who’d be ok with painting AFTER closing, and doing it in escrow. Or if I should just wait it out and see what they say. But like I said, it’s FHA and my lender apparently is requiring it be painted BEFORE close. But the bank who owns it has forbade it. PLEASE HELP! thank you!

6 Thoughts on Supposed to close on Home in 13 days, and My lender wants me to pay for paint, but it’s bank owned!?
  1. Reply
    May 24, 2013 at 6:12 am

    Changing lenders will NOT solve your problem. FHA loan requires it be painted. Your realtor NEEDS to contact the Bank that owns the place and demand they permit the painting to be done.

  2. Reply
    May 24, 2013 at 7:00 am

    If it is lead based paint, it is a big deal. Plus the painting does need to be done.

    Have your lender talk to the bank that owns the place about letting you in to do this work. They should know that this will be a deal breaker for most people buying this house.

  3. Reply
    A Hunch
    May 24, 2013 at 7:25 am

    Does the contract really say “no repairs or alterations” or does it say = they won’t be paying for any repairs?
    – if they will allow you to do pay for the painting, after they approve the painter and color… you can do that.
    – if it’s really no repairs or alterations = you are going to need to switch to a conventional loan or lose the property.

  4. Reply
    May 24, 2013 at 8:05 am

    This is FHA requirement, not lender requirement, so changing lender won’t change issue
    Get your attorney and/or realtor to contact bank and get them to provide permission for painting, will have to be done by licensed, bonded painter, etc.
    Some one has to get bank/owner to agree to this
    I once had to upgrade the power supply since house had 60 amp service, bringing new service rom pole and putting in breakers instead of fuses, BEFORE I could close

    These kinds of issues are why many sellers prefer buyers with conventional rather than FHA loan, as they are better qualified, are putting down more money, more likely to be approved, etc.

  5. Reply
    May 24, 2013 at 8:35 am

    Most if not all FHA products require the house to have no peeling paint inside or on the outside of the house.

    If the seller says no repairs or alterations prior to the closing it sounds like they have dealt with FHA loans before and are trying to ensure their purchaser is not using one of those programs. Your buyer agent/ realtor should have pointed this out prior to you signing the Purcahse and Sell agreement, also you should have read the P&S agreement prior to signing then you would have known not to use a FHA loan.

    I am wondering how you got this far into the process without knowing exactly what the requirements for getting your FHA were? Most FHA programs require you to go through a first time home owners workshop and get a certificate saying you completed the workshop, did you do that too?

  6. Reply
    May 24, 2013 at 8:43 am

    My realtor told me today that even though the bank who owns the house initially said sold as is. They are now saying that because my lender is requiring it to be painted they will. Under the condition they raise the price of the house. I couldn’t be more elated. I hope this works out still. Thanks everyone for your answers. They kept me motivated, and I called around still hanging on, and it looks like it might just have worked:)

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