Chinese Drywall and Your Mortgage in Florida: The 2005 to 2008 Problem That Persists
Chinese drywall mortgage Florida buyers of mid-2000s homes should ask about corrodes wiring and air conditioning coils. A home with it is hard to insure and appraise until remediated.
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Chinese drywall mortgage Florida buyers of homes built or renovated between 2005 and 2008 should ask about emits sulfur compounds that corrode copper wiring and air conditioning coils.
A home with it is hard to insure and hard to appraise until remediated. Our renovation loan page covers financing the fix.
What it is
Drywall imported during the post-hurricane building boom that off-gasses sulfur.
The CPSC investigated it and published identification guidance.
Florida received the largest share.
Southwest Florida and the tri-county area were hit hardest.
Homes built in 2006 and 2007 are the peak years.
The signs
A rotten egg smell, blackened copper on air conditioning coils and wiring, repeated coil failures.
Tarnished silver and corroded electronics.
See our guide to four-point inspections in Florida.
A visual inspection behind an outlet cover shows corrosion.
Lab testing confirms.
Insurance
Most carriers exclude Chinese drywall.
Some decline the home entirely once it is disclosed.
See our guide to Florida homeowners insurance cost.
Remediated homes with documentation are insurable.
No insurance means no loan.
Appraisal
An appraiser who finds it must note it and may value the home as-is at a steep discount.
See our guide to low appraisals in Florida.
FHA and VA appraisals require the condition to be fixed or the loan declined.
Conventional lenders follow the appraiser's condition rating.
Remediated homes appraise normally with the paperwork.
Disclosure
Florida sellers must disclose known material defects.
See our guide to AS IS contracts in Florida.
Chinese drywall is a defect.
Ask directly and get the answer in writing.
A seller who remediated should have the contractor's certificate.
Remediation
Full removal of the drywall, wiring, air conditioning coils and often the plumbing fixtures.
The home is gutted to the studs and rebuilt.
Costs run into the tens of thousands.
A protocol certificate from the contractor documents it.
Partial remediation does not satisfy insurers.
Financing the remediation at purchase
A renovation loan can fund the work.
See our guide to the FHA 203k in Florida.
The appraisal is on the completed value.
The home must be habitable or the loan structured for vacancy during work.
Few lenders take these files; ask early.
Buying a remediated home
Request the remediation certificate, the contractor's licence and the permits.
See our guide to the after-closing checklist in Florida for keeping the records.
Have the inspector verify the work.
Insurance and appraisal proceed normally with the documents.
Keep the file for resale.
Buying an unremediated home
Cash or a hard money loan, then remediate, then refinance.
See our guide to hard money lenders in Florida.
The discount must cover the remediation and the risk.
See our guide to fix and flip loans in Florida.
Investors with experience do this; first-time buyers should not.
The litigation
Class actions against manufacturers produced settlements over a decade.
Some homeowners received remediation funds; many did not.
A home that received settlement funds should have been remediated.
Ask whether the seller participated.
The settlement records are public.
Condos
Buildings from the same years can have it in every unit.
See our guide to special assessment loans in Florida.
Building-wide remediation was a special assessment in some cases.
Ask the association what was done.
Individual unit remediation without the building's is possible but rare.
Testing
A visual inspection by an experienced inspector is the first step.
Lab testing of a drywall sample confirms the source.
A few hundred dollars.
Order it on any 2005 to 2008 home in the affected counties.
Include it in the inspection period.
Health
Reported symptoms include respiratory irritation and headaches.
The CPSC found the corrosion risk clearer than the health risk.
Either is reason enough not to live with it.
Remediation removes the source.
It is not a cosmetic problem.
Resale after remediation
A documented remediation is a selling point, not a stigma.
Buyers' inspectors will ask about the build year regardless.
The certificate answers it.
Homes without documentation sell at a discount.
Keep everything.
Other mid-2000s issues
Homes from the boom years may also have builder-grade defects and original roofs approaching replacement.
See our guide to wind mitigation inspections in Florida.
The four-point covers the roof and electrical.
Budget for the whole era, not just the drywall.
A renovation loan can cover several items.
Which counties
Lee, Collier, Miami-Dade, Broward and Palm Beach recorded the most cases.
Subdivisions built in a single wave often had it across many homes.
Ask neighbours and the builder's records.
A remediated home next to unremediated ones is still a remediated home.
The inspection answers it for the specific house.
Where to start
Check the build year and renovation permits on any home in the affected window.
Order the drywall inspection during the inspection period.
Then start a conversation about a standard loan for a clean home or a renovation loan for one that needs work.