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In recent years, spray foam roof insulation has gained popularity due to its energy efficiency and effectiveness in sealing homes against drafts and moisture. However, homeowners are now discovering that this insulation choice can become a significant obstacle when it comes time to sell their property. Mortgage lenders are increasingly hesitant to lend on homes with spray foam roof insulation, creating a challenging situation for sellers. And here at Hannells, we’re certainly starting to see more and more situations where lenders aren’t prepared to lend at all on properties that have had the treatment, leaving sellers in a predicament that can be extremely costly to get out of.
Spray foam insulation is a chemical product created by mixing isocyanate and polyol resin, which react to expand and form a solid foam. When applied to roofs, this foam provides a continuous air barrier and high thermal resistance. It is praised for its ability to fill gaps and cracks, reduce energy bills, and enhance overall home comfort.
Structural Concerns: One of the primary reasons lenders are wary of spray foam insulation is the potential structural damage it can cause. The foam adheres tightly to roof structures, which can hide issues such as leaks or rot. Over time, this hidden damage can compromise the integrity of the roof, leading to costly repairs that lenders are reluctant to risk.
Moisture and Ventilation Issues: Spray foam creates an airtight seal, which can lead to moisture build-up if not properly managed. Poor ventilation can result in condensation within the roof structure, promoting mould growth and wood decay. This moisture issue is a red flag for lenders, as it can affect the long-term durability of the property.
Inspection Challenges: Spray foam makes it difficult for inspectors to thoroughly examine the roof structure. This limited visibility prevents a comprehensive assessment of the roof’s condition, leaving lenders uncertain about potential risks. Without a clear inspection report, lenders are less likely to approve a mortgage on the property.
Market Perception and Resale Value: The growing awareness of the issues associated with spray foam insulation affects market perception. Potential buyers may be hesitant to purchase a home with this type of insulation, fearing future problems and difficulty obtaining financing. This reduced demand can negatively impact the property’s resale value, which is a concern for lenders.
If your home has spray foam roof insulation and you plan to sell, consider taking the following steps:
Professional Assessment: Hire a qualified inspector to thoroughly assess the condition of your roof and insulation. Address any identified issues promptly to ensure your home is in good shape.
Clear Documentation: Provide potential buyers and lenders with detailed documentation about the installation and condition of the spray foam insulation. This includes warranties, inspection reports, and any maintenance records.
Explore Remediation Options: In some cases, it may be worthwhile to explore the possibility of removing the spray foam insulation and replacing it with a more lender-friendly alternative. Although this might not always be a possibility and in some cases can result in the entire roof having to be removed. Consult with insulation and roofing professionals to understand your options and associated costs.
Communication with Lenders: When seeking a mortgage, communicate openly with potential lenders about the presence of spray foam insulation. Some lenders may be more flexible if you provide thorough documentation and demonstrate the insulation’s current good condition.
While spray foam roof insulation offers many benefits, it can become a significant barrier when selling your home. Understanding the reasons behind lenders’ reluctance and taking proactive steps to address potential issues can help mitigate these challenges. By staying informed and prepared, homeowners can navigate the complexities of selling a home with spray foam insulation and find a path forward.
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