Included in this post is a link to the Environmental Protection Agency's website on Renovation, Repair, and Painting and how it pertains to Lead Based Paint and the new regulations which have been passed.
If a home was built before 1978 then there is the possibility lead based paint was used in its construction. The Environmental Protection Agency estimates 87% of homes built before 1940 have some lead-based paint and 24% of homes built between 1960 and 1978 have some lead-based paint. Lead, and lead-based paint can cause brain damage and nerve damage, especially in children, and even in low amounts. This is serious information here, and could save the life of your, or someone you knows, child.
Renovating a "great old home" or an REO you picked up for a good deal is an excellent idea for many reasons, however please beware of the health risks associated with the remodeling.
As well, these regulations now enforced upon contractors will cost a little extra and therefore will be passed to the consumer. So expect a small increase in the renovation costs associated with older homes.