What disclosures must the Mortgagee provide to a borrower when there is a potential of lead-based paint?

If the Property was built before 1978, the seller must disclose any information known about lead-based paint and lead-based paint hazards before selling the house, in accordance with the HUD-EPA Lead Disclosure Rule (24 CFR 35, subpart A, and the identical 40 CFR 745, subpart F).  For such Properties, the Mortgagee (Lender) must ensure that:

•    the Borrower has been provided the EPA-approved information pamphlet on identifying and controlling lead-based paint hazards (“Protect Your Family From Lead In Your Home”); 

•    the Borrower was given a 10-Day period before becoming obligated to purchase the home to conduct a lead-based paint inspection or risk assessment to determine the presence of lead-based paint or lead-based paint hazards, or waived the opportunity;

•    the sales contract contains an attachment in the language of the contract (e.g., English, Spanish), signed and dated by both the seller and purchaser:

  • containing a lead warning statement as set forth in 24 CFR § 35.92(a)(1);
  • providing the seller’s disclosure of the presence of any known lead-based paint and/or lead-based paint hazards in the property being sold, or indication of no knowledge of such presence;
  • listing any records or reports available to the seller pertaining to lead-based paint and/or lead-based paint hazards in the property being sold, or indication by the seller that no such records or reports exist; and
  • affirming that the Borrower received the pamphlet, disclosure, and records or reports, above; and

•    when any agent is involved in the transaction on behalf of the seller, the sales contract includes a statement that the agent has informed the seller of the seller’s Lead Disclosure Rule obligations, the agent is aware of his/her duty to ensure compliance with the requirements of the Rule, and the agent has signed and dated the contract.

Mortgagees are required to provide form HUD-92564-CN, For Your Protection: Get a Home Inspection, to prospective homebuyers at first contact, be it for pre-qualification, pre-approval, or initial application.

For additional information see:

•    Handbook 4000.1 II.A.1.a.ii(A)(3) and (4) available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

•    Form HUD-92564-CN can be accessed at: https://www.hud.gov/sites/dfiles/OCHCO/documents/92564-CN.pdf

•    the Lead-Based Paint Disclosure Rule at: https://www.hud.gov/program_offices/healthy_homes/enforcement/disclosure  and

•    the EPA “Protect Your Family from Lead in Your Home” pamphlet at: https://www.epa.gov/lead/protect-your-family-lead-your-home-real-estate-disclosure 

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-01156