The Federal Housing Finance Agency (FHFA) recently announced changes to Fannie Mae and Freddie Mac’s (the Enterprises) multifamily radon standards. The new standards are consistent across both Enterprises.
Summary of Radon Changes for Fannie Mae and Freddie Mac Seller/Servicers
Below is a summary of the standard changes, which will go into effect for loan applications received after June 30, 2023.
- Requiring radon testing at multifamily Enterprise-backed properties, regardless of property location, subject to some exemptions and deferrals.
- Increasing required testing from 10 percent of ground floor units to 25 percent of ground floor units.
- Continuing to allow an environmental professional to manage the radon testing process.
- Requiring the environmental professional or property representative to provide tenant notifications for radon testing.
- Providing additional guidance for lenders and environmental consultants on the Enterprises’ radon standards. As part of such guidance, the Enterprises will reinforce the need for compliance with state and local radon laws.
Below are loans and areas not subject to radon testing:
- Refinances of properties with existing Enterprise debt that have undergone previous radon testing and mitigation (if applicable) compliant with this policy.
- Supplemental loans
- Manufactured Housing Communities
- Properties with no ground-contact residential units (including properties with ground-floor retail, first-floor amenities/leasing, or residential units above parking garage or over code-compliant ventilated crawl space)
- Upper-floor residential units
- Any improvements that are not part of the collateral
Properties with property-wide radon mitigation systems and Operations and Maintenance (O&M) plans in place
- New construction built with radon resistant measures
- When the EP concludes that testing or mitigation is not necessary and documents reasons supporting this conclusion.
- Small loans/Small Balance Loan (SBL) mortgages (deferred from testing until 2024, when it will be reassessed).
What Questions Do You Have? Tell Us!
We understand that lenders will have many questions about the implementation of this new policy – we’re eager to hear from you! Submit your questions via this brief survey and Partner will address them in a webinar in April as the policy comes closer to implementation.
Watch our June 8th, 2023 Webinar: “New Radon Sampling Regulations for Fannie and Freddie”
Partner is Ready to Support Radon Sampling for Agency Loans
As the market-leading provider of due diligence and radon sampling for agency lenders, Partner is ready to implement these changes the moment they take effect. Our deep experience and large team includes:
- 85 in-house qualified radon testing professionals with various state licenses
- Network of testers and mitigators to complete work in all 50 states
- Quality Assurance Program to control inventory and ensure accurate results with short term and long term devices
- In 2022 Partner completed approximately 3,000 projects with certified testing technicians or with the oversight of an Environmental Professional (as applicable) across the country
- Technical Staff with a full understanding of radon requirements in each regulated state as well as EPA’s ANSI/AARST standards for all building types
- Report Templates in compliance with ANSI/AARST standards or state specific requirements approved and acceptable by HUD underwriters
We look forward to helping lenders navigate the new radon policy effectively and efficiently.