What Happens when Lender Requires Mold Remediation in Order to Fund Mortgage

This is coming from my own personal story; and let me tell you it has caused 5 new white hairs to sprout from the very essence of my head.

Anyway, the reason for this article is based off of the simple fact that I could not find any information online in regards to what to do when a lender requires a certified mold certification.

In fact, I did not even know what it meant. So here is my experiences as a home buyer in this ordeal.

I found my dream house, everything looked fantastic. I had to order a home inspection, and after that an appraisal.

But, during a disgusting week long heat wave the house showed signs of secrets that were not seen until this heat wave spread through the county.

Low and behold, the basement decided to spore out like nothing I have seen before. Every wall down there was covered in mold. During the appraisal, of course the mold was noted.

Being a first time home buyer, I had no idea that this would hold up a sale and cost me so much grief. More so when I was under the impression that lenders are less likely to care about things when you are funding with a conventional loan, which was the type of loan we were getting.

Once the lender had the report in hand, and the mold was something of issue, they told us we needed mold certification. Basically a test that would show the type of mold, level, and so on.

This report cost $500!

Luckily for us, the seller paid for this report.

The report came back 4-5 days later, with a bunch of issues with mold. Count was high, moisture high, and so on. It all looked bad on paper.

With this being presented to the lender, instead of moving forward and allowing me to fix the issue myself after I moved in, I was told that in order to close the issue would need to need remediation.

Now here I am shaking in my shoes, already under contract, already financially vested in home inspections, and the cost of the appraisal. I am basically knee deep in this home, and of course there is a personal attachment to it as well. It’s my dream home, and I certainly do not want mold to be the reason I cannot purchase it!

What are my options?

I can walk away. I can get back my deposit because the bank refuses a loan without it being remedied. I will however not see a refund on the home inspection cost and the appraisal cost.

I can ask the seller to fix the issue at bay so we can all move on and close the deal.

But what if the seller will not pay for the remediation?

You can still walk away, or you can negotiate a split between cost of remediation, however why should you pay for a remedy when the house is not yours yet?

There is risk involved in this sort of negotiation. However if you want that house, and you want to close on it, and the seller refuses to take the bill on as a whole, you may have no other option, which to me seems insane, but such is life.

What do you do?

First and foremost, you want to get quotes. Lots of them. Find out what the cost of remediation of the home will be. If it is a decent price, and you are willing to pay it, or split the cost with the seller than by all means, do so. However talk with your attorney first and see what they can do for you.

Costs can vary depending on the amount of remediation needed. If sheet rock is being pulled and the area being cleaned it will cost a little less, than say a project involving re-building.


If you really want the house that badly move forward with the remediation process to appease the lender. If not, walk away, especially if the cost to remedy is very high and the seller is not willing to pay for it, or at minimum split the cost.

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