State and Local Regulations Will Continue to Drive Fannie Mae and Freddie Mac Radon Testing Practices
By Pamela Horne, Environmental Technical Director of Agency Services, and Shavaun Cotter, Technical Director, both at Partner Engineering and Science, Inc. (Also published April 24, 2025, on GlobeSt.com.)
On March 26, 2025, Federal Housing Finance Agency (FHFA) Director Bill Pulte rescinded the Directive on Standardization of Enterprise Radon Policies (No. 2022-727) and removed the 2022 Radon Policy requirements (effective 2023). Pulte stated that the Directive added extra time, expense, and operational complexity to Enterprise transactions and the requirements are no longer consistent with the FHFA’s priorities and objectives as conservator.
As a result, both Freddie Mac and Fannie Mae (GSEs) announced significant changes to their radon testing requirements. These changes are effective immediately, and the Enterprises’ guidance documents are expected to be updated this month for Fannie Mae and in May 2025 for Freddie Mac.
Freddie Mac has reduced its radon testing requirements to better align with the pre-2022 policy, while Fannie Mae has eliminated minimum testing requirements altogether, as currently, no state or local radon testing mandates apply to multifamily properties associated with real estate lending transactions. Historically, radon testing recommendations for Fannie Mae transactions were often influenced by general geographic indicators, such as reliance on the Environmental Protection Agency (EPA) Radon Zone Map specifically emphasizing Zone 1 areas as higher risk.
However, current industry best practices have shifted away from using this outdated tool as a benchmark, recognizing that elevated radon levels have been identified in all three zones regardless of designation. The EPA Radon Zone Map, published in 1993, was based on limited data and intended to indicate predicted average indoor radon levels by county and not for site-specific risk evaluation.
Today, Environmental Professionals will assess radon testing needs for Fannie Mae properties on a case-by-case basis, utilizing up-to-date, vetted data sources that consider site-specific factors, site-specific conditions, prior testing data, physical observations, and the presence of any mitigation systems. Testing recommendations are made in alignment with applicable state and local laws and are no longer based solely on broad zone designations.
The following provides a summary of the updated GSE radon polices:
Freddie Mac and Fannie Mae
- The environmental consultant is no longer required to upload radon data elements to the Multifamily GSE Radon Database.
- All State professional licensing and testing protocol requirements still apply.
- The projected radon testing for small-balance loans will not occur.
Freddie Mac
- Testing is required at all multifamily Freddie Mac-backed properties.
- The prior testing exemptions still apply.
- Testing has been reduced from 25% to 10% of residential ground-contact units with a minimum of one unit per building.
- Re-testing of units will only include those with elevated radon levels during the initial round and will not be percentage-based.
- Testing is still to be under the oversight and supervision of an Environmental Professional (EP).
Fannie Mae
- No minimum testing requirements, regardless of property location.
- Testing is only required if mandated by local municipalities, by State regulations, or recommended by the EP.
In addition to the updated GSE radon policies, State radon testing regulations and license requirements will apply. Tracking and applying the various State regulations adds complexity to the testing process. Lenders should verify that their due diligence provider has a complete understanding of radon regulations, as well as American National Standards Institute /American Association of Radon Scientists and Technologists (ANSI/AARST) standards for all building types. In addition to appropriately experienced and licensed technicians, qualified due diligence providers should also be experienced with reporting templates and standards for Freddie Mac and Fannie Mae.
As lenders navigate the changing radon policies, Partner can provide clarity and strategic direction, being a market-leading provider of due diligence and radon sampling for agency lenders with strong expertise in State radon regulations, including owner/landlord disclosure requirements. We look forward to helping lenders navigate the new radon policies effectively and efficiently.
