These revised standards aim to enhance the guidelines and requirements related to radon mitigation and testing in the housing industry. The GSEs, in collaboration with industry experts and stakeholders, have developed these new standards to ensure the safety and well-being of homeowners by mitigating the risks associated with radon exposure. These updated standards reflect the latest scientific knowledge and best practices in radon measurement, mitigation, and remediation. By adhering to these standards, the housing industry can effectively address radon-related concerns and provide healthier living environments for residents.
The Federal Housing Finance Agency (FHFA) has recently announced updates to the multifamily radon standards for Fannie Mae and Freddie Mac. In response to NAR’s concerns about the associated costs and regulatory burdens, the new standards will be effective for loan applications received after June 30, 2023. The key changes are as follows:
- Radon testing will be required for multifamily properties backed by the Enterprises, with exemptions and deferrals available under certain circumstances, regardless of the property location.
- The percentage of ground floor units requiring testing will increase from 10 percent to 25 percent.
- Environmental professionals will still be allowed to oversee the radon testing process.
- The environmental professional or property representative will be responsible for notifying tenants about the radon testing.
- Additional guidance will be provided to lenders and environmental consultants regarding the Enterprises’ radon standards, emphasizing compliance with state and local radon laws.
The following loans and areas are exempt from radon testing:
- Refinances of properties with existing Enterprise debt that have previously undergone compliant radon testing and mitigation (if applicable).
- Supplemental loans.
- Cooperatives.
- Manufactured Housing Communities.
- Properties without ground-contact residential units, such as those with ground-floor retail, first-floor amenities/leasing, residential units above parking garages, or over code-compliant ventilated crawl spaces.
- Upper-floor residential units.
- Non-collateral improvements.
- Properties with property-wide radon mitigation systems and Operations and Maintenance (O&M) plans in place.
- New construction built with radon-resistant measures.
- Situations where the environmental professional concludes that testing or mitigation is unnecessary, providing supporting reasons.
- Small loans/Small Balance Loan (SBL) mortgages, which have deferred testing until 2024 for reassessment.