Attach a mildew cleaner to your garden hose. Many cleaners come with a bottle that attaches to the end of a water hose. Adjust the nozzle on the hose to its most forceful stream, so it can reach the top of the house.
Spray the mildew cleaner on the eaves and leave it on the recommended amount of time according to the label. You need to remove the mildew before you sand the peeling paint. If you sand first, you will sand the mildew into the fibers of the wood.
Place a ladder up against the house so it is near the eaves. Climb up with a sander and have someone hold the bottom while you are at the top.
Sand the surface of the wood with a power sander. Use a medium-grit paper or disk such as 80 grit to break off any peeling paint and smooth down the surface.
Climb down and move the ladder to each location where paint is chipping, peeling or bubbling. Sand the surface. Once the eaves are cleaned and sanded, you can paint them. It is best to paint a primer coat on first and then paint your color of choice. The primer will help the new paint bond.