…the new seismic risk requirements are raising some questions. The final new Fannie Mae Multifamily Selling and Servicing Guide is hot off the press this week (as of Monday, February 3rd), and with it comes some new requirements for Seismic Risk Assessments. All reports ordered on or after this date will require compliance with the revised policy. Fortunately Section 321, which includes the seismic hazard and building risk factors, has not changed too drastically over the old Guide unlike the Fannie Mae Physical Needs Assessment (PNA) which underwent extensive revisions. However, one change in particular is causing a fair number of questions and will require some adjusting in the industry.
Shifting from Seismic Zones to Peak Ground Acceleration
The biggest change is that Fannie lenders will no longer be relying on the seismic zone map to determine if the subject property is in a region of moderate to high seismicity. The old PNA guide used the historic, 1997 Uniform Building Code seismic zone maps as the basis for seismic hazard determination. Under the old PNA guide a property would require a seismic risk assessment if it was located in Seismic Zone 3 or 4, and exhibited one or more of seven (7) documented structural or site hazards. As of this moment, Freddie Mac and CMBS lenders will still rely on the seismic zone map to determine the seismicity of the property, though there is some debate whether this change will carry across the industry at some point.
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