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Spots and stains on the surface of the paint that are reddish-brown in color.
Iron nails that are non-galvanized will rust and that rust bleeds through to the surface of the paint.
Non-galvanized iron nails were not countersunk and filled over as they should have been.
Iron nails that are galvanized begin to rust after being sanded or exposed to excessive weathering.
If non-galvanized nails were used in new exterior construction, they should be sunk and caulked with a water-based, siliconized or all-acrylic caulking material before being painted.
Each should then be spot primed and painted using a high quality latex paint.
If nailhead rusting has already taken place, wash the rust stains, remove the rust by sanding and use the same preparation technique as used for any new construction.