VERTEX has been providing Due Diligence services for real estate transactions since 1995. As we continue to grow nationally, VERTEX has developed a core team of engineers, architects, construction professionals and scientists to provide property condition assessments and environmental assessments for the federal multifamily housing agencies – Fannie Mae, Freddie Mac, and HUD Lean. The scope of work for these agencies follows the current ASTM standards; however, each agency has adopted unique terminology/nomenclature, additional business risks, and hot button issues that are included in their scope of work for these services. Additionally, each agency has established requisite education and experience requirements for the assessors completing both the fieldwork and reviewing of reports. The VERTEX Agency Team has the proven experience and expertise to seamlessly provide reports that meet or exceed agency standards, within budget and on schedule, across the nation. While the agencies are continually updating their required scope of work, a brief synopsis of the highlights for each agency is discussed below.
Fannie Mae reported financing of more than $67 billion in multifamily housing in 2017. Fannie Mae published a guideline for PCA reports which includes discussion of additional hazards that may be related to building systems, pest control, seismic and other geographical concerns. Additionally, the scope of work for the Phase I report includes business environmental risks associated with asbestos, radon, and lead based paint.
Freddie Mac is the top multifamily lender in the nation with a reported $73.2 billion in loan volume for 2017. Similar to Fannie Mae, the Freddie Mac PCA also includes discussion of additional building and geographic hazards. Freddie Mac also has specific requirements for the Phase I assessment related to radon sampling at each multifamily property in addition to business environmental risks related to asbestos, lead-based paint, PCBs and mold/moisture intrusion.
HUD Lean Program
The HUD Lean program, through the Office of Residential Care Facilities, provides mortgage insurance for nursing homes, assisted living facilities as well as board-and-care facilities. The HUD Lean program generated $2.84 billion of loan volume during the 2016 fiscal year and closed out the 2017 fiscal year with $3.4 billion of loan volume. For the past several years, HUD has emphasized conformance with Accessibility Guidelines at each property that receives federal funding through their programs as part of the PCA assessment. On the environmental side, HUD requires the Phase I report to address the typical business environmental risks found in Fannie Mae and Freddie Mac scopes, as well as an additional investigation related to a number of federal programs including historic preservation, US Fish and Wildlife Endangered Species, and noise abatement and control guidelines.
VERTEX is also capable of performing Asbestos, Lead-Based Paint, Radon and Mold Assessments/Remediation, Seismic Risk Assessments and Construction Loan Monitoring Services, to streamline the Due Diligence process.
How Can VERTEX Help?
VERTEX continues to educate clients of these requirements and can provide additional guidance on the process upon request. If you have any questions related to Third Party Due Diligence reports which conform to the scope of work for these Federal Agencies, please submit an inquiry.
To learn more about VERTEX’s Environmental Consulting services or to speak with an Environmental Expert, call 888.298.5162.