Mold and meth in HUD homes: what HUD discloses, what it does not, and how to test before you bid

Two things scare Colorado buyers of foreclosed homes more than anything else: mold and methamphetamine. Both are real. Both are testable for less than the cost of a night out. Neither is something HUD will fix or, usually, something HUD knows about.

What HUD discloses

HUD publishes a property condition report (PCR) for each home. It records what the inspector could see: staining, standing water, odors, obvious damage. It does not include lab testing. HUD also sells with a written as-is clause, so a condition HUD did not know about is not a HUD misrepresentation. The PCR is a starting point, not a clean bill.

Meth: the Colorado rule

Colorado is one of the strictest states on meth-contaminated property. A home that tests above the state threshold (0.5 micrograms per 100 square centimeters) must be decontaminated by a certified contractor and cleared before it can be legally occupied. Owners who know about contamination must disclose it. HUD generally does not know, which is why you test.

• DIY surface kit: roughly $50, results in days. Good for a screen before you bid.
• Certified industrial hygienist: $300 to $600 for a preliminary assessment. This is the report a lender or a future buyer will accept.
• Cleanup if positive: $5,000 to $25,000 or more depending on how much of the house is affected, plus a clearance test.

Mold

Winterized houses with a roof leak or a wet crawlspace grow mold. Most of what you see is cosmetic and cleans with a remediation crew for $1,000 to $5,000. The expensive version is hidden mold behind drywall from a long-term leak. A moisture meter and an inspector who opens the crawlspace hatch catches most of it. Air sampling runs $300 to $500 if you want a lab number.

How testing fits the HUD timeline

1. Before you bid: you can visit the house with your agent as often as you like. A surface meth swab and a look at the crawlspace take an hour. Do this on any house that was a rental, sat vacant for years, or has that look.
2. After acceptance: you have a 15-day window to inspect. A positive meth test at this point does not get your full earnest money back on its own. An owner-occupant who cancels for condition forfeits half. The forfeiture rules.
3. Financing angle: a documented contamination report can lead your lender to decline the property, and a written denial is a full-refund reason. Talk to your lender before you cancel.

A plain-English example

A buyer looking at a Pueblo HUD home noticed staining on the bathroom fan and a faint chemical smell. Her agent swabbed three surfaces before she bid. Two came back positive. She did not bid. The house sold to an investor at a reduced price a month later, who paid for the cleanup. Her $50 kit saved her from a $15,000 problem and a lost earnest money deposit.

The rule we use

Test before you bid on any house that worries you. After acceptance, test anyway, and if it is bad, get the lender involved before you cancel. HUD does not negotiate repairs, but a house that fails a health test is a house you should not close on. More on inspecting as-is homes.

Not sure which rule applies to the house you are looking at? Call or text 303-955-4220. A live person answers, and the answer is free.

Written and reviewed by

Brian Lee Burke, Colorado HUD home specialist and team leader

Licensed Colorado real estate professional since 2002 · REALTOR® · Team leader and licensed broker of the Kenna Real Estate Group at Keller Williams DTC, a HUD-registered group that regularly bids on HUD homes · Author of The Real Estate Playbook and Mastering Real Estate. Brian’s full HUD biography.

Last reviewed: September 11, 2026 · Sources: HUD Home Store (hudhomestore.gov) and HUD program guidance, HUD Handbook 4000.1, REcolorado MLS data via kennarealestate.com, and the Kenna Real Estate Group’s own HUD transaction files.

Contact: call or text 303-955-4220 or homes@kennarealestate.com. During office hours you reach a live local Kenna real estate professional, not a robot or a national call center. Brokerage: Kenna Real Estate Group at Keller Williams Realty DTC, LLC, 6300 S Syracuse Way, Suite 150, Centennial, CO 80111. Each Keller Williams office is independently owned and operated. The Kenna Real Estate Group is an independent real estate team and is not affiliated with or endorsed by HUD or any government agency; official property information comes from HUD Home Store. Equal Housing Opportunity.

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