I thought that all real estate agents knew this and were passing the information along to their buyers and sellers but I was wrong.
FHA loans are very popular right now and many of the first time home buyers that I work with use FHA loans.
When financing is used to purchase a home that home must be appraised so that the lender knows how much it is worth. With FHA loans part of the appraisal process includes an inspection. The FHA inspector will require that repairs be made so that the home meets minimum FHA standards.
Chipped or pealing paint is always called by the FHA inspector and the problem has to be corrected or FHA will not fund the loan. If you are a seller you want to say yes to FHA financing. You can fix the areas with peeling paint before you put your home on the market that way no one will have to pay the re-inspection fee after the appraiser says that the peeling paint has to be removed.