On January 19th, 2023 the Federal Housing Finance Agency (FHFA) published their much anticipated update to the requirements for radon testing of multifamily properties financed through Fannie Mae and Freddie Mac.
For years the radon requirements between the Enterprises (Fannie Mae and Freddie Mac) differed for multifamily property radon testing. The difference in testing requirements caused issue when switching the Enterprise backer during or after the due diligence period. The newly updated radon policy aligns the requirements of the Enterprises simplifying the process.
Loan applications received by the Enterprises after June 30, 2023, will be subject to the following new radon testing requirements:
+ Requiring radon testing on every multifamily mortgage loan, unless an exemption or deferral applies.
+ Requiring that testing be increased from 10% of ground floor units to 25%, subject to exemptions and
deferrals for certain property types or loan products.
+ Requiring an Environmental Professional (EP) manage the radon testing process.
+ Requiring notification to tenants of the radon test and required building conditions.
+ Collaborating with the Centers for Disease Control and Prevention (CDC) to encourage better radon data
collection at multifamily properties.
+ Providing improved guidance for lenders and environmental consultants on the Enterprises’ radon
standards. The Enterprise will reinforce the need for compliance with state and local radon laws.
The health and safety of tenants is a top priority for FHFA and the Enterprises. FHFA will continue to monitor the multifamily mortgage market and will work with the U.S. Environmental Protection Agency (EPA) to reassess the Enterprises’ radon standards in 2024 to determine what adjustments are warranted. These efforts will ensure the Enterprises are using their positions as leading multifamily financers to move the industry forward thoughtfully on radon issues.
BBG has anticipated the release of the FHFA’s updated policy and has invested in its employees with radon training and experience. BBG’s radon department has a nationwide team of trained, certified and licensed radon measurement professionals to support our clients’ needs.
For more information, please reach out to our radon department lead:
Brian Meyer, BBG Radon Services